carrier billing

Subscriptions: Increasing Revenues with Carrier Billing

19 November 2018
Carrier Billing

Digital subscriptions have increased drastically with Deloitte predicting that by the end of 2018 50% of adults in the developed world will have at least two online subscriptions – primarily within TV, movie, music, and publications. By the end of 2020, they have predicted that 20% of adults in the developed world will have 10 digital media subscriptions, proving that digital subscriptions are set for a boom in the next few years.

Content providers with extensive catalogues benefit from subscription models rather than one-off purchases as it provides steady revenue streams for the business. Subscriptions make it easier to maintain customers as they can choose a plan to suit their needs while also having the ability to upgrade, downgrade or cancel the service as required.

Subscriptions can generally be classified into two categories of monetisation, freemium and premium. The freemium model gives customers a sample of premium features and content for free, subsidised by showing the user ads. Music streaming services are a well-known example of this, the likes of Spotify, Anghami and Deezer let users sign up for free and stream their favourite music, however, will be served adverts throughout the user experience. Ad-free streaming can be enjoyed if the user wishes to sign up to their premium offer for a monthly subscription fee.

Spotify Freemium Subscription

Premium subscriptions require the user to pay upfront before getting access to the service. For this reason, premium models are generally best suited to branded or well-known providers like Netflix and Amazon Prime. By offering a free trial and allowing the subscription to be cancelled at any time these tv streaming services reduce the potential risk to customers if they do not want to continue with the subscription.

Netflix premium subscription

Why use Carrier Billing for subscriptions?

Carrier billing gives content providers the ability to offer a complementary payment channel to the likes of credit card and PayPal payments while helping to increase customer conversions through the following features:

  • Two-Click Payment Flows

Two-click subscription payments do not require the user to enter their mobile number or confirm their purchase with PIN verification. This enables a faster checkout experience which has been proven to increase conversion rates and satisfy customers as their experience remains uninterrupted.

  • Seamless User experience

Minimising the number of steps a user is required to take to subscribe to a service is key. User opt-in journeys should be clear and free of potential distractions to avoid abandonment. Carrier billing offers a seamless user experience as the most information the user may have to enter is their mobile number and a PIN and for some mobile operators, this is replaced by two-click payment flows.

  • Flexible Price Points and Frequencies

The right price points and subscription frequencies are crucially important especially when entering new markets. By understanding digital buying habits, income and ARPU’s in target markets, content providers can ensure that the subscription is priced affordably and at frequencies that perform best in the region. Carrier billing supports flexible price points and supports daily weekly and monthly subscriptions.

  • Free Trials

Free trials are a great way of attracting new customers and with carrier billing, subscription providers can manage free trials to select a period of time suitable to their needs from a minimum of 1 day.

  • Fall-back Pricing

Carrier billing offers fall-back pricing to content providers. Fall-back pricing works by charging the subscriber a fraction of the subscription cost if they do not have sufficient funds. For example, for a weekly subscription, the user would be charged a daily price for a day’s access.

By enabling fall-back pricing content providers are still able to generate revenues and customers are able to enjoy access to the service

With subscriptions set to grow massively in the coming years, carrier billing will undoubtedly play an important part in helping companies who rely on the subscription model to quickly access new markets and grow revenues.

Carrier billing compliments the subscription model by offering great flexibility in terms of charging and allows service providers to offer truly frictionless experiences.

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