Winning With Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online
Consumer demand for the seamless online purchasing and management of subscriptions, such as telecom and cable plans, software, and digital content, is poised to skyrocket. This one-hour webinar will explore how a successful subscriptions business model can lead to recurring revenue and long-term, high-bandwidth relationships with more satisfied customers.
Featuring: David Chiu, ecommerce industry strategist at Elastic Path Software
Winning with Subscription
Hello. Welcome to the webinar. My name is Matt Dion and I'm the Vice President of Marketing here at Elastic Path. I also have with me today David Chiu who is one of our top ecommerce strategists. The title is winning with Subscriber Top trends and best practices for selling and managing subscriptions online.
Here at Elastic Path, we've helped the world's biggest brands sell digital goods and services. We provide both the flexible ecommerce platform as well as expertise in ecommerce strategy and implementation. Over our ten year history we've helped over 200 companies such as Symantec, Time Inc., and Virgin Media.
We also run the world's number one blog at getelastic.com and have a number of research papers and webinars with the wealth of knowledge for companies selling digital goods and services.
Given the type of companies we work with, today's topic on subscriptions is something we've become familiar with. We look forward to sharing our insights with you to help you with your strategies around subscriptions as well. I'll now turn it over to David.
Thanks a lot Matt and welcome to the webinar once again. We've got an action packed agenda. We're going to take a look at some of the recent changes to the subscription landscape and the impact they have on this particular monetization model. We're going to take a look at the rewards and risks of this model as well as some of the best companies that are selling subscriptions online right now.
We're also going to take a look at some of the key features of a successful implementation and from a customer experience perspective and what does it does. And we’ll finally wrap up with a strength and weakness analysis of some of the alternative platforms that are available for you to actually go through subscriptions.
So early in 2011, we had some big service announcements that brought the subscription model top of mind. And key among these of course is Apple's release of their in-app subscriptions program on February 15th. What they were trying to achieve here for us to bring down some of the overall complexity of subscription management prior to this release it was subscription model primarily reserved for large publishers just due to the complexity involved in setting these things up. And you know, Apple here opening up the model basically to all content publishers. Of course, with the major -- that being their 30% revenue share in their license.
That of course ruffled a few feathers in the very next day on February the 16th. Google announced possibly a little early their one pass a subscription payment system. The key thing about both of these services are they're supposed to bring subscription monetization and to all content creators primarily periodical news and various other media publishers but possibly to extend that to other products and services down the road. But the key question that comes out of this is of course, do these new services actually change the fundamentals of what works and doesn't in subscriptions? In other words to phrase that question, just because Apple and Google now have some subscription features that are easily available and easy to implement, will people suddenly sign up for product and service? And of course the answer to that is well not a resounding no. It's probably not likely.
So to take a look at what will get people to subscribe to again in a product or service. We're just going to take a few minutes here and take a look at subscriptions 101. Why anybody would want to pursue this model? Some of the rewards and risks inherit in it. To get a good grasp on the fundamentals of exactly what subscription monetization means, chief among these of course; the recurring revenue. Everybody wants the recurring revenue and the increase in lifetime customer value that comes along with having subscribers versus people that just come in and buy stuff on a one off basis.
Along with the recurring revenue comes the measure of predictability for companies that are pursuing subscriptions and these doesn't just include the predictable revenue that comes from having subscribers. It also includes some operational predictability factors. Such as being able to take a look at traffic patterns and transaction volumes and sending things up nicely for that.
Having customer billing information on file is also very nice. Together with the fact that customers are coming more often and touching the brand and the product and service more often than one off customers, it tends to lead to increased customer insights. When you have billing information on file and increase customer insight, it tends to lead to new opportunities for up selling, the ability to provide new tiers, drive loyalty programming and more easily introduce things like gifting or compatible offline merchandise or premium services. It's basically makes it easier to up sell ancillary revenue streams. Obviously it's much easier to up sell to an existing member or a subscriber or a customer than it is to acquire a new one from out of the blue.
Finally with the increase in importance of social marketing and user generated content. For some marketing benefits that come along with having a subscription model. With deeper customer identification of the brand, these are now members or subscribers; they're not just one off customers. They're more likely assuming your products or services desirable to go out and tell their friends about it and perform some of the factors that increase social marketing and user-generated content methods.
The flip side of this is with the increased customer commitment and the increased lifetime customer value, come higher customer expectations. They're going to be paying more; they’re going to be paying more often. And these leads under the more demanding in terms of the content quality that you're providing and also delivery service levels whether you have an explicit level agreement or an implied one. Customers are going to expect to access their content or their product or service whenever you said you would provide them. Also it tends to come with the subscription model of the increase and expectations around customer service and the whole customer relationship management process. If somebody's clock is ticking away on their subscription and they're paid for the month for the week or the day, they're going to want a relatively a higher response level on customer service and some of the CRM programs that may be in place.
Another one of the hurdles to tackle in a subscription monetization model is basically packaging and distribution and I won't go too deep in to this because there are a few slides that sort of delve a little deeper in to this but basically, when you're asking customers to subscribe to your content or product or service, you're going to be competing with a free and free may mean literally free such as YouTube or Google News or broadcast programming or even the copy of Sports Illustrated in the office bathroom or free may refer to an existing background service that somebody else is paying for like the family cable subscription but either way, customers are going to be thinking long and hard about whether they need to subscribe to another piece of content channel or product or service.
Finally along with the subscription model tends to come an increase in business process complexity. This is going to be things like the billing systems, the recurring billing, the customer relationship management processes and systems that need to come in to place. Things like dunning management, which happens when a customer's credit card expires or they move or something.
There are some compliance and are regulatory issues around recurring billing that don't intend to be there with simple one off billing. So here are a couple of slides that are sort of no brainers. They are surveys that have been distributed quite widely and they indicate potential growth and online digital content revenue, we don't really need to delve into that here. Pretty much everybody agrees that there's going to be growth in this market and that content revenue is going to be increasing quite significantly over the next few years.
What I wanted to point out here is the typical segmentation of these surveys tends to be by vertical in content type so I divided it to apps, games, music, books, video. I have added a couple of here that are particularly significant to subscriptions. Those are being business and consumer software and business services, both of which have seen quite some success pursuing subscriptions.
The key factor is that the subscription model per se is not tied to a particular segment. They're going to be a variety of models used within music, within video, within news for example and that's not really helpful in determining whether or not to pursue subscription monetization.
In fact in a fairly recent Accenture survey, they asked executives in the content media and digital services industries, what will be the most prevalent business model in your sector within the next three years? And there some very telling results here in that a consistent almost two thirds of executives say it's going to be advertising funded. The freemium model which is discussed in some of other webinars is gaining a toe hold but the key thing here is subscriptions represent a small and almost shrinking portion of what executives consider too to be prevalent business model in their sector and it's down for about a quarter to less than fifteen percent.
Another question that was asked in the survey is which factor represents the most important source of revenue growth for your segment in the next three years? And the results are more consistent overtime here. Two thirds say it's going to be new platforms or ways of delivery which is a higher figure than new content or new geographic markets combine.
So when you look at those two, the question asked whether the characteristics of an enterprise ready or appropriate for subscriptions and when you look at these numbers, it really sort of leads to the conclusion that it's less about what product or service or content you're providing and more about how you are providing it. And because subscriptions play a sort of figuring in to a much smaller role in the overall content landscape, the way that you are providing it is going to play a very very significant factor. So when we break that up a little more, the three things that we identified that do predicate success where there is subscription monetization model versus what content you're providing, I really need these things and I'm going to be calling them the three mantras for the remainder of the presentation.
The first of these is Ubiquity coupled with a good customer experience. Sometimes this is called frictionless commerce. And this is basically the potential subscriber saying I'm going to subscribe to your product or service if you can get it to me in a way that I cannot imagine living without.
The second mantra is Exclusivity, and again, this is a customer saying I'm going to subscribe to your product or service. If I want it but I absolutely cannot get this anywhere else. And that absolutely is very important.
And finally the third mantra is about Amortization and this is the customer saying I'm going to subscribe to your product or service if other ways to get it evolves spending a huge pile of cash and we'll delve into these three much deeper as we scan the best practices of successful companies that are actually pursuing this monetizing model.
So no discussion of subscriptions would be complete without first taking a look at Netflix which is often held up to be the gold standard in pursuing subscribers. The important thing to remember at Netflix is that their content is not exclusive and the movies available are also available on literally on hundreds of other channels. So what they've done is fall in back on a combination of a platform ubiquity in which they're extremely aggressive. A good inconsistent customer experience across that platform and the amortization factor being able to access those thousands of movies without having to buy them individually.
In terms of platform ubiquity, they've been very aggressive at allowing access to the Netflix library through a wide variety of devices ranging from over the top boxes, directly on equipped televisions themselves, most of the major mobile ecosystem players, as well as they've been very successful watch instantly on the web of course.
Now ubiquity got an asterisk next to it because this ubiquity is under siege. Thanks to Apple's new licensing requirement and a large proportion of their mobile traffic is of course via the iOS app on iPhones and now primarily on the iPad and with Apple's new licensing requirements and their 30 percent revenue share, it's definitely under siege. And he thinks that besides Netflix this year we'll likely see a very large tension between ubiquity and experience as a technology gate keepers. The Android markets, the Apple app markets, exert types of control over access to their devices content companies like Netflix and some of the streaming radio services are going to have to work very hard to maintain that ubiquity and a good consistent customer experience across those platforms as they try to either work around or work with these new fairly draconian revenue share requirements.
For example Netflix has a few options here. They can eat the revenue share which is not really cannibal as an open letter from them in the market. A test too. They have some work arounds that are available such as attempting to deliver movie streams via the web browser, mobile browser, Safari for example and exiting the app market entirely which would maintain their ubiquity so that customers on iOS devices would still be able to access Netflix but of course it would impact the customer experience because it just wouldn’t be as smooth as being able to click on the app and instantly sort of go in to the Netflix environment.
There are many other examples of sort of entertainment or media content companies that basically follow the Netflix model of ubiquity coupled with experience in amortization and streaming radios are great example. So Slackers, Spotify, RDio, all of these follow a very similar model where they are aiming for a platform ubiquity and you can see on the screenshot from RDio here that they are on BlackBerry, they're on Android, they're also on the web. They try to create a very seamless and easy customer experience and of course it's always the amortization factor at play here. You can sort of pay 99 cents multiplied by tens of thousands of times to get access to these songs or you can sign up to this sort of all you can eat programs where you can sort of amortize that cost and listen to what you want when you want.
So it's actually a very common model especially within the entertainment media's base where ubiquity experience and amortization are coupled together. And there's good reason for this.
The exclusivity sort of mantra to gaining subscribers is very much more difficult to pull off than ubiquity experience and amortization. News, print, music, video, all of these are inherently multichannel so no matter how hard you try to sort of be exclusive it's actually very very difficult.
In contrast with this slide, this is a slide from Activision Blizzards World of Warcraft website, this experience is literally the only channel for you to experience World of Warcraft. You can't watch it on TV, you can't listen to it on the radio, you can't buy it in the newsstands yet in 12 to 14 million subscribers to this service and the point of this slide it is really to illustrate the difficulty in relying solely on exclusivity to power subscriptions. If you are sort of news based or music or video, it's very very questionable whether your product service or content is truly a unique and experienced as an online role playing game. And so exclusivity by itself is very very difficult to pull off unless you truly have a product or service that is different from everything else out there.
So we switch gears a little and take a look at some of the other successful combinations of the big three mantras that drive subscriptions well. This Concur Solutions. They're an expense and travel planning service and as you can see from the right hand side here, ubiquity and experience are pulled off very well by Concur and there's a very very heavy amortization factor here. So in terms of ubiquity, they're doing a very very good job of being able to access their service through smart phones, such as the iPhones or BlackBerry. They have a very streamlined and pleasant user-experience on the web.
In terms of exclusivity, not really. I 'mean there are many many other ways of doing expense and travel tracking and this is not the only one so exclusivity not so much. But amortization is a great factor here. With their breeze service for small business a small monthly fee is used sort of access to the service that would typically be reserved for the very very largest organizations that have invested millions of dollars in to these systems. So amortization can be a huge factor especially for things like business services, business products, lifestyle services, but you can see here they've been extremely successful because they've also coupled that with a good dose of ubiquity and customer experience.
So we move to publication content. Things get a little murk here. This is The Daily, sort of a joint venture between new corporation and Apple. It is an iPad only periodical. And illustrate some of the potential risks that are involved with purely pursuing experience which you can see in the previous side is not one of big three mantras.
So let's start with exclusivity. It's 50/50 here. They're aiming for a very high journalistic quality. There is content here that you can't get anywhere else. But in the end it is a news periodical and new and analysis is essentially commoditized now. You cannot get this particular journalism anywhere else but journalism reflects current events which is available elsewhere into a variety of other channels. So exclusivity for The Daily sort of 50/50.
Ubiquity is going to be a big problem. This is solely available in the iPad which is we all know is a magical platform but it's questionable whether this is sustainable in a world where sort of screens everywhere is becoming more and more of a factor. So if you're paying for a daily subscription and I want to access my contents say on the web, on my home or work PC, it's not going to be available. So ubiquity is a bit of a problem here.
So this illustrates some of the potential risks in pursuing purely customer experience and The Daily has a great customer experience. But ubiquity, exclusivity and amortization, it's sort of questionable whether they're going to succeed in really gaining a critical mass of subscribers to make this a successful venture.
Another periodical that sort of moved online is Time Inc. with Sports Illustrated digital and these guys ramped up the big three a little more. In terms of exclusivity, they have taken a huge step in increasing this mantra by taking print subscriptions essentially out of the picture. If you want to subscribe to Sports Illustrated, you're basically subscribing to digital and the print version is kind of ancillary nice bonus or add on. There still going to be a channel leakage if all you're after is say, images from the swimsuit edition on the sports statistics. Those are still available through a variety of other channels but they've definitely ramped up exclusivity by taking their own print equation out of the picture.
Ubiquity it's not bad, a good web experience is still essential. You're going to want to access your Sports Illustrated content on the web and then decide to go with Android. So it's also available on one of the major or the fastest growing mobile ecosystem. So in terms of ubiquity, very sustainable in the short-term.
The strategy for iOS and the Apple devices remains to be seen but again because they have sort of gone with a web experience. Perhaps it is going to be a pretty good customer experience to access your SI content to a mobile browser like Safari.
So in terms of looking at periodicals, a definite ramp up in ubiquity. The experience is going to be pretty good and also very good attempt at increasing exclusivity to the removal of the print subscription.
So to summarize some of the stuff from the previous slide, customers are going to sort of pursue subscriptions and they're going to be willing to subscribe and do the recurring billing based on exponential services not the content. They're paying for access to that content and generally not for the content itself. Especially in terms of subscriptions. It is really the whole package that's being monetized not the individual pieces of content.
Multiplatform access is currently a big deal and it's only going to get bigger as the number of people with multiple screens, mobile devices, televisions, web on desktops and laptops. It's only going to get bigger. And because of that, there's going to be some upcoming intention from ubiquity and experience. As technology companies such as Apple and Google start to try to monetize their side of things, it's going to sort of cause a bit of pain and trying to maintain platform ubiquity and some work arouse may have to be necessary which may or may not impact customer experience. So watch retention between ubiquity and experiences especially on some mobile platforms.
And then some of the case studies that we've seen in the previous slides, some would have said no brainers that go along in succeeding in the subscriptions space. They make the recurring payment part as effortless as possible. You can see that it was really not a big deal in the previous slides and it's just sort of there. They generally have a history of providing a clear and responsive customer service options. As well as instead of a reputation of treating their subscribers. I like the valued members that they are rather than sort of an occasional customers.
But the real key take away from the best practices is that successful subscription based practice services are going to have at least one and preferably two of ubiquity, exclusivity or amortization, plus the customer experience that is at least the market average or better.
So before we move on to take a look at some of the platforms that are available, I'm just going to switch gears a bit for a few minutes defining exactly what is the subscription monetization model. In terms of the customer experience features that have to be there and the first sort of package of these is really the subscription merchandise and here's a screenshot from the RDio service to sort of illustrate some of the absolutely essential elements of subscription merchandising. These are sort of no brainers. You're going to have to have a system that allows you to define a subscription product and to price that subscription product and to describe the characteristics of those products and those characteristics are really going to be a little different from set of retail products or one off content product because they include things like the activation date for the subscription, the duration of the subscription, whether there are tiers and you can see in this RDio example here that there's an unlimited tier in a web only tier and whether or not there's tier fluidity. So if customers can upgrade or downgrade or switch between them and those are the differences in merchandising instructions from merchandising other types of products.
In terms of payments, subscriptions are going to be dealing with things like recurring billing which is sort of the obvious one but also things like renewal and cancellation options. The payment platform itself is very important for subscription because recurring billing bring with some other factors. Primarily among them dunning which is what happens if a customer's credit card is declined after they've entered it so a few much from now they move in their AVS verification fails or it expired and they another chance to go and to put a new expiry date. And so dunning management is part of the subscription billing platform that is not often seen on retail platforms.
And finally post sale service is often neglected compared to the other two but the backend experience for existing subscribers is also going to be very important and in the screen shot from Netflix we see some features here that allow customer account management, easy access to customer service, and also some calls to action for ancillary revenue generation. The second box there shows a sign of gift subscriptions which is a nice way of sort of monetizing from customers that have already subscribed.
So after all that, if your enterprise decided from the cost benefit risk and reward analysis that this is a model worth pursuing, what are some of the implementation options that are available? We're going to take a look at them in order from the highest profile to a few options that are sometimes not considered in the subscription landscape.
At a glance, the one by far with the big buzz that everybody is talking about is of course Apple's in-apps subscription service and this applies primarily to media content type such as periodicals, video and music, and the platform that deals with which is iOS, which is the iPod touch, the iPod and the iPhone. Payments are handled through the iTunes store platform. Cost implementation is pretty low. Apple is very good at providing developer tools and those APIs but of course there's sort of 30 ton gorilla in the elevators, the extremely high recurring cost effects to Apple's 30 percent revenue share in their license.
So the strength in going with this platform is of course access to what is essentially the premier mobile ecosystem. 160 million plus devices sold, probably the most desirable hardware on the market. An audience that's extremely active in terms of traffic. Some are from 2 to 10 percent depending on the market of web traffic is actually entirely on instead of iOS mobile devices which is a huge share and another key thing is that Apple sort of prove an effective funnel. We know the app store and those links and the in-app purchase funnels work extremely well and compared to any other mobile ecosystem. More people buy Apple apps and on any other platform.
On the flip side, so pursuing this limited of course to the iOS platform so pursuing is the only mono sort of eliminates Android, BlackBerry, even the web, another she was iTunes store billing. And with that comes some issues of customer data control. So by default, customers of Apple, they're not going to be sharing their customer data with you as a content publisher unless they explicitly opt in which for the CRM portion of your prescription model for things like ubiquity programs, it's going be a bit of a problem because you won't know who your customers are.
Also in the weaknesses column the "shuttle" restrictions, which basically means that Apple is going to be taking those 30 percent revenue share in-app purchases subscriptions and you're not allowed to provide a link out to a website which is a big deal there effectively forcing customers down the in-app purchase funnel. Now when that's coupled with their license requirement for their multiplatform price cap, it's extremely honorous for publishers.
Basically, their price cap is saying you must provide you cannot sort of increase the cost of the in-app subscription purchase to cover the 30 percent rev share while providing a lower price out on the web or through another channel. That's effectively and enforced price cap
Some of the opportunities that may be on the horizon for those pursuing this model, there's been some anti-trust movements, and Department of Justice and some of the EU is looking at possible antitrust action. And even beyond regulatory actions. Apple does have a history of sometimes floating trial balloons for example with their ad market program. They also introduce from fairly draconian requirements and numbers and then back them after the market reacted very badly to those. So that may be an opportunity in the future for those pursuing Apple in-app subscriptions.
Other strengths are for content owners. It's an instant platform. So for smaller publishers that have no other way of accessing subscriptions is sort of an instant platform. Strong multiplatform players again content owners that are also doing very well. Say on Android or in the web is currently in the iOS market they still benefit despite the 30 percent revenue sure.
And finally the opportunity is really the need to be hear factor. As a premier mobile eco system, they can be difficult sometimes to sort of market yourself as you know everywhere and on every mobile device unless you are on iOS as well. So the need to be here factor is you know, a major opportunity for being on the Apple subscription platform.
In the weaknesses column, again with the antitrust actions there may be some instability there. And as opposed to content owners that own their content. Content licenses are going to hurt. They already have varies and margins and the 30 percent revenue shares is just going to be untendable for the Netflix's and the RDio's and the Pandoras of the world. And also their restrictive customer data policies have mentioned this before are going to be severely impact CRM programs and the ability to sort of provide a consistent experience across all the mobile platforms. And if finally if you're not on iOS, again the need to be here factor is kind of flipped. You know, you're not on here.
So the next day after that came out Google announced it One Pass payment system and again this is primarily aimed at periodicals at first but they have may have mentioned that this may be extended to other media products and services in the near future. And the nice thing about the Google One Pass is that it is inherently multiplatform. It's going to be accessible. Content should be accessible on the web as well as on mobile devices. Except of course on iOS where if you want to pursue app subscriptions you're going to have to go with Apple.
Payments are handled through Google Checkout. Implementation costs with Google's history of providing pretty developer-friendly APIs is going to be relatively low and I've categorized the recurrent cost here as medium. Their revenue share is one third of what Apple's is but it's still much higher than some of the other alternatives that are available.
So I've mentioned some of the strengths already, the multiplatform nature where content should be available on the web and then mobile spaces is definitely great. The 10 percent revenue share if you're sort of bouncing in out against Apple's 30 percent looks pretty good, they offer a variety of pricing models besides just plain sort of weekly monthly and daily subscriptions such as the metered model which is quite nice.
There are no shuttle restrictions so if you want to provide alternative methods of signing up, redirecting users to a website you can do that, and compared to Apple, they've got relatively permissible customer data rules so it's an opt out in this case and by default, Google will share the customer information with the publisher.
On the weakness side, you've got to use Google Checkout billing which may or may not be a factor. In the past, historically a bit of a spotty record with sort of gaining acceptance of that but their subscriptions have to be fed to Google Checkout. 10 percent rev share is here again because it's a lot better than Apple's 30 percent but if you compare it to typical interchange fees, for say a credit card processor which is typically in the order of less than 1 percent to maybe 2 and a half or three percent at the top end. It's still pretty high.
Their funnel for getting users to purchase is a lot less proven than Apple's in-app model and because they're not providing sort of the entire plug and play package for mobile devices, there's got to be a little more work to get Google One Pass going on mobile devices.
Some of the strengths available here. Google's got a great brand. Very very trustworthy which will probably enhance user's sort of commitment to sign up for subscriptions on this platform. It's a pretty good foundation for multiplatform initiatives. We discussed some of data rules and the shuttle restrictions, etc. It's just generally a more consistent platform if you're going for a channel ubiquity.
On the threat side, there are no details yet on how this is going to play with Android market. Unless you're probably aware that the Android market also takes a 30 percent share. With that a 30 percent and Google One Pass at 10 percent. It's still unclear of how that plays out. There are of course historical issues with using Google Checkout as a billing platform. And again for content licensees such as Netflix, RDio, Pandora, 10 percent is still a pretty significant cut.
The third alternative for set of implementing subscriptions are outsourced subscription services such as Zuora, Vindicia, Authorize or PayPal, some of these are exclusively subscription billing platforms. Some of these are features and products offered by larger billing platforms.
The content types that these deal with are primarily web-based products and services. A lot of lifestyle services, a lot of business services. Sometimes with a little bit of content media thrown in but definitely not as many as the first. Are they handled most types of payments? So no Google Checkout here, no iTunes store, straight credit cards, PayPal’s, Electronic interchange. Implementation cost is going to be a little higher than prepackaged platforms but a lot of them pretty good APIs so implementation is going to be medium. And the recurring cost is probably going to be less half of what Google is. The work primarily on an interchange model. With fees sort of ranging in the 2 to 5 percent range.
These guys have very very strong presence on the web. Not so much mobile and very extensive monetization models for products and services. So again, metered, pay as you go, daily, weekly, most of them handle sort of combinations of those. A lot of them have pretty good service-oriented APIs and the lower interchange cost is definitely going to be a factor.
On the weaknesses side, most of them have pretty limited application right now or focus in the mobile space. They have been primarily web-focused for the longest time. So mobile they require some additional work. And a lot of them do not have some specialized features or sort of applications available for content publishers yet. Presumably they'll start pursuing that with the Apple and Google announcements but in as it stands primarily sort of services on the web and some strengths and [unintelligible] for enterprises with a custom requirements. There's going to be a fairly manageable cost of entry since these are software as service type platforms. They're going to be good solid platforms for channel. They're getting in to a variety of channels and customer data ownership tends not to be an issue here. You sort of deal with it, you keep that customer data and you deal with it as you please.
Some of the Threats and laws here and there are going to be issues with the walled gardens that the mobile technology companies are throwing up. So just because you have web-based subscriptions, doesn't necessarily mean it's going to translate one to one to say Android. And definitely non on iOS where if you want to be on that platform and do subscriptions, you're going to have to go with Apple.
Software is a service, sometimes limits customization possibilities for those enterprises that really need a custom solution. And for very high volumes with their interchange costs, you know it's sort of six and one half dozen of another. You kind of have to do a cost-benefit analysis based on your expected transaction volumes.
And the final subscription alternative for implementing this is basically the subscription features that are provided as part of a larger and overall ecommerce platform and these are going to handle whatever types of content or media or products and services that you want because they tend to be sort of customized. They're going to be available again primarily on web but because you sort of customized on top of that, there are good solid platforms for extending in to mobile and they're going to handle any type of payments based on your existing billing and payment provider service.
Implementation cost they're going to vary from medium to extremely high based on the typical customization costs for any given platform and the recurring cost is going to vary there is essentially an incremental cost over and above what your existing set of cost for transaction is for non-subscription purchases.
The obvious benefit of going with an existing ecommerce platform is full customization, and you know, extreme consistency with the way that your site and programs are set up. Their extensive monetization models because customize whatever you want and typically wants this to set up the interchange costs for processing the transactions are going to be the lowest because you're not paying an additional service to handle subscriptions over and above what you are already paid for transaction.
On the weaknesses side, there may be higher implementation cost involved. The cost of the customizations along with potentially higher support cost and the longer time to market. But those are all tradeoffs of course of pursuing any type of customized platform versus ready and prepackaged from market. It's going to allow very unique and complex features and models for those especially for large enterprises that are looking for very specific way and monetizing particular products or services.
And running everything off one platform of course is the best way to maintain customer touch points and instead of pursue with ubiquity model and again customer data ownership issues are not a factor when you're running on your own platform.
And in the threats column, there are going to be issues again with mobile market walled gardens so just because you're running this nicest to hear doesn't necessarily mean it translates on a one to one basis on Android and again especially again on iOS devices and of course the issues involved with keeping current with technology upgrades on the platform.
And again it really requires a cost-benefit analysis based on the transaction volumes that are expected for a particular enterprise which takes us really to the review of the webinar and what it takes to turn a visitor into a subscriber and some of the key factors that we've looked at here are really the fundamentals of pursuing the subscription model, they don't change with the introduction of new services. Just because Apple or Google has released a new service doesn't automatically mean that customers are going to suddenly subscribe to your product or service or content.
It is a demanding monetization model but one that has note the requisite rewards that go with it and for those pursuing subscriptions experience an access not at content itself aren't going to be king. It really is whose experience, the whole package the customers are going to be subscribing to. And that growth in those verticals is going to come from innovations and advancements and the packaging and delivery of that whole experience.
You're going to want to aim for at least two if you got three or probably rule the subscriptions base. You want to be ubiquitous, exclusive or amortized and then a few other things that we sort of looked at is not to forget that customer-relationship issues of CRM customer service tends to get amplified when you do pursue a subscription model. You're going to want to look for solutions that provide multiplatform and definitely mobile access to content. But because the technology companies are sort of taking a very long part to look at monetizing their platforms, you're going to have to consider the cost and benefit for each ecosystem individually. So you know, what makes sense for the web-based content is definitely not going to make sense for Android or BlackBerry and those will have to be sort of calculated independently of moving to the iOS base because each one has very different revenue sharing and licensing models that have to look at on an independent basis.
And finally based on all of the above, you're going to want to innovate strategic workarounds to maintain the big three, to maintain ubiquity, exclusivity and amortization. And some examples we looked at of that is for example time with Sports Illustrated attempting to enhance exclusivity by making digital their core product. Taking print subscriptions out of the picture or the upcoming decisions that Netflix has to make as to whether to negotiate or sacrifice some customer experience to move to browser-based delivery. All of these are examples of strategic workarounds to try to maintain platform ubiquity, content exclusivity and or amortization.
So that wraps up our survey of subscription monetization, the best practices and also the platforms that are available to pursue this model. Hope that you find it interesting and I hope that you find your way of winning the subscribers.
Alright. Thank you very much David. That was fantastic. If you have any questions on this topic, feel free to email David directly. His email address is there. And we also have a number of research papers and webinars and white papers on various topics in ecommerce specifically with how to sell digital goods and services. You can get that on our website www.elasticpath.com.
Also we would encourage you to subscribe to our blog www.getelastic.com. Speaking of research papers, we have a research paper that we're working on now that will be available on March 31st. You can get that on our website. It's The Future of Newspapers and Magazines in the Digital Era. So this is all about media companies can adapt to the changes that are happening in the space. We did a survey and we're going to talk about the results of that survey, the behaviors and the attitudes towards print and digital media.