The Subscription Business Model: How to Sell Once, Earn Forever

There are so many ways to make money as a modern creator. Each comes with their own set of challenges. 

Perhaps you have a YouTube channel that you monetize through AdSense, but ad revenue is hit and miss and very dependent on publishing new content. Or you monetize their Instagram profile with brand collaborations. Maybe you sell one-off products (such as online courses) to your audience.

All of these methods are great starting points. But you need to think more about longevity and sustainability if you want to become a successful business owner. 

You’ve heard of subscriptions and memberships and want to figure out if the subscription business model is the right fit for your content, current goals, and level of experience.

You’re bang on the money: experts predict that the global subscription economy will be worth $687 billion by 2025.

This piece covers everything a creator needs to know about subscription business models to get you ready to hop on the subscription bandwagon.

We’ll show why subscription businesses (and by extension, memberships) are one of the best business models to build a sustainable source of income, complete with tips on how to take your own subscription business to the next level.

What is the subscription business model?

The subscription model is where subscribers pay a monthly subscription fee at regular intervals for access to exclusive content. This model can provide creators with a consistent revenue stream—subscribers can access premium content as long as their subscription remains active.

How the subscription business model works

When you hear ‘subscription model’, your mind might go to the subscription box businesses that boomed in the late 2010’s. You might even have paid for some subscription boxes yourself!

But, while almost any product or service can benefit from subscription models, let’s bring the subscription model to the world of content with an even better example: Netflix.

Netflix is one of the most popular subscription services today. Let’s take a look at how they use the subscription revenue model…

The streaming service offers 3 subscription tiers: Standard With Adverts, Standard, and Premium.

Each tier at various price points provides subscribers different access, features, and benefits. 

Users sign up and stick around solely for the volume and quality of content that they receive. 

And that’s a double-sided sword. Yes, they generate a huge amount of recurring revenue. But, even Netflix have found it hard to maintain their status as a profitable subscription business. 

That’s because with such transactional customer relationships and nothing to keep viewers connected to the service itself, customer loyalty is hard to come by.

After a period of time, some Netflix subscribers might feel that they’re no longer receiving that value, or when they can find better content elsewhere—so they don’t hesitate to click ‘Cancel’. This is called subscriber churn. 

The transactional relationship between the creator and subscriber using subscription models can make it seem like it’s a revolving door, where subscribers are leaving as quickly as they’re signing up. 

Not to mention that the pressure of having to constantly create new content and get new customer sign-ups often leads to burnout, especially if you’re a small team without a Netflix-sized budget.

So, if you like the idea of starting a successful subscription business but want less churn, better cash flow, and more predictable revenue, the membership model may be the better option for you.

The membership model is similar to a subscription model, but even better…

Customers pay a recurring fee for access to your exclusive content, as well as your exclusive community. That community is what builds customer loyalty, and keeps existing subscribers around for much longer. 

And, memberships share all of the same benefits as other subscription business models. 

The benefits of a subscription business model

Stable and predictable revenue stream

It’s possible to make money from the videos you post on social media platforms—provided you have enough subscribers to meet minimum ad share qualifications, and the algorithm doesn’t suppress your content.

But let’s quantify what this actually looks like with an example from TikTok megastar, Hank Green, and his analysis of TikTok’s Creator Fund. In a YouTube video, Green revealed that The Creator Fund paid him a whopping $0.02 to $0.03 for every 1,000 TikTok views. 

Let’s compare that with subscription models. In an influencer Marketing Factory survey, 58% of online content consumers said they’d pay up to $15 monthly to access their favorite creators’ content.

Let’s say you have 500 paying subscribers at $15/per month. That’s $7,500 every month from your video content—without relying on an algorithm.

Big Picture Skiing, a membership site for skiing enthusiasts, surpasses this target. Creator Tom Gellie built the site on the recurring revenue model to monetize his video content with plans available from $349.99 per year. 

He now earns over $30K per month with just 300 members. 

There’s a clear winner here. 

Better community building to boost sales and customer loyalty

If you plan to upsell subscribers to better membership plans, or cross-sell digital products like your online courses, get existing customers to share their candid testimonials and reviews within your membership.

Stats show that 82% of consumers will either research or purchase a product after seeing a member of their community (e.g., friends, family, influencers, etc.) post about it. 

Consider the #tiktokmademebuyit fad as anecdotal evidence.

If you look at this hashtag, you’ll notice an interesting trend. People find a new product and make a video about why they love it. Then, other TikTokers see the video, buy the product, and make their own video encouraging others to buy. 

The cycle repeats, and soon everyone buys products like Scrub Daddies, The Pink Stuff, and Snow Teeth Whitening.

As mentioned, the subscription business model isn’t only about promoting your video content. 

They’re about turning your subscription into a membership and building a community of like-minded individuals who love your content, talk about your videos and products with one another, create hype amongst themselves, and continue to show loyalty.

Audience feedback and insights

Creators who use the subscription business model to run a membership through an independent video marketing platform have exclusive access to feedback and analytics. 

In other words: they can interact directly with their community and capture feedback. These member insights help creators refine and improve content based on user needs and preferences.

Not only does capturing feedback and insights benefit you as a creator, but it also helps you build a stronger customer relationship with your members.

“Taking in special requests to keep subscribers engaged is a good retention strategy. It gives paying subscribers privileged access to interact with content creators.”

Ed Lateef, CEO of Revolution Labs

Personalized member experiences

People favor personalized customer experiences. They’re even willing to pay more for them. Forrester found that 77% of consumers have chosen, recommended, or paid more for personalization.

When your video content lives solely on social media, you can’t deliver personalized experiences to your hungry audience. 

You’re at the mercy of the algorithm as to whether or not your content shows up—even when followers are explicitly searching for your videos. 

Conversely, when you move to a paid membership model (instead of just using social media subscription services like Facebook Fan Subscriptions), you have complete control over the content and the experience you provide. 

Membership business owners who use Uscreen can personalize their member experience by:

• Interacting with members to get real-time feedback on what they want
• Offering tiered memberships to cater to different needs
• Reviewing analytics to see what content resonates with members
• Providing on-demand content across any platform (including desktop, mobile, and smart TVs)
• Setting up search and browsing functionality so members can find whatever content they prefer

The best part: When you provide personalized experiences, members reward you with loyalty. 

How to turn regular subscriptions into memberships

Memberships are essentially an upgrade to the subscription revenue model. They take everything that works from the subscription model and add an exclusive community to the mix.

This addition means that on top of exclusive content, members also gain access to an exclusive community of like-minded individuals.Here’s a quick visual look at the main similarities and differences between memberships and subscriptions:

With the membership business model, members pay a recurring fee for access to exclusive content, and an exclusive community. 

On top of that, members might also enjoy other special benefits like:

• Member-only live streams
• Exclusive invites to in-person events
• Discounts on products and merchandise

Drumeo is an example of a membership community. You pay either an annual or monthly fee for drum lessons, but you also get exclusive access to workshops and events as part of your subscription.

Memberships are the perfect type of business for creators since they generate monthly recurring revenue—and they’re built for member retention which is a must for subscription based businesses.

Thanks to the sense of belonging and connection that membership communities provide, members are much more likely to stick around in the long-term. Our metrics show that compared to subscription offerings without communities, memberships with communities enjoy a 2x lower churn rate. 

Here’s how to build upon the subscription business model with a membership site. 

Click here to watch the video -> youtube.com/watch?v=UL6Ats5eNHQ

1. Learn what your audience wants

Remember when an Instagram influencer with over 2 million followers couldn’t sell 36 T-shirts? 

This is a classic reminder that having a large number of followers doesn’t automatically mean you can make money from them. You have to know what your target customers want.

• “An audience research strategy means you’re keeping a pulse on what your audience cares about and what they’re already talking about. Then it’s up to you to create the content that resonates with them.” —Amanda Natividad, VP of Marketing at SparkToro

Start the process by using audience research tools, surveying your audience, and analyzing the data you already have.

If you already have an Instagram following of 10K, for example, use the poll feature on an Instagram Story to find out why people follow you. This likely boils down to your personality, shared goals, or mutual interests. 

You could even spy on your competitors for this part. Look at the comments on their YouTube videos—what do people talk about most? Make a note of things they love and hate. There’s probably a big overlap between your and their audience.

2. Develop pricing tiers 

The number one motivation for subscription sign-ups is getting a good value for the price, according to McKinsey. 

If you want to seal the deal, people need to feel they’re getting a bargain on your content—especially if you have a large pool of competitors. 

But how do you know if your subscription pricing strategy is competitive and that people will buy?

Studies have shown that 36.9% of B2B memberships and 47.4% of B2C membership sites cost between $25-49 per month. Conduct competitive pricing research on sites similar to yours. Find out what they are offering and charging, then adjust your pricing strategy accordingly.

As you settle on a fair price, employ pricing psychology tips to encourage sales:

• Offer a free trial. This entices people to join your community without any risk. Once they’ve seen your content, they’ll be hooked and ready to pay for continued membership. Our data shows that 65% of people who take a free trial convert into paying customers.
• Set a discounted annual membership price. Uscreen user Elite Guitarist uses this technique. Members can either pay a $29/month fee or a discounted $289/year fee.

It’s also worth considering whether or not your community would benefit from tiered pricing like the well-known subscription companies, Netflix, Spotify, or Dollar Shave Club models. 

For example, if you run a fitness community, you may have some users who only want to take your yoga classes, some interested in only yoga and pilates, and others interested in all classes. You could adapt your pricing strategy and create 3 membership prices with different levels of access to meet everyone’s needs.

3. Choose an independent video membership platform

One of the most important factors in building a successful membership is choosing a platform that helps you accomplish all of your goals, provides multiple options to build your community, and makes it easy to generate recurring revenue.

Here’s what to look for when choosing the right subscription or membership platform:

• Diversified video provider. Look for a platform that offers on-demand videos, intuitive discovery, and live-streaming services.
• Membership apps. Consumers don’t only use a web browser to watch video content. They also use mobile devices and smart TVs. Pick a provider that lets you create OTT apps to reach your members wherever they watch content.
• Monetization options. Don’t settle for a membership site that takes a hefty share of your profits or tells you how to monetize. Find one that keeps you in the driver’s seat.
• Tracking tools. Find a platform that tracks metrics and analytics like subscriber growth and churn rate. A platform that generates customer reports via CRM data, like HubSpot’s Subscription Management tool is ideal here. That way, you can spot exactly where the bulk of your customers churn and access the tools needed to fill in the gaps.

The most important thing of all? Community. After all, it’s the peer-to-peer discussions that transform your subscription business into a thriving and profitable membership.

Look for a platform that provides a safe space for member-generated content, peer connection, and creator interactions.

Uscreen, for example, gives creators a dedicated community space and features to work alongside their exclusive content. This allows you to: 

• Encourage member engagement with user-generated video 
• Attach video from catalog in community posts and comments
• Set community challenges that gamify the member experience

Brooke Cates is just one creator that uses these features to build a membership site. 

Studio Bloom, a fitness membership site for new moms, supports its community by inviting guest speakers, coaches, and other members to chat in the community forum. This sits along premium content such as workout videos and guided programs. 

It’s an approach that has helped Studio Bloom become an uber successful creator business. They bring in $87K in monthly revenue—and they’re still growing.

4. Develop a marketing strategy that captures new members

There are many ways to build out your creator marketing funnel. But they all have these 3 stages:

1. Audience: This is the net that gets people into your sphere of influence. It’s only based on content, such as a YouTube channel or Instagram profile, where you talk to everyone—but people don’t chat amongst themselves. Your goal is to get them to do so.
2. Community: People interested in talking to other members fall into the community stage. This might happen in Facebook Groups or Slack communities. At this stage of the funnel, your income here is still hit and miss. You largely rely on one-off product sales to monetize. 
3. Membership: A membership combines both of these elements in a single platform. You’ll make money by exchanging premium content and community for a recurring subscription. 

Let’s take YouTube as an example of how you can push people through the funnel. 

People on YouTube are already pre-qualified for video content, hence why it’s one of the most popular channels for creators to build their audience. 

Here’s the YouTube marketing funnel that has worked for many Uscreen users:

1. Create videos around your subscription program’s niche on YouTube.
2. Create a freebie, mention it in your videos, and add links to the freebie landing page in your video descriptions.
3. When people click through to the landing page, they exchange their emails for access to your freebie.
4. Auto-send an email campaign that promotes a discounted offer to your paid program.

Sarah Beth Yoga uses this strategy to convert great-fit users to her membership. This YouTube video, for example, ranks no. 3 for “yoga for grief” on YouTube as well as Google search.

In the YouTube video description, Sarah includes a link to a free gift—a 25-minute video of one of the stretches in the YouTube video the lead is watching.

If you click the link, you’re sent to a landing page asking for your email in exchange for the video. 

Once you enter your email, you’re placed in Sarah’s automation marketing funnel where she can market to you and add you to her customer base.

Apply the same principles to any other marketing channel. Create free content around your subscription program’s niche and use those to promote a freebie. Once users share an email address, you can use that for email marketing.

5. Optimize your membership community for customer retention

It’s practically business scripture that the best way to make money is to retain customers you already have. That’s especially true for subscription business models.

Members who stick around and renew their membership on a recurring basis contribute more to your bottom line, have a longer customer lifetime value (LTV), and act as brand advocates bringing in friend and family referrals.

Our data proves it: Active community engagement results in 2 times less churn compared to non-engaged members.

But this begs the question, how do you optimize for retention? Consider the following:

• Know your audience. Keep a pulse on audience preferences so you create content that keeps them engaged and returning for more.
• Update and plan content. The membership model is a type of contract. Your members promise to pay a monthly fee, and you promise to deliver new, updated content every month. As long as you plan for new content, your members will stay subscribed.
• Build a community. Add value by investing in your community. Members will continue to drop in for member insights, to share their member-generated content, and to participate in ongoing conversations (think Peloton).
• Give bonuses and reward loyalty. Subscribe and engage members with bonuses, loyalty points, and personal challenges.

It means a lot to your paying members when you take the time to understand their needs and deliver the best experience. With Uscreen, you can tap into your community members and get direct feedback from members. 

Boost income and retention with an independent membership site

Subscription businesses have cracked the code to building a predictable revenue stream.

If you’re a video content creator looking to move to a membership or subscription model, there’s good news. You’ve already done the hard work. You’ve fine-tuned your video-making craft and built an audience.

Now, all you need to do is direct that audience to a platform you own, have full control of, and can leverage the recurring revenue model.

The membership model is profitable, sustainable, and worth the investment for most creators. In other words: it’s the best, most profitable, and most enjoyable way to monetize your video content.

With Uscreen, creators can build a stronger brand, create a more loyal community, and maintain a sustainable business model. 

We’ve helped creators earn $150+ million each year, reaching over 9.7 million end-users—and we’re still growing.

Click here to watch the video -> youtube.com/watch?v=gKLpsbm5Ks0

Subscription business model FAQs