Every week, we bring you the top stories and analyses from the global Subscription Economy.
Lyft’s $299 subscription plan is launching to the masses
Excerpts from an article by Megan Rose Dickey in TechCrunch
Lyft has been testing versions of an all-access monthly subscription plan since March. Now, it’s ready to make it available to everyone in the U.S.
Lyft’s All-Access plan costs $299 per month for 30 rides (up to $15 each). Let’s say your ride goes over $15, you would just pay the difference. All other rides past the initial 30 you take that month are discounted five percent. It’s worth noting that rides do not rollover.
Lyft’s subscription product is all part of the company’s plan to get people to ditch their own cars (except the people who use their own cars to drive around Lyft customers). Earlier this year, Lyft CEO Logan Green said the company was moving in a direction to achieve for transportation what Netflix achieved for entertainment.
Specifically, Green said, “We are going to move the entire industry from one based on ownership, to one based on subscription.”
Read the full article here
Fender Is Expanding its Audience Through More Than Just Guitars
Excerpts from a Q&A with Fender CEO Andy Mooney by Amy X Wang in The Rolling Stone
You’re competing with the entire leisure market and the Internet-spanning universe of distractions. How are you getting people to spend free time on fretted instruments?
One of the things we found in the research is that the closer people get to a year in terms of learning how to play guitar, the more likely they are to commit to the instrument for life. We have 65,000 people taking lessons on Fender Play, predominantly on a month-to-month basis. Over the last couple of days we offered a 25 percent discount for people to sign up for an annual subscription; then we punched that up by saying for the duration of your subscription you can get a 10 percent discount on Fender gear. We’ve seen a dramatic response just in the first few days. Learning any instrument, piano, guitar — it’s a time commitment and we want to really provide as much incentive for people to commit the time.
Another thing I found fascinating was that it’s playing into a bigger societal trend. It’s funny, some of the most popular apps in the App Store are meditative apps or apps that direct you toward investing in yourself. There are some subsets of the audience that want to learn guitar in the quickest possible time. But there’s a growing, potentially larger group that is taking on guitar as a fundamental new life skill. A lot of it are people who are closer to retirement age who have the time and the money to invest in either relearning an instrument or learning for the first time.
Fender Play, your digital lessons program, is more than a year old now. Where does it fit into Fender’s overall strategy?
The way we look at it, we have an interconnected suite of digital products. Things like Fender Play, our online tuner Fender Tune, and Fender Songs, a product in development that generates chords for any song that appears on your streaming device within a few seconds. We haven’t launched that product yet because we’re working through developing the business model with publishers and labels. But we see all these core products and more to come in the future as being rooms in a different house; targeted toward different facets of playing guitar and enjoying music.
We have a goal of getting 100,000 users on Fender Play by the end of this year. We really believe that the more people we get onto Fender Play, the more it will further create growth in the industry, over and above what we’re seeing coming from a growth in streamed music and a growth in live music attendance. We’re still very excited about the future.
The digital learning business is much more seasonal than we anticipated. The biggest day of the year is December 25th, where, as you can imagine, somebody gets a new guitar and goes straight to their computer asking how they’re going to get lessons. But there’s a real intensity of interest from about Black Friday to the end of January, then it tapers, picks back up with back-to-school and crescendos again December 25th. So this is only the second season of intensity we’re going through. It’s much more seasonal than guitars themselves.
Read the full interview here
Rent the Runway Wants to Lend You Your Look
Excerpts from an article by Alexandra Schwartz in The New Yorker
In 2016, Hyman and Fleiss launched Rent the Runway Unlimited, a subscription service that initially aimed to help professional women dress for work, and has since expanded to cover most of their daily fashion concerns. For a hundred and fifty-nine dollars a month, a customer can keep up to four items at a time, rotating out any piece as often as she likes.
Rent the Runway has some ten million members—defined by the company as people who have created a log-in to its site—spread across the country. Subscriptions, which have increased a hundred and fifty per cent year over year, currently account for half of the company’s revenue.
Rent the Runway has, since its founding, raised more than four hundred and fifty million dollars in funding. (Condé Nast is an investor.) At the time of its last venture round, in December, 2016, the company was valued at eight hundred million dollars, and this, Hyman pointed out, didn’t take into account the subscriptions boom.
Read the full article here
Scribd And The New York Times Team Up For Publishing’s Next Trend: Subscription Bundling
Excerpts from an article by Adam Rowe in Forbes
Reading subscription service Scribd has teamed up with The New York Times. They are now offering their content in a $12.99-per-month subscription bundle that will allow subscribers digital access to The Times’s journalism in addition to Scribd’s own vast collection of more than 1 million books, audiobooks, newspapers and magazines. Both the legacy newspaper operation and the all-you-can-read book startup stand to benefit, as the deal will grow subscriptions for both brands. It’s also among the first high-profile attempts to try what might turn into publishing’s next big trend: Bundling subscriptions together.
“Subscriptions have become an important business model,” Adler told me, “because they offer a great user experience for consumers and recurring revenue for platforms and content owners. We believe the next big business model for publishers is going to be bundled subscriptions where consumers get multiple services for a single price. This will lead to a better experience and a better value for consumers, which will lead to a broader number of people paying for content, and ultimately incremental revenue for publishers.”
Read the full article here
For more on what’s making news in the Subscription Economy, check out Zuora’s Subscribed Magazine!