Understanding the Subscription Business Model
One key term is ARPU: in my own words, it’s the average revenue generated per customer over a given period, which you can also think of as each user contributing a certain amount of revenue every X days.
Another key metric is NPS, which, to me, is closest to a referral index—basically, how many users share and bring in others.
With those two key points in mind, the subscription model is basically easy to understand: at its core, it’s about managing subscription cycles and tracking referrals.
Thinking back to what I said about the future of newsletters, there are really only three paths:
One path is turning it into an information advisory service, reviving the traditional magazine and newspaper subscription model. (Publications like Shihui, Reference News, and English Weekly all operate on paid subscriptions, focusing on content quality rather than chasing fan sentiment.)
The other path is like WeChat public accounts running commercial ads: content stays free, but influence and the attention of subscribers are sold to advertisers.
Those are really the two core models; everything else is just a variation, boiling down to whether you’re selling someone else’s product or service versus your own.