Trends in the development of digital subscription services in international markets

Abstract

Companies are trying to harness the potential of the current stage of development of the digital industry and make it cost-effective, which requires not only technological innovation but also the transformation of many existing business models. Based on an analysis of examples of digital subscription companies, this article provides additional explanations, including definitions and constituent characteristics of digital subscription business models. The aim of the article was to identify trends in the development of digital subscription services by analysing the number of active subscribers and the impact of COVID-19 on this indicator. Autoregression and analysis methods were used in the study, and the implementation of the selected models was carried out using the Python-3 programming language. The article describes a theoretical basis that determine the feasibility of using the subscription model for the company under non-deterministic critical conditions. The main approaches to forecasting the company’s performance indicators are identified. The type of data to be forecasted is determined, and the necessity of using autoregressive models for further analysis is declared. Factors associated with the COVID-2019 incidence that should be considered as exogenous variables were identified. The multicriteria selection problem was constructed by restricting the family of autoregressive models and determining the criteria for forecasting and data preparation time, forecast accuracy, and the possibility of considering external factors in determining the algorithm efficiency. It is found that moving average autoregression is the most effective. Given the further application of this algorithm to predict the number of subscribers, the expediency of implementing a subscription strategy for the company under non-deterministic critical conditions is declared. It is possible to effectively apply the selected mathematical model to predict the performance of a subscription company. The practical significance of the work lies in the possibility of creating certain benchmarks for the development of the market and a business strategy for product promotion, which will be based on an understanding of the potential benefits and threats of the market for digital subscription products and services

Keywords

• business model optimisation
• autoregressive model
• software as a service
• monthly recurring revenue
• number of users