What we can learn from the Amazon and Apple subscription changes…

Blog by Megan Bricknell

Recently, both Amazon and Apple have made changes to their subscriptions services that we could all learn from:

Last month, Apple announced a price increase on users to Apple Music from £9.99 to £10.99 per month, and Amazon has changed the way that users listen to Amazon Music on devices like Alexa. In this blog, we’ll look at why…

Apple Music Price Increase

As of 2021, 88 million people subscribed to Apple Music and this made approximately $5 billion of Apple’s revenue in the year, accounting for 6.4% of Apple’s total services revenue. In the United States, Apple music has more subscribers than Spotify, but Spotify has more in Europe and South America.

In November, Apple announced a price increase from £9.99 to £10.99, an additional £1.00 Per month, and £12.00 per year. In the grand scheme of things not a lot for an average user to stomach but overall, that’s;

  • Additional Monthly Recurring Revenue of £88 Million
  • Additional Annual Revenue of £1.56 Billion

Sure, overheads may have gone up a little bit and some customers may look at this as an opportunity to cancel the subscription. But for it not to pay off, they would have to lose at least 50% of their existing customers.

Amazon Music Platform Change

Amazon has changed the way that users can listen to music via Alexa. The major update and changes that have come through for the virtual assistant now mean that dozens of people are left attempting to play their favourite artists and albums to no avail.

Instead of specific tracks, Alexa will shuffle other similar artists into the playlist, whether music lovers like it or not.

So, for example, if you asked your Alexa to play ‘Let it Be’ Alexa would find songs like ‘Let it Be’ and play that instead. It would be like going to a restaurant ordering a burger, and bringing out something like a burger. Madness!

Why have they done this? Well… Amazon offers an upgrade to the basic Amazon Prime Music subscription that will allow you to listen to any song on demand for an additional £6.00 per month. This is a great way to get people to upgrade as they feel they have no choice, and it’s so simple and easy to do – you simply have to say ‘Yes’ to Alexa.

If 20% of their subscribers did this, it would add an additional.

  • Additional Monthly Revenue of £66 Million
  • Additional Annual Revenue of £792 Million.

Again, a few people may cancel the subscription, but it’s very unlikely they will.

What can we learn?

Price increases and subscription changes need to be handled well. The Apple price increase is such a small change most people will stomach it and accept the no additional value, whereas the Amazon change is a big change in how the current service operates, which will force users into spending money with them for the same features they had before.

If you have a base of customers that you bill via Direct Debit. Candio can help increase your recurring revenue whilst bringing new services to your customers.

Head over to our get in touch page and a member of our partner support team will contact you.

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