According to Pyramid research, PCCW�s NOW TV saw ARPUs increase 84 percent from US$7.34 in 4Q2003 to US$13.50 in 4Q2004. Additionally, PCCW has experienced strong uptake of its NOW TV service, reporting about 361,000 subscribers by YE2004, representing 24 percent of Hong Kong�s overall broadband lines. This is quite impressive considering the cable operator, i-Cable, was able to attract less than half of NOW TV�s total subscriber level over its first year of commercial deployment and in more than 10 years of operation it has gained only 700,000 subscribers in a 2.1m-household market. Key factors contributing to the rapid subscriber and revenue growth include NOW TV�s exclusivity arrangements and a flexible pricing scheme. Since its inception, NOW TV has rapidly evolved from offering only 23 channels to incorporating premium content and growing to 74 television and radio channels. Additionally, PCCW has been able to strike a number of key exclusivity contracts for premium content with ATV, HBO, Cinemax, Star Movies, MGM and ESPN-Star Sports which has helped the operator increase demand and revenues. Moreover, PCCW has localized its offerings to make them more appealing, with over 70 percent of the content provided in Chinese or with Chinese subtitles. PCCW charges for pay TV services on an a-la-carte basis. Customers can choose the channels they would like to subscribe to and pay-per-channel. The operator has also introduced mini-packs, which include a number of premium channels for a fixed amount per month priced strategically lower than i-Cable�s packages. Mini-packs account for approximately 58 percent of the channel subscriptions and were a key contributor to the ARPU growth. On-demand programs are charged on a pay-per-view basis.
The subscription business model has been one of the big success stories of the Internet era. From Netflix to Microsoft 365, more and more companies are moving towards recurring revenue streams by having customers pay for access rather than product ownership. The subscription economy cuts across many industries -- such as streaming services, software, media, consumer products, and even transportation with the rise of mobility-as-a-service. A new market study by Juniper Research highlights the central challenge facing subscription businesses -- reducing customer churn to build a loyal subscriber installed base. Subscription Model Market Development The Juniper market study provides an in-depth analysis of the subscription business model market landscape and associated customer retention strategies. A key finding is that impending government regulations will make it easier for customers to cancel subscriptions, likely leading to increased voluntary churn rates. The study report cites the