Subscription Services: $14 Trillion Opportunity
When we look at cryptocurrency, it is important to focus upon the aspects of business that are extremely profitable. Here is where we see the targets that will help to increase the value of the industry while shifting the revenue stream.
At present, there is very little business and commerce done utilizing cryptocurrency. Most concentrate on market activity, looking for the next 100x token. There is nothing wrong with this. However, the success going forward is going to come from entrepreneurs, not traders.
When we think of names like Jeff Bezos, the Google boys, and Mark Zuckerberg, what comes to mind? These were some of the leading figures in the Internet "revolution". Their businesses became wildly successful, some of the most valuable in the world. This is something to keep in mind with this new industry.
It is going to be the builders who reap the enormous rewards. Fortunately, with tokenization, the net can be much wider than previously.
That said it is vital that we start discussing an opportunity that is enormous. To date, there is not much in cryptocurrency that deals with this. However, it is rapidly becoming the fastest growing business tool there is.
We are talking about the subscription and it is enormous.
$14 Trillion
It is estimated that the market capitalization of subscription based services is over $14 trillion. This is the golden nugget of the last decade. Many businesses adopted this model while the number of subscriptions each household had has skyrocketed.
Consider this list:
- Amazon Prime
- Spotify
- Netflix
- Streaming services
- Twitter Blue
- Patreon
- Gym memberships
What do they all have in common?
They each have monthly (or annual) billing. That means recurrent revenue without making an additional sale.
Consider the traditional business model which is basically one off. A company makes a sale for a product or service and that is the end. To get more revenue, it has to repeat the process.
With a subscription service, money is coming in monthly.
Probably the best example of this is the insurance business. Think about it. We make regular payments on a monthly or quarterly basis. This is done by either charging our credit card or hitting our bank account. Either way, the company keeps getting the revenue for selling us the policy once.
For this reason, if two companies with the same revenues, the one offering subscription services will have a much higher market capitalization, usually around 8 times larger.
Building Subscription Businesses Using Cryptocurrency
This is going to be one of the gold mines for cryptocurrency. Entrepreneurs who understand how it will be beneficial to incorporation the subscription model into their business will realize much larger revenues.
Here we see where the infrastructure is simply not at the point for cryptocurrency to excel.
Most wallet system do not allow for this. Obviously, one of the main factors when it comes to this is the charging of a credit card. At present, few of these are tied to crypto. That means we have direct payments.
The challenge is that the wallets are designed for one-off transactions. Few do allow for recurrent payments. Hive is one blockchain that built that into the base layer. With that system, one can set up a recurring payment schedule over a 12 month period of time.
While this is a step forward, one drawback is the money has to be available in liquid form. This is not a charge card. If the coins are put into savings, they are inaccessible.
Here is where the industry needs to start developing with this idea in mind. The coins or tokens that are tied to this capability are going to carry more value than those that do not.
When we look at the magnitude of what we are dealing with, trillions in value is on the line. Someone is going to figure out how to access this.
Utility is a powerful mechanism. Having a feature advantage certainly can catapult an ecosystem forward.
New System
According to research, in 2020, around 35% of companies offered some form of subscription services. This is a target rich market which cryptocurrency is unable to access. For massive adoption and growth, this is going to be required.
We discussed the idea of decentralized media and how things are changing in the broadcast realm. At the same time, sports coverage is also facing disruption. The attention economy is shifting and Web 3.0 has a part to play. However, before that can happen on a large scale, some of the basics are needed.
Just consider how much money is billed monthly through this mechanism. It is something that cryptocurrency is essentially unable to tap into. What is the solution? That is going to have to stem from technical development. Perhaps smart contracts could handle this. However, to fully be maximized, we will need some type of credit system.
Could staking returns factor into it? For example, perhaps the user stakes a certainly amount of a coin or token which provides a return which is used to pay the subscription services.
There is an opportunity to create entirely new systems here. We are basically building from the ground up. When it comes to sheer volume, solving this issue could be worth billions in revenues.
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Posted Using LeoFinance Alpha
Hmm, I see you have an idea there. But here's the thing wht sort of subscription service do you have in mind, and wht markets are you targeting exactly is it. Keep in mind that whatever we create, will be a decentralized version of something that's already been created, so how does the value factor in...
Well for individuals or businesses it might not be decentralized. There can be private pay walls for content, as an example, that is encrypted on chain but not seen unless a subscriber.
The idea is more about the payment system more than anything else. How about a similar service to spotfiy, just as an example, that can allow for recurrent payments. Again, most send it to their credit card, hence the idea of requiring a credit service of some sort.
Posted Using LeoFinance Alpha
Hmmmm....
It's really very imperative to promote businesses in Crypto to help empower the Blockchain.
This is something that I, as a writer, has been interested in for a long time. The reason I use Substack is because it allows for paid-access to written content, a feature that has been largely ignored and forgotten by indie writers, apparently. Every major newspaper website and media outlet has some sort of paywall to content, and few want to pay for that propaganda, but on the indie side, we don't even have any options for that, minus maybe something like https://paragraph.xyz, but that's dependent on Ethereum, and that opens up the creator to more issues rather than getting rid of them all.