# On subscriptions

Source: https://danromero.org/on-subscriptions.html
Kiwi News: https://news.kiwistand.com/stories/On-subscriptions?index=0x682cd1389cc73661ed13745ae1ea4d45e16ed8578154cd5275e90fbe2da4ab0aade878ff
Submitted by tim on 2025-05-20 UTC, 1 upvote, 0 comments

## Summary

Dan Romero argues that subscriptions are growing in the 2020s after free-with-ads dominated consumer apps in the 2010s. He cites several reasons: consumers now judge whether a category is worth paying for, streaming services like Netflix and Spotify show a large paid market, and companies find they monetize less well than Google or Facebook. He also points to better subscription management infrastructure, such as managing subscriptions through iOS, and to interest rates returning, with markets caring more about revenue and free cash flow. Romero adds that paying changes the relationship from "user" to "customer," shifting product choices from time spent toward delivered value.

## Article

Dan Romero

November 1, 2022

Most consumer apps during the 2010s monetized with a free with ads model because:

Consumers weren’t paying for many online subscriptions (beyond an internet connection)

Google, and later Facebook, did so well with that model

Payments infra was bad (pre-Stripe, pre-Apple Pay and in-app subscriptions)

Zero-interest rates made capital relatively cheap and the market valued “growth and future profitability”

Subscriptions seem to be growing in popularity in the 2020s:

Consumers are savvier for a given category on whether they value free but time spent watching ads or paid with no ads, e.g. the success of streaming services like Netflix and Spotify shows there’s a big market here, esp. in developed countries. Amazon Prime is another example of a subscription that has, arguably, grown in value over time (started with free shipping, now video streaming, etc.)

Companies are realizing they don’t monetize as well as Google or Facebook (lack of scale, lack of in-house talent, etc.)

Infra to manage all of these subscriptions is better, i.e. managing all of your subscriptions through iOS is significantly better than “call this 1-800 number of this newspaper’s billing department to cancel” experience

Interest rates are back and markets seem to care about revenue, free cash flow, etc.

Free with ads will likely always be a popular (if not the most popular) option for most Internet services. However, there’s an important shift that happens when you pay for something: you go from being a “user” to a “customer”. So rather than making product choices that optimize for “time spent” (which ultimately translates into ads viewed and revenue), you can make product choices that deliver “value” (measured through customer retention, churn, NPS, etc.). cf. “If you’re not paying for the product, you are the product.”