Subscription Products

Is there any better time in history to be making a subscription product? Every major tech company (excluding Facebook, which is testing private group memberships) has deep roots in subscriptions: Amazon has Prime, Apple has the App Store, Microsoft has Office 365, and Google has the Play Store (Drive, YouTube Red, and several others). This isn't isolated to just the tech behemoths either—there are many types of products that are moving more towards subscription-based models, from clothing (Stitch Fix) to gaming (Fortnight) to meditation (Calm) and dating (Tinder).

And they are working really, really well. Match Group reported rocketship Q2 numbers for Tinder with 3.8 million subscribers and is pace to 2x last year's revenue to $800 million. Netflix posted slightly disappointing result for the quarter, but still has 130 million subscribers, half of which are outside the US. RevenueCat, a company that recently launched from YC's summer batch, makes a developer tool that claims to make it trivial to add subscriptions to your app.

I really enjoy the subscriptions I'm paying for. I used to look at subscriptions as a nuisance or as a sign that I was going to overpay for frozen value. Now they signal to me that I pay for the product to continue to get better. I subscribe to Prime, Spotify, Day One, Instapaper, Headspace, 1Password, Google Drive, and YNAB. I'm sure there are some that I'm missing, and some that I will invariably pick up as the year moves on, but wow these app are all so good.

Oh yeah, and online journalism is viable again for the New York Times with a $24 million profit in Q2 in large part to—digital subscribers.

Update: Apparently Apple invited 30+ app devs to a meeting last Spring to recommend they move from selling apps at a low upfront cost to a subscription-based SaaS model. Fascinating read!