Tech Brands Can Learn A Lot About Subscription Models From Apple Music

Apple has a history of shaking up the music industry. Starting with the iPod in 2003, the revolutionary company changed how we listen to and buy music. In June 2015, Apple continued its legacy by dipping a toe into a pool of subscription-based content with its latest product, Apple Music. Recent reports have Apple Music already seeing over 11 million subscribers, a number will likely continue to grow. This in mind, Apple proves an example for tech brands on how to secure success with subscription-based content in emerging markets. 

Why Subscription Based Content Works In Emerging Markets

There has been an overall shift towards subscription-based content that mirrors a change in overall business models as well. As companies are looking to increase revenue, and as users vie for more consistently provided content, subscription-based models provide a tangible solution. 

Industry experts have found that acquiring new, loyal customers is actually five to ten times harder than increasing revenue from existing customers. Take Netflix for example, with 40 million subscribers in the U.S. alone, and the expectation to add just 5 million each year, a large majority of their revenue stems from a maintained relationship with its customers. Similar services, like Amazon Prime, have retention rates estimated to be as high as 95%, showing that their subscription service customers aren’t going anywhere. 



In order to maintain increased revenue and to ensure returning business, subscription-based content is a logical next step. If the subscription model isn’t already baked into a brand’s business, there is immense opportunity for growth by building one. Brands that add subscription-based content will be able to increase predictable revenue to their company. Predictable revenues ensures security, and security ensues sustained growth.

These models aren’t just a fit for domestic companies and consumers. Consumers in these potential growth markets have a hunger for content and are looking for simple, cost effective ways to consume content. By offering a monthly payment option at a lower cost than the typical pay as you go plan, consumers in emerging markets are likely to become a source of returning revenue. 

What Tech Brands Can Learn from Apple

Apple is a strong example for tech brands to find success in emerging markets. Typically a company that is not concerned with price competitiveness, but with the all important brand reputation and user experience, Apple has made an effort to adjust the price of subscription based service in emerging markets to make a greater impact. In fact, pricing is a huge differentiator in growth markets for Apple. In India, Apple Music only costs $2 a month. In Brazil, Indonesia and Thailand, the music streaming service is only slightly more expensive at $5, $6 in Hong Kong and $7.50 in Singapore. 

Apple’s efforts in growth markets are simple, yet effective. They haven’t priced their product out of the market. They’ve taken caution to ensure that their priority matches that of the consumers: affordability. Moreover, they’ve capitalized on an already established household brand name and a historically positive user experience in order to do so successfully.

While price may be the most important factor to consider when aiming for success in emerging markets, localized content cannot be forgotten. Consider the needs of consumers—for example, Americans may be different from Brazilians and both will be different from mobile users in Vietnam, so content providers must adjust their offerings around pricing and content accordingly. Once a brand establishes itself as a price-conscious, content-relevant option in these new markets, there is vast opportunity for expansion.

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