Unpacking The Subscription Economy (Series) — 3. The All-You-Can-Eat Library Model
A subscription offering which involves offering a buffet of content to subscribers
This series of articles follows on from an article I published recently, titled “Unpacking The Subscription Economy”, where I mentioned that subscription businesses are more valuable and appealing to investors than traditional businesses, because they are more predictable to operate and they extend the lifetime value of a customer. This article looks at The All-You-Can-Eat Library Model.
The All-You-Can-Eat Library Model
The All-You-Can-Eat Library Model involves offering a buffet of content to subscribers. Movie-sharing services like Netflix and Amazon Instant Video along with music-sharing services like Spotify are large, famous examples of this model.
Other examples of The All-You-Can-Eat Subscription Model include Ancestry.com, where for around $20 a month you can rent access to a massive library of content that helps you piece together your family tree; GameFly (video games); EReatah and Oyster (e-books); and Lynda.com (how-to courses).
Even very small businesses can leverage The-All-You-Can-Eat Library Model. In 2012, Joshua Jacobo, a 28-year-old artist, couldn’t believe the cost of a good art education. He noted that students were paying a fortune and getting third-string teachers, and that access to art education was severely limited by geography. Jacobo set out to “democratize art education” by creating a library of how-to classes led by real artists.
Bootstrapping his start-up with $70,000 of his own money, Jacobo invited artists to partner with him to build the site. The artists taught lessons, which Jacobo and his team videoed and posted to the New Masters Academy site.
Jacobo began by charging $19 a month for access to all of his content, and now charges $29. By early 2014, the Academy was up to 2,000 worldwide subscribers and 350 hours of video lessons. Each month, the Academy slices off a portion of its revenue for the instructors, who divvy up the pool of cash based on the amount of content uploaded.
Who This Model Works Best For
Consider offering The All-You-Can-Eat Model if you have:
- A library of “evergreen” content — or the wherewithal to acquire one; and
- A legion of existing “fans” (blog, Twitter, LinkedIn) who already consume your free content.
What The Insiders Say
- Successful All-You-Can-Eat Model operators sprinkle enough new content into the offering to keep subscribers loyal while relying on a large library of “evergreen” content as the foundation of membership.
- To prevent subscribers from “cherry picking,” it may be necessary to give customers an ultimatum: subscribe to the entire library or lose access.
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