Making the Web's Subscription Economy Hum

Photograph by Alistair Berg/Getty Images

As Web businesses embrace subscription business models to sell consumer goods, the benefits are clear: reduced customer acquisition costs, predictable inventory requirements, and steady cash flow. Last year research firm Gartner calculated that by 2015, more than 40 percent of media and digital-products companies around the world would use subscription services for their fulfillment, billing, and renewals. The challenges in relying on subscription models include controlling customer churn, managing credit-card charge-backs and delinquent payments, and ensuring the security of customers’ financial data.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.