For the world’s most valuable companies, subscription isn’t just a business model. It’s a strategy!

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By Morten Suhr Hansen

For the world’s five largest companies by market value, Apple, Nvidia, Microsoft, Google, and Amazon, they all have one thing in common! You may have already guessed it, given the author’s background and passion.

And yes, you’re absolutely right: All five use the subscription-based business model as a significant part of their overall strategy and operations.

Let’s take a closer look at these five companies and how they view subscriptions as a central element of their strategy.

Apple surpasses 1 billion paying subscribers

På dagen, hvor denne artikel skrives, er Apple nummer ét på listen over verdens mest værdifulde selskaber. Det kan have ændret sig, når du læser den, for Apple og Nvidia har de seneste måneder kæmpet om denne plads. Helt tilbage i 2023 offentliggjorde Apple, at de havde rundet 1 milliard betalende abonnenter. Det dækker over egne abonnementer som Apple Music, Apple TV+ og iCloud (som også alle kan købes i abonnementsbundlen Apple One), men det dækker også over andre apps og tjenester, der kører abonnement igennem App Store.

As of the day this article is written, Apple holds the number-one spot among the world’s most valuable companies. This could have changed by the time you read it, as Apple and Nvidia have been competing for this position in recent months. Back in 2023, Apple announced that it had surpassed 1 billion paying subscribers. This includes its own subscriptions like Apple Music, Apple TV+, and iCloud (all of which can be bundled in Apple One), but it also covers other apps and services that operate on a subscription model through the App Store.

Nvidia earns nearly a third of its revenue from subscribers

Rising star Nvidia may be the least known name among the five biggest companies, unless you’re one of the many Danes following the stock market. But Nvidia, with its focus on developing graphics processors (GPUs), has managed to capitalize on the rapid development in AI and the computational power required by this sector. Nearly a third of Nvidia’s annual revenue of around $60 billion is estimated to come from subscription income on software and data centers.

Microsoft is one og the world’s leading SaaS companies

Microsoft, on the other hand, needs no introduction. As the company behind the Microsoft Office suite, it now reports over 345 million paying subscribers to its online service, Microsoft 365. But subscriptions are also prominent in several other Microsoft products, such as Xbox Game Pass, which continues to grow steadily year by year.


Google One and YouTube Premium each surpass 100 million subscribers

Google, known in the stock market under the name Alphabet, is perhaps best known for having one of the world’s largest advertising businesses in Google Ads. Therefore, Google remains free to use for most people, at least for individuals. However, with the product Google One, the company has launched a subscription offering additional data storage, new AI solutions, and much more. Google One now has more than 100 million subscribers. Additionally, Google’s other service, YouTube, has surpassed another 100 million paying subscribers with YouTube Premium.

Amazon’s Prime has become a highly profitable subscription business

The cherry on top is Amazon, which launched Amazon Prime back in 2005 as a subscription for free delivery. Since then, the number of features under the Prime umbrella has only grown. In Denmark, most people know Prime as a streaming service. But globally, Amazon Prime now has over 200 million paying subscribers, and in 2024, it is expected to generate over $44 billion (around 320 billion DKK) in subscription revenue. In addition, there is the derived product sales for the many who still use Prime for delivery services.

Why is subscription such an important part of their strategy

The figures presented above are staggering – there’s no doubt about that! But they also paint a clear picture that the global subscription economy is enormous (and growing), and by no means a niche segment, if there are still some who think so! But why is subscription so important for the most successful companies?

Subscriptions create stability. They ensure a steady and predictable revenue stream, which is attractive to investors and reduces reliance on one-time sales. At the same time, the model enables a closer relationship with customers, providing valuable data and the ability to continuously adapt products and services.

But subscriptions don’t just generate revenue; they create strong customer loyalty and differentiate companies in a competitive market. They are a key to sustainable growth and innovation.

For the world’s largest companies, subscription isn’t just a business model—it’s a strategy for the future.

Finally, let’s end with Steve Jobs’ now-famous and infamous quote: “I think you could make available the Second Coming (Jesus’ return) in a subscription model and it might not be successful.” I won’t take anything away from Steve Jobs or the amazing company and products he stands behind. But when it comes to subscriptions, even geniuses apparently can be wrong.

What do you think is the reason behind the wild ride of the subscription economy?

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