Banking On Recurring Revenue Online

Recurring Revenue In The Cloud

Many common traditions have held up for centuries (Thanksgiving dinner, anyone?), but the post millennial world of business and technology has perennially followed the idea that traditions are meant to be broken.

Take a look at the radical change in the way content is consumed.Traditionally, cell phones were used as mobile devices for conversation and upgraded every two years, usually when a service plan expired. Movie lovers rented and returned DVDs to a store (sometimes with a late fee). People watched music videos on MTV and bought CDs. Those conventions, once considered bleeding edge, are long gone. Over the last decade our society has completely changed the way it consumes content, thanks in large part to the rise of mobile devices and the ubiquity of cheap high-speed Internet connectivity and wifi. The broad based adoption of recurring revenue by businesses creating and distributing this content has only accelerated this trend.

Breaking The Old Traditions

In short, if you think the way you run your business will remain the same over the next five years, you’re in for an unpleasant surprise.

Businesses today must break old traditions in order to meet the constantly changing demands and needs of customers, who increasingly want what they want, when they want it and how they want it. To take advantage, companies are switching to recurring services. 47% of U.S. businesses have already adopted or are considering adopting a recurring revenue model and the number is steadily rising. The result is undeniable – business booms, upstarts become household names, and established enterprises are reinvented.

Yet supporting this level of demand is increasingly difficult.  It requires flexible business models and processes that can easily repackage existing products and services into dynamic product catalogs full of tailored offerings that meet changing needs.

Despite the challenges, the carrot is proving tempting. Check out these companies who have successfully leveraged the content provided via their networks and repackaged it into recurring services:

YouTube Red

This powerhouse recently joined the recurring revenue subscription world with the announcement of YouTube Red, a $9.99 ad-free monthly subscription channel stocked with original programming like shows from popular YouTubersPewDewPie, Lilly Singh, and the Fine Brothers. The service also offers access to YouTube’s Gaming app and YouTube Music, a new app that replaces YouTube Music Key (launching later this year). Subscribers can access this content on their computer, mobile, and television.

you-tube-red

YouTube Red is welcomed by avid YouTubers (both content uploaders and content viewers) who are annoyed by the platform’s video ads. According to the company,YouTube Red differs from Netflix’s movies, shows, and originals as it will “offer premium features with a new way to enjoy music and some original content from people who have become really popular on YouTube.”

Apple

Apple is no stranger to disruption. The company revolutionized the mobile phone, sparking the transformation into the multi-use smart phone it is today. And Apple continues to monetize new opportunities by constantly changing existing products and services to mirror consumer changes and preferences. After dominating music with the iTunes store, Apple released Apple Music Radio, a subscription music service, when iTunes sales declined.

But Apple did not stop with services – the company has even turned to recurring revenue models for its products with the launch of the Apple iPhone Upgrade Program earlier this year. The 6S and 6S Plus iPhone models are available through a monthly payment plan directly with Apple, with plans starting at $32/month and an upgrade offer every 12 months. This new payment option indicates that Apple is ready to dive head first into expanding its recurring revenue models as it empowers Apple to establish a more predictable revenue stream for years out, all while they fortify its brand loyalty by tethering customers to more frequent upgrades on an affordable basis.

Nickelodeon

Earlier this year, Nickelodeon targeted a new market when it launched Noggin, a mobile subscription app for preschoolers featuring award-winning shows along with music and educational videos. Noggin targets the mobile consumer, like a family with young children on a road trip to Disneyland.

With Noggin’s launch, it’s clear that Viacom sees the long-term benefits of recurring revenue. When the company didn’t renew its contract with Netflix in 2013, it shut off streaming access to popular Nickelodeon shows. As a result, Viacom knew this service would be attractive to parents of Nickelodeon-loving children, who would buy and then take their favorite programs on the road with them via tablet or smartphone. As consumers continue to shift away from cable and towards streaming, Viacom found a way to continue to monetize Nickelodeon’s most popular shows through a subscription service that guarantees a continuous revenue stream.

The good news is that successful monetization via recurring revenue does not require you to reinvent the wheel. You just have to replace the spokes.Doing so requires a flexible business model and agile billing system that can adapt your continuously changing needs. The way your business runs will change – are you going to be ready?

By Tom Dibble

Gary Bernstein
Secure Remote Authentication When employees are working remotely, they need to be able to access company resources and applications just as if they were in the office. This means that remote authentication needs to be ...
Cloudtweaks Comic Ai
How AI Is Important for Businesses Shifting to Remote Work The Coronavirus Pandemic has taught us that organizations must have remote work choices. It is no longer possible to work in a digital environment. The ...
Using Data Scraping to Learn What You Need to Know
Data Scraping Opportunities How can you know what you don’t know? It sounds like a rhetorical question, but it is in fact a vital component of business strategy. As much as any company or organization ...
Episode 16: Bigger is not always better: the benefits of working with smaller cloud providers
The benefits of working with smaller cloud providers A conversation with Ryan Pollock, VP Product Marketing and Developer Relationships for Vultr.com - Everyone knows who the big players are in the cloud business. But sometimes, ...
Rakesh Soni
Multi-tenant clouds are becoming more popular than ever because they're incredibly cost effective and easy to set up. If you're considering switching your business over to a multi-tenant cloud platform, this article is for you ...

INVESTMENT CLOUD

  • mint

    MINT

    Mint allows you to see your entire financial situation all on one screen; credit cards, savings, ISAs. investments, budgets, insurance, everything you can imagine. Mint updates and analyzes your information in real time, making judgements and suggestions on savings accounts and credit offers available. 

  • WeathFront

    WEALTHFRONT

    Wealthfront helps you invest for the long-term while introducing customizable features that are perfect just for you. They also present several Investment options that suit your interest. Asides from this, the Wealthfront software helps balance your portfolio and minimize taxes across your various investments.

  • MoneyBox

    MONEYBOX

    Moneybox is a very simple little app that helps you to save little by little. Bank level encryption protects your savings and information and the money you save can be invested in several different ways, through cash, global shares, or property shares.

  • Betterment

    Betterment

    Betterment is an online investment service aimed at maximizing investment returns, using a combination of smart automation to help invest excess cash and analyze your entire financial situation and an expert team of financial advisors and investors.