Cloud Billing Expert Aria Systems Cites Adobe and YouTube Announcements as Watershed Moment in Emerging Subscription Economy

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In rapid succession, two major industry leaders revealed plans to substantially shift their core business toward recurring revenue models. Major implications follow for both companies, their customers, their competitors and the subscription economy as a whole.

Having two major industry leaders redesign their business models to focus on recurring revenue is much more than a coincidence—it’s a sign of the times.

Aria Systems, delivering the full power of subscription commerce to transform business, today recognized the tremendous significance of recent announcements by Adobe Systems and YouTube. Earlier this month at the Adobe MAX conference, Adobe unveiled plans to deliver upcoming releases and all future software exclusively through its subscription-based Creative Cloud product line. In a similarly daring move, YouTube began offering a paid subscription service to compete with and complement its current ad-supported model.

“This is a defining moment in the development of the subscription economy,” said Andy Eliopoulos, Sr. Director of Product Marketing, Aria Systems. “Taken alone, either of these events would be highly relevant within the context of evolving commerce. Having two major industry leaders redesign their business models to focus on recurring revenue is much more than a coincidence—it’s a sign of the times.”

YouTube, with some billion viewers in its audience, is the world’s largest video site. Until now, their business plan has focused on selling access to that audience through advertising. By launching paid monthly subscriptions for premium content, YouTube is making a significant departure from that existing business plan. The company will now be working with two distinct revenue streams defined by very different characteristics. Seamless integration of billing systems with an intuitive user interface will be critical for the success of YouTube’s new offerings.

Changes at Adobe Systems are even more dramatic. Historically, Adobe has focused on a traditional software development cycle with new versions of software available for new sales or upgrade. Revenue from that business can be highly unpredictable, with results depending on the popularity of new titles and upgrades. In a major strategic move, Adobe now moves forward with a business model based on recurring revenue. Under the umbrella of their Creative Cloud product line, users of industry-standard tools such as PhotoShop and InDesign will now pay a monthly fee for access to the most current software. With this fundamental shift, Adobe’s future success is inseparably connected to retaining customers and maximizing customer lifetime value.

Results from a recent study by Incyte Group revealed imminent plans by a plurality of U.S. businesses to offer new services with a recurring revenue model,” said Jon Gettinger, SVP of Marketing, Aria Systems. “Those projects are beginning to reach the market now. The advantages of providing goods and services on a recurring basis for both businesses and consumers are simply too numerous to ignore. The challenges to both of these companies and others entering the subscriber commerce space will be implementation, integration and keeping customers happy over time.” Findings and analysis of the study can be found in this e-Paper, The Anatomy of a Recurring Revenue Business.

Every business has unique needs for integrating a subscription billing solution with existing IT infrastructure and interfacing with sales, customer service, and accounting systems. Learn more about what to consider if you are joining Adobe and YouTube in the fast-growing subscription economy by reading this e-Paper, Six Key Considerations When Buying a Subscription Commerce Solution.

About Aria Systems

Aria Systems delivers the full power of subscription commerce to transform business by creating new opportunities, improving customer relationships and providing more revenue predictability. The Aria Subscription Billing and Management Platform was chosen by brand name companies such as Pitney Bowes, AAA NCNU, Experian, Red Hat, Ingersoll Rand, EMC, VMware, and HootSuite to evolve their company’s subscription businesses while delivering outstanding customer experiences.

About Adobe Systems

Adobe is the global leader in digital marketing and digital media solutions. Our tools and services allow our customers to create groundbreaking digital content, deploy it across media and devices, measure and optimize it over time, and achieve greater business success. We help our customers make, manage, measure, and monetize their content across every channel and screen.

About YouTube

Founded in February 2005, YouTube allows billions of people to discover, watch and share originally created videos. YouTube provides a forum for people to connect, inform, and inspire others across the globe and acts as a distribution platform for original content creators and advertisers large and small.

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Marie Martin
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