IoT Subscription Business Monetization: The Possibilities are Endless
Gartner Report forecasts that there will be 25 billion connected things this year. At the same time, another study says that global spending on IoT will hit $1.29 trillion. A Markets and Markets study predicts the global IoT monetization market to reach $ 443.27 Billion by 2022, at a CAGR of 52.95%. All this translates to a significant subscription monetizing opportunity just for the asking.
IoT subscription monetization generates incremental and recurring subscription-based solution revenues from products and a bundled solution through IoT-enabled products. To take advantage of IoT subscription monetization is to earn recurring and consistent revenues.
Where are the IoT devices being used?
- 40.2% in Business and Manufacturing
- 30.3% in Healthcare
- 8.3% in Retail for Inventory Tracking
- 7.7% in Security for Biometric and Facial Recognition
Two major IoT Subscription Monetization Models
Consider the smart air conditioner connected to an online app. By using this app, you can control the temperature, switch on or off from anywhere. If enabled, you can use voice commands as well.
So if you can add a few IoT features to the ‘hardware’ product, you can monetize it.
Making money from the new gold – Data
Just as the prospectors of yore dug deep for gold, the mountains of data must be tunneled through to gain precious insights to take profitable business decisions in today’s world. Given that there are billions of connected devices, the data that is generated is humongous. Add the AIML programs to the mix, which can make sense of it all, and unearth business nuggets that are worth their weight in gold when monetized.
IoT in Action
This plays out in several ways. Tires fitted with chips transmit enough data to directly suggest what new features can be added to the product. This is very valuable to the manufacturer, and an insurance company can use the same data to make its offerings attractive. Energy monitoring devices in buildings note the consumption patterns during the day and across seasons, and the findings will significantly benefit building managers and other utility operators.
IoT and Subscriptions
There are several instances where IoT, when dove-tailed with a subscription business model, yields good results. Here are a few IoT Subscriptions models that range from the very basic health tips to high flying jets:
What can be a perfect fit than a tailor-made dress? MTailors has taken this further by using consumer’s smartphones to take measurements for suits, shirts, and pants that are 20% per cent more accurate than those taken by hand. Plenty of positive reviews later, they are getting traction for their dress subscription service.
Total Care Program of Rolls Royce rents jet engines, charging a fee on a per flying hour basis. This means airlines save on fuel costs, and the engines run on top condition while reducing environmental impact. RR is positioning itself for recurring rentals and subscription billing.
IoT has the potential to transform any industry with the power of IoT-based Subscription Monetization models. But there are a few challenges it has to overcome.
- It should be seen not just as a tactical tool to drive efficiencies but as a strategic tool
- Efforts in silos in monetizing IoT are not as effective as a combined effort with a focused approach
- Potential privacy concerns must be addressed with transparency and high technology
- Also, from the consumer’s point of view, after a certain number of devices, monthly payments to some more can be unviable.
Given the number of possibilities of subscriptions in the IoT domain remaining endless, it seems possible that with consolidation, aggregation, and value enhancements, the future is bright for IoT subscription businesses.