Study: Without recurring revenue models, companies will be left behind

A new study by subscription billing provider Aria Systems found that almost half of U.S. businesses currently have, are developing or are interested in deploying recurring revenue offerings.

The study revealed that of those companies, 61 percent already have recurring revenue models in place, while another 20 percent are in the process of implementing or formulating similar strategies. Nineteen percent of respondents said they are evaluating how beneficial recurring revenue models are.

“For companies who are either at or near the implementation stage, they need to spend time exploring how best to define their offering in addition to focusing on key elements such as application integration, content management and billing and collections,” Aria Systems president and CEO Tom Dibble said.

Many companies are moving toward offering online, subscription-based products and services to generate recurring revenue.

A recent article in Inc. Magazine highlighted British Columbia-based Snowboard Addiction as an example of this type of innovation. The company, which develops freestyle snowboarding tutorials, now offers annual video subscriptions. This enables snowboarders to download the latest tips and tricks, while enabling the company to generate a more predictable revenue stream.

Organizations that fail to innovate their revenue models in this way will likely be outperformed by competitive firms and risk becoming irrelevant.