Subscription Businesses Are Booming. Here’s How to Value Them
The subscription business model is booming. Previously dominated by the likes of newspapers, magazines, gyms, utilities, and telecommunications firms, more products and services are being offered to more people through subscriptions than ever before. Business-to-consumer subscription businesses have attracted more than 11 million U.S. subscribers in 2017, and the industry as a whole has been growing at 200% annually since 2011. There are over two thousand consumer-focused subscription businesses capitalizing upon customers’ diverse tastes. While many companies are selling more traditional products – such as food (Blue Apron and HelloFresh), grooming products (Dollar Shave Club and Harry’s), beauty supplies (Birchbox and Ipsy), and clothes (Stitch Fix and Trunk Club) – there are hundreds of companies with more unorthodox products catering to the “long tail” of consumer tastes, including Harry Potter toys, survivalist products, and moss.