What Is Everybody Doing on Discord? (wsj.com)

The money quote, literally, on subscription v. ad models for social platforms:

"You’re bank­ing on mak­ing more rev­enue from a small sub­set of pas­sion­ate cus­tomers will­ing to pay for the prod­uct than you could from show­ing ads to the whole cus­tomer base....It’s risky to rely on keep­ing con­sumers pay­ing over long pe­ri­ods of time, but beau­ti­ful if it works."

Read that carefully. It's risky only because you might not achieve theoretical maximum revenue through a subscription model. The ad model could bring in more revenue than subscriptions...that's the risk you're taking as a business owner when you choose a subscription model over an ad model.

As most business owners know, some risks are worth taking.

tags: tech finance daystream discord

posted by matt in Tuesday, March 9, 2021