“The Geyser” launched just over five years ago.
The reason it launched emanated from the theme driving most of the positive change across the digital economy ever since.
That theme is how the digital economy writ large — and the creator economy in particular — has embraced recurring revenues via subscriptions.
- One of the first posts here detailed how companies were moving strongly in this direction — from the New York Times to Uber.
That trend has only accelerated, both broadly and strongly.
The innovation of Substack kicked off this particular publishing experiment. Finally, a prolific, niche, expert writer could get paid directly by customers.
Experts flocked to the platform, and competitors began to ramp up to seize the opportunity.
Platforms like Patreon began offering creatives ways to have small recurring payments smooth out their cashflows and support their growth initiatives.
Suddenly, hobbyists became semi-professionals or full-time professionals, with the money in many cases proving sufficient to motivate a level of commitment that free blogging tools seldom generated.
Historians, business experts, critics, artists, scientists, chefs, musicians, and journalists have been among those generating millions in subscription revenues.
- The results are asymmetrical — a few dozen writers earn the most — but the skew is still favorable to a large pool who like having a paying hobby and serving a devoted audience.
How widespread has the embrace of subscriptions and recurring revenues become over the past few years across the digital economy? Here are some statistics worth pondering:
- 81% of 18-34-year-olds in the US have Amazon Prime subscriptions
- 68% of all ages in the US have one
- Microsoft Office has 345 million subscribers worldwide
- Disney+ has more than 100 million paid subscribers
- Spotify has 220 million premium subscribers
- Apple Music has 88 million
- Netflix has 239 million paid subscribers
- There are 8.6 billion mobile phone subscriptions in the world
- That’s 117 per 100 people, because so many people have multiple phones
- ChatGPT launched with a $20/month subscription model
- Most software purchases now are subscription-based SaaS
- Cloud storage, videoconferencing apps, sales trackers, workplace collaboration tools, project management systems, databases
Subscriptions give consumers leverage over producers by aligning their interests and driving quality up.
- They provide producers with reliable revenues, so are generally valued at 2x transactional revenues.
- The recent report on the OA market by DeltaThink seems to reinforce this rule of thumb, as 49% of the market by articles is OA, but only 20% of the revenues:
Managing recurring revenues has become easier for both consumers and producers, as various ecosystems help consumers track and assess them while innovations in payouts make revenue realization a piece of cake for producers.
- Smoother e-commerce has made subscribing easier than ever.
Supporting creatives has become a quiet revolution as people drop small monthly amounts into the subscription coffers of creatives they enjoy and want to see continue.
So, for the subscribers to “The Geyser,” thank you. You are in the mainstream of a movement toward value and aligned interests. I hope you’re finding the content here reliably interesting and insightful. I work hard to find interesting information, and also to filter out noise — these days, that’s just as important, if not moreso.
- If you haven’t subscribed yet, I invite you to join the hundreds who receive all the benefits. I’ll work just as hard for you.
What a nice ride so far.