You’re reading the latest edition of Subscriptions Weekly; you’ve started the weekend on the right foot. 

In this issue, we’ll learn more about scaling subscriptions and what makes digital payments the future of subscriptions. We’ll review Amazon’s new prescriptions subscription, Peacock’s Q4 2022 results, Twitter Blue’s upcoming ad-free plan, and Shopify’s new pricing effects on revenue growth. 

When should you scale your subscription?

Mark Stiving, Chief Pricing Educator at Impact Pricing, shares the answer: Scale when your monthly revenue is significantly greater than your cost of goods sold (COGS) plus the cost of sales and marketing. 

Specifically for subscription businesses, scale only when your viability metric of lifetime value divided by customer acquisition cost (LTV/CAC) is greater than 3. Learn more on Forbes.

How digital payments disrupt our entire ecosystem

Propelled by the shift in consumer behavior, the adoption of digital payments has accelerated economic change–enabling the explosion of the Embedded Finance model and a compound effect on customer financial interactions throughout a digital experience.

How are companies navigating the ecosystem and merging payments into their businesses? The answer is data. Bringing modern payments to emerging markets creates a world of opportunity that bridges the gaps between the services people need and the solutions necessary to facilitate them.

In the process, companies collect a wealth of data about consumers that isn't possible to trace or understand in a cash-based model.

The State of Subscriptions report provides the acquisition, growth, churn, and payments insights you need to set yourself up for success in 2023.

Amazon launches monthly subscription for prescription medications

RxPass is coming to U.S. Prime members. This new $5 monthly drug subscription provides generic medicines to treat over 80 common health conditions–including high blood pressure, hair loss, anxiety, and acid reflux. The fee includes the cost of delivery, added to Prime users’ existing monthly subscription. Read more on The Verge. 

Peacock tops 20M subscribers as losses widen

Peacock had its best quarterly result since its 2020 launch, reaching 20 million paying subscribers in Q4 2020, much of its success from its sports programming–FIFA World Cup boosted those numbers. Although the platform nearly tripled in revenue to $2.1 billion, its loss widened again compared with the previous year–noting an adjusted EBITDA loss of $978 million. Learn more on TechCrunch.

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A no-ad subscription might be coming to Twitter Blue

Twitter will roll out a new higher-priced Blue subscription that doesn’t show ads. Elon Musk says the company is working to decrease the frequency and size of ads on the platform. Its current $7.99/month plan promises 50% fewer ads when compared to non-verified users–although this feature hasn’t rolled out. Read more on The Verge.

Shopify’s price hike is a tailwind for stock

Citi analyst Tyler Radke views Shopify’s price increases as incrementally positive for the company's 2023 outlook. After announcing an average 33% increase, Radke ran a scenario analysis to show the potential benefits to revenue, suggesting a ~5% incremental upside for subscription revenue in FY23 and a ~1.2% lift in total revenue. Learn more on Yahoo!

Join Recurly at these exciting events

On-demand: The 2023 State of Subscriptions webinar. Set your team up for success with insights from more than 2,200 global brands. Learn the upcoming industry trends and consumer demands. Watch now.

February 2nd: Recurly platform demo and Q&A. See first-hand how you can reduce churn, maximize revenue, boost growth, and improve payments. Come armed with your subscription questions! We'll be happy to answer them. Save your spot here.

From the Recurly blog


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