For brands selling digital goods and services, subscription billing is the best way to monetize the service. As such, companies evolve their approach to subscription billing by adjusting and making choices on their sources of revenue. Read how brands change and modify their subscription billing approach. Know more about subscription billing solutions: https://www.vindicia.com/solutions/subscription-billing/

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Brands Evolve in
their Approach to
Subscription Billing
© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

2. 2
Brands Evolve in their Approach to Subscription
Billing
© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
Subscription billing is one of the best ways to monetize a digital service, but it can be
challenging to settle on a rate that is effective for both users and the business. As a
result, companies often adjust their sources of revenue over the years, often making a
few surprising choices along the way. Netflix and WhatsApp both recently announced
significant changes to their subscription options, with Netflix upping its rates and
WhatsApp eliminating them altogether.
Netflix raises rates for HD
Netflix just bumped up its subscription fee from $7.99 to $9.99 per month for HD
streaming users. The starting subscription price for HD has been $9.99 for some time
now, but now those who are on grandfathered plans will also have to pay up, The Next
Web reported. Users who want to remain at the lower rate will have to sacrifice screen
clarity and go for standard definition instead.
Many are already criticizing the choice, believing it may alienate some of Netflix's most
loyal users. According to the Next Web, with rising competition in the streaming video
space, it may not be smart to increase prices now. According to the publication, Netflix
doesn't expect an unusual amount of churn as a result of the decision, but it remains to
be seen whether the brand's expectations are correct.

3. 3© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
Netflix will raise prices for grandfathered subscribers.

4. 4© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
WhatsApp eliminates subscription fees
Meanwhile, WhatsApp, a cross-platform messaging service, recently announced on its
blog that it will eliminate subscription fees on its platform, raising the question of how the
Facebook-owned company will continue to sustain its service. At 99 cents per year, the
subscription fee was never substantial to begin with, and users are only required to pay it
after a full year of free service. However, the company still ran into issues with its
customer base. For instance, many users don't have a debit or credit card number, which
made it difficult to sustain their accounts after the first year.
While you might assume WhatsApp will substitute third-party ads for its subscription
revenue, the company argues this won't be the case. Instead, it will partner with other
companies to allow these businesses to communicate with WhatsApp users through the
platform. As Business Insider pointed out, this "app-within-an-app" approach mirrors that
of Chinese messaging app WeChat.
"The app-within-
an-app model
could be the
future of mobile."
WeChat allows users to access many different services within
its service, including the ability to hail taxis, purchase movie
tickets and even donate to a charity. Essentially, this enables
users to make in-app payments. In other words, rather than
gaining revenue from consumer subscribers, WhatsApp will
likely switch things around to gain recurring payments from
businesses that want to reach consumers through the app.

5. 5© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
The change represents an interesting shift and also demonstrates a new potential
direction for the app environment. According to Venture Capital firm Andreesen Horowitz,
the app-within-an-app model could be the future of apps and mobile commerce. For
instance, the WeChat app hosts millions of apps in its ecosystem, much like the Internet
hosts Web pages.
Powered by subscription billing
In a rapidly changing digital environment, companies need the support of a
versatile subscription billing platform that can evolve with them, whether they need to
increase fees or change to a different form of revenue generation. Moving from
traditional subscription billing to micropayments could be extremely difficult without the
right software to back you up. In addition to versatility, it's crucial that companies can
utilize user data to make informed decisions regarding any substantial changes to their
subscription billing fees. Subscription-based models could be the future of payments, but
it's important for brands to invest in high-quality partnerships to make it happen.

6. 6© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.
About the Author: Bryta Schulz
Bryta joined Vindicia in 2013 and serves as Senior Vice
President of Marketing. She is responsible for building brand
awareness, creating go-to-market strategy and promotion, and
driving growth. With over a decade of executive level marketing,
product management and PR experience, Bryta has led
marketing teams in enterprise technology and SaaS companies.
Her experience includes heading product marketing at GoGrid,
PGP, RSA and Symantec and business development and
product management positions at Xcert, Thales, and
Persistence Software. Bryta holds a MA in Translation from the
Johannes Gutenberg University Mainz and an MBA from the
University of Reutlingen.
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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.