Consumer Subscription Software Report 2021
The view from GP Bullhound
About us
4 articles
Market update
7 articles
GP Bullhound key CSS insights
6 articles
Expert views from company builders
5 articles
Current CSS ecosystem
5 articles
CSS metrics to watch
4 articles
Past CSS insights
5 articles
Learn more about GP Bullhound
Consumer Subscription Software Report 2021


Read below for GP Bullhound’s annual research report on the Consumer Subscription Software (“CSS”) ecosystem.

In this year’s report we explore how the transition to subscription services will carry on as entrepreneurs continue to roll out valuable offerings to help consumers improve their everyday lives.

Fast-forward three years, most people will have 5-10 different CSS business subscriptions. Entrepreneurs are continuing to build better products, and consumers are seeing value in these services because they truly make life better. For many of us, the idea of paying $30 per year to improve one’s life is very appealing."
We believe that the CSS business model enables companies to rapidly scale with attractive margins while also providing a compelling consumer value proposition. We are excited to help guide CSS companies through the next chapter of their evolution.”
A leading technology advisory and investment firm, providing transaction advisory and capital
Our CSS Index shows private consumer companies are set to drive lively IPO market
From our CSS flywheel to Western / Eastern models, here’s what you need to know
Expert views from company builders
What CSS leaders and investors have to say 
Niche end-verticals highlight a broad landscape
css metrics to watch 
What investors focus on and key nuances 
Past CSS insights
The view from GP Bullhound
current css ecosystem 
Getting the fundamentals right 
market update 
Alec dafferner, partner
Eric crowley, executive director
About GP Bullhound’s CSS team
GP Bullhound’s CSS team
GP Bullhound’s CSS team leverages decades of collective experience, proprietary intelligence, deep industry relationships, and leading data sources to identify and communicate what you need to know to stay ahead of the curve

Our CSS practice is led by our San Francisco-based Executive Director, Eric Crowley, who has 10+ years of investment banking and private equity experience

Click on the authors below to learn more about our team
research team
Alec dafferner
eric crowley
okan inaltay
vice president
executive director
daniel kim, cfa
gerry kelliher
garret vaz
vice president
Daniel roberts
adam segall
maria lazareva
research analyst
jennifer eller
vice president, hEAD OF research
Deep domain expertise in the consumer subscription sector
First investment bank with a CSS focus
Consistently serving as a contributor and guide to the CSS ecosystem and entrepreneurs
Our recent CSS reports
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Our celebrated news articles
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GP Bullhound’s recent CSS activity
GP Bullhound continues to lead in the CSS sector from both an advisory and an investment perspective
How do you stack up? 
We want to hear from you - take our CSS survey
Our passion is CSS, and core to GP Bullhound’s mission, we want to help the world understand the ecosystem’s nuances and operators
Where & when?
CSS company owners and investors  as a part of our market research on the CSS ecosystem, we want to learn more about your business for benchmarking purposes 
Our online survey will take just a few moments of your time – less than 10 questions

All data will be aggregated and kept anonymous
We ask all participants to complete our online survey by 31 October 2021

Once we crunch the numbers, we’ll send you the results! 
Market update
Established consumer brands launch subscription offerings
​Sources: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights 
Multiple brands have launched subscriptions for their apps and websites to generate recurring revenue and a stickier client base
iOS 14 and impact on industry growth
Short-term pain = long-term gain
With the release of iOS 14 in September 2020, consumers are asked if apps can collect their data for tracking purposes, including the Apple IDFA

Consumers also have a dashboard to quickly review all App Store subscriptions

This change is widely expected to reduce consumer targeting efficiency and conversion rates, driving up customer acquisitions costs 
  • Early surveys indicate 90-95% of consumers opt out of being tracked, confirming industry fears and hurting ad efficiency across platforms like Facebook

  • With Facebook ad personalisation and performance hindered, CSS advertisers will look for other avenues for advertising
  • Reduced marketing efficiency to force CSS businesses to focus on acquiring customers organically through clever engineering and unique value propositions

  • Combined with the Apple Tax, iOS 14 to push businesses to drive consumers to sign up through web interfaces, improving margins

  • App developers are given an additional tool to acquire, retain, and win back subscribers by using an offer code for subscriptions

  • The code can be distributed through any digital or offline method, allowing a customer to access an app for free or for a discounted subscription for a specific duration
Short-term: CSS ecosystem growth hampered by adoption of iOS 14
Long-term: This will benefit the CSS industry by forcing companies to build better products that attract customers organically
​Sources: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights 
‘Covid bump’ or paradigm shift in consumer preference?
As developed nations begin to emerge from the pandemic, many investors are asking if Covid-driven growth rates can be maintained

Last year’s subscribers have started renewing and investors are watching for early signals in renewal rates 
Based on GP Bullhound’s surveys, the transition to subscription services will carry on as entrepreneurs continue to roll out valuable offerings to help consumers improve their everyday lives
Many CSS businesses had a fantastic 2020 as consumers converted in-person activities to digital experiences, including working out at home, exploring the outdoors, or trying a new hobby 
​Sources: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights 
Our CSS Index shows growing public investor excitement
  • 2020: c.43 consumer IPOs

  • Airbnb and DoorDash defied the coronavirus economy, saw attractive public valuations

  • Private consumer companies followed, making for a lively 2021 IPO market
  • Select private CSS companies backed by private equity heavyweights and primed for 2021-2022 IPOs
GP BulLhound's CSS Index
​Sources: Sensor Tower, DataGrail, Edelman Trust Barometer, and GP Bullhound insights
  • Our CSS index, the first to track how public CSS investments are valued, includes names such as:
Robust M&A deal activity
​Sources: Capital IQ and Pitchbook as of 21 July 2021
Private financing surging 
​Sources: Capital IQ and Pitchbook as of 21 July 2021
GP Bullhound
 key CSS insights 
CSS flywheel attributes to drive premium valuation
We advise buyers on CSS opportunities using our flywheel
A key valuation driver for investors is the concept of winner-takes-all in CSS apps; if the company has the potential to dominate a niche or a broader market through network effects, investors will pay up
It is important for entrepreneurs to understand their competitive positioning and be able to define their market niche
Truth about LTV
Debunking the issues of customer lifetime value
The LTV formula has several issues that need to be understood: 
  • The formula assumes that all users eventually churn at an even percentage each year or average

  • It does not take into consideration factors such as upsells and re-subscriptions 

LTV does not account for fundamentally different user profiles – discounts the ‘locals’ that stay for LIFE and over-emphasises the high ‘tourists’ churn
To estimate LTV in early-stage companies:

Find the locals
  • LTV engagement – comments, photos, shares, posting activity, connecting data sources, and logins 

  • Track auto-subscribe from Apple/Google

  • Web-users versus app only

  • Tools to measure engagement – e.g. RevenueCat, AppsFlyer, and Recurly
Measurement solutions
​Note: ARPU = average revenue per user; GM = gross margin
  • Divide users into ‘locals’ vs ‘tourists’ cohorts by looking at engagement metrics

  • Estimate the value of ‘lifetime users’ in the local cohort and then calculate each cohorts’ LTV

  • Focus on the acquisition of ‘locals’ and optimise marketing not for just sign-ups and return on advertising spend (ROAS), but for long-term usage

  • Discuss your average LTV, as it's important for your customer acquisition cost (CAC) payback, but ensure you highlight the potential of your ‘locals’
Definition of LTV
(Lifetime value)
LTV captures a user’s gross profit that is ‘scheduled’ to be delivered to the company over the lifetime of the user 
LTV issues
The new era of customer acquisition is organic
  • Organic customer acquisition strategies are critical for CSS companies

  • Generating a sustainable, low customer acquisition cost (CAC) delivery model is crucial to ensuring a sustainable, profitable subscription business

  • Successful, new-age CSS enterprises leverage low-cost or free channels to find and attract customers
  • Each CSS business must choose a strategy to find new customers and integrate that into its services as a feature or integral part of the offering

  • The customer acquisition method is then organic or less invasive to the consumer, resulting in higher conversion and retention
Internet browser extensions can be big businesses
A browser extension is a small software module for customising a web browser
Browsers typically allow a variety of extensions, including user interface modifications, ad-blocking, and cookie management
​Note: 1) Debugbear; and 2) Statista – Global desktop Internet browsers market share 2015-2021 
Hardware unlocks the modern-day subscription
Connected hardware has become a trojan horse for a recurring software subscription but consumers are smart – the software must enable a better service and constantly keep the experience refreshed – a true symbiotic relationship
Once users commit to the hardware purchase, the expected retention rate for the subscription is high
This trend began with connected fitness, but hardware-enabled software has expanded into many new verticals
Western CSS versus Eastern micropayments
  • Western users focus on discrete, specialised apps that address specific use cases

  • While Western users are often willing to subscribe to different apps, too many can add up, be hard to keep track of, and lead to fatigue

  • As a result, developers are opting for options that allow them to capture ad revenue from free users who choose to build their own stacks
  • Micropayments through tipping, donations and pay per episode has become widespread

  • Users prefer comprehensive ‘super apps’ for all their app-based needs, including messaging, personal finance, and entertainment

  • Users can quickly connect their profiles to a variety of services using existing Alipay or WeChat payment platforms
‘Pay per engagement’ platforms are rapidly expanding in the West, led by Patreon, Cameo, and OnlyFans
Use cases where users only want limited engagement can still be monetised to encourage them to subscribe
Customised and exclusive offerings involving customised messages, photos and limited merchandise are attracting more users to digital experiences
Rapid expansion of subscriptions given the benefits for both the user and businesses
​Note: 1) Tencent 20-F, 2021
Chinese media giant Tencent reported that nearly 3x more revenue came from CSS than online advertising in 20201
Expert views from venture builders

In its early days, PlayOn! Sports explored both models – selling to schools and selling to fans. Ultimately, we chose the subscription model for fans as selling to schools is extremely challenging; schools have limited budgets for discretionary expenses and those budgets are tied to tax revenues and overall economic health. Budgets can be very cyclical and lead to substantial churn among schools. Ultimately, the model we chose was to invest up-front and install automated production cameras at schools for free. This upfront investment won over the schools and significantly reduced sales friction. We also found that parents love the convenience and easy-to-manage subscription offerings to watch their kids play sports. This has resulted in attractive unit economics for PlayOn! Sports leveraging a CSS model.


High school sports occur in every city in the United States, with over 3 million events a year. Each event has a limited, albeit passionate audience, that makes it difficult to justify an expensive TV production. There are some marquee high school events, like football and basketball games, that are carried on local TV channels, but the rest of the high school sports ecosystem doesn’t have the audience base to justify television production and distribution. Instead, PlayOn! Sports has leveraged technology advances, such as automated production camera technology and Internet streaming to be able to produce ANY AND EVERY high school event for an extremely low marginal cost. By standardising our model, we have a national distribution footprint consisting of local coverage. Each event drives incremental subscriber acquisition and significant retention as high school sports is worshipped in most US states. With our increased scale, we covered over 300, 000 events this school year and expect to cover over 1 million in 2021/22 school year.


PlayOn! Sports works with the state athletic associations and the individual high schools as partners, where we all provide services to the other. PlayOn! installs automated production cameras, which allows the schools to promote their athletic events and enables high school fans to watch their teams – regardless of where they live. In exchange, PlayOn! Sports benefits from proprietary local content that has a passionate and sticky audience base. PlayOn! sells consumer subscriptions, and the schools and associations benefit through a revenue share. Our partners utilise their marketing channels to generate organic referrals, which dramatically lowers our CAC. As we enter new markets or launch a new school, we utilise paid marketing through the traditional digital marketing channels to let parents know of PlayOn! Sports’s service and to build a base level of users. We keep our CAC low by marketing individual events to a very targeted audience, but we do this at massive scale.


At PlayOn! Sports, we have two groups of customers – 'content partners', the schools and athletic associations and the 'end viewers' – fans/parents/students/alumni. We are extremely focused on ensuring that the schools and athletic associations feel valued and have a great experience with the partnership. So far this has been very successful as we have had non-existent churn in schools over the last 4-5 years. On the customer front, we built our model to include churn as sports seasons end, students graduate, etc. However, our model features a low cost-of-content and our CAC remains affordable and predictable given the organic nature of our customer acquisition strategy. This enables us to operate with profitable LTVs and unit-economics even with predictable end-viewer churn.
Land and expand with hardware
David rudolph
We deliver live US high-school sports events to fans whenever and wherever they want it
Cover every US high school game across every sport and then apply our model to other niche sports or underserved content verticals
300,000 games streamed in 2020/21 and more than 1 million in 2021/22

More than 700,000 active subscribers

Toucan is a web browser extension that helps people learn a new language while going about their day. Each time you visit a website, Toucan picks certain words to translate into your new language so you can learn them within the context of a language you’re already comfortable with. We chose a CSS model so we could offer a compelling free product while creating a compounding and predictable business model that grows and sustains the company. With a premium subscription tier, we can offer high quality features that our customers expect and demand and still provide a high-quality free experience for anyone interested in learning a new language.


The short answer is that we wanted to meet people where they were… The three co-founders of Toucan have worked at some of the best consumer tech and mobile app companies in the world, including Headspace. And a huge, consistent problem with consumer educational products is that it’s hard to get people to take time out of their busy day, even for just a few minutes. Plus, competition for time on people’s phones is only going to get more intense. So, rather than be one more thing on someone’s to-do list, we decided to build Toucan on top of people’s existing Internet browsing behaviour so they could learn while they went through their normal day. Not to mention, there are approximately 200,000 Google extension offerings vs. millions of apps, so the competition is substantially lower.


Nope, not at all. Most browsers are looking for ways to differentiate themselves and become more valuable, useful tools for consumers. Toucan makes people’s time on these browsers even more valuable, while also respecting their privacy. In fact, we have such confidence in the browser extension ecosystem that we’ve recently launched on Safari, Firefox, Brave, and Edge.


We’re focused on making Toucan better and reaching even more people with it. That means launching on more browsers, adding new languages to learn, and polishing the core experience so that we can teach better and more effectively. We’re already rapidly winning over consumers and converting them to our paid product.
Delivering perpetual learning through software
taylor nieman
To make the world bilingual 
To create a healthy, empowering community that breaks down cultural barriers
150,000+ monthly active users (MAU)

We are helping women tap into their sexuality on their own terms. Lots of the female-focused solutions on the market today are clinical in nature. Most erotic entertainment is made by and for men, but women have the same demand for content. We saw a big gap in female-focused content. Our core demographic is women aged 18 to 34. Dipsea solves that big gap in content by providing our users grounded in aspirational reality and designed to inspire through imagination and fantasy.


A CSS business model is great for Dipsea for a few reasons. Our users have a regular demand for our content – we are closer to Netflix versus a dating app. We consistently refresh our content so that our users find something new every week – resulting in continuous entertainment deserving of a subscription. Finally – our users crave a premium experience and have become comfortable with a subscription offering. 


Not really. As long as the subscription is providing value and people are using the app consistently and it's making their life better, they won’t cancel.


Currently, a large part of our growth is organic. Investors weren’t sure if people would want to talk about erotic content when we started pitching Dipsea. There has been a big cultural shift in willingness to talk about personal issues and interests more. Younger people are just more comfortable sharing in this category. In addition, Dipsea by its nature is a press-worthy topic so we get solid engagement there. We are also leveraging paid channels and have had a lot of success with podcast advertising. Given the similar audio experience, we have found a lot of users through dating and female-focused podcasts.


Our Core mission is still the same – serving women in this space still has so much room to grow. While our core demographic is 24-35, our fastest-growing category is 18-24. But we will continue supporting women throughout major points in their lives. 
faye keegan
Empower women to tap into their sexuality on their own terms
Become a trusted partner for women as they move through their lives
The idea that what we make is niche is wildly incorrect
Venture capital mandates for css businesses

DCM believes that we are in the middle of a big shift in the consumer Internet. Historically, the primary method has been monetisation through ads or the sale of data and now we believe subscriptions will come to be very important. We see three characteristics where CSS businesses have the potential to be category winners – High gross margins, Recurring revenue, Potential for exponential growth with organic customer acquisition.


The first thing we do in any CSS investment is ask ourselves how these businesses are growing. Are they acquiring customers efficiently with primary organic customer acquisition methods? Do they have a unique organic strategy of finding consumers or generating word-of-mouth growth? Second, we focus on subscription retention, which is key for DCM. At the earliest stages, retention calculations are more guess work vs. a pure science. To arrive at a proxy, we look at what we believe are the early symbols of high retention businesses – WAU/MAU levels. One thing that is always hard is TAM or Market size. VCs are bad here, so we think about it last.

Examples of 'investmnet no' for DCM include:
  • Payback on CAC > 12 months and no sure way to get payback timelines to trend down
  • Limited organic need for product
  • The core audience is hard to find
  • Lots of competition already


Poor pricing strategy is a big area for improvement. A lot of CSS businesses underprice the value they bring to consumers. Founders need to ask – what am I replacing or improving in someone’s life? For example, Breathwork is a mindful breathing business that we are a fan of. How do you create a price for breathing – which someone can do for free now?


The prevailing wisdom is that Asia is leading with its superapps like WeChat and Alibaba, but users in China are not used to paying for apps in the consumer subscription model. They are instead interacting in a more transactional model by either tipping influencers or buying individual content. I think that is why you have seen some of the Western apps become so powerful globally as they can leverage their subscription revenue to grow faster and add more services. 
DCM partners with inspired entrepreneurs to build high-impact, global technology companies

Its global DNA and extensive industry expertise are foundational to maximising the success of the entrepreneurs
david cheng
Venture capital mandates for css businesses

TCG is staying very active in our core consumer verticals which includes CSS as well as ad driven and ecommerce business models. One thing we have noticed is that a lot of businesses that don’t have a natural need or fit for a subscription product are trying to shoehorn in a subscription model. For example, a great business that gets a lot of website traffic and engagement tries to integrate a subscription offering. That may ultimately be less successful vs. keeping the top of the funnel wide open and integrating ads or ecommerce options. Consequently, we are seeing the blurring of the edge of traditional CSS businesses. Another trend we have been seeing is that traditional enterprise SaaS terms have become very ubiquitous. Consequently, some of these terms have been adopted by consumer businesses where they don’t accurately capture the true business KPIs. In a lot of cases these consumer businesses are trying to use the same 'SaaS Lingua Franca' to speak to investors and it can cause confusion – i.e. – what does CSS ARR truly mean?


TCG has deep consumer DNA from our founding days. We look for businesses that were created out of authentic passion. Businesses where the founders built something that they and their friends wanted to have and felt the market need. We stay away from 'born in a boardroom business'. For example, within our portfolio, some of the best consumer tech businesses are accidental companies built out of pure passion. We invested in Surfline, which has been around for years. The founder built the business up over time with one north star – real surfers need to know the conditions of the waves. They started monetising with ads and gradually graduated to consumer subscription offerings.


Valuation is just one aspect of our evaluation process. We love durable and passionate businesses that have the opportunity for blended business models – commerce/content/ads/subscription/data access. Ideal investments for us have more than one revenue stream or the potential to add more ways to provide value to their customers. Our primary focus is more on the brand and consumer engagement and then we get to valuation.
TCG invests in companies that define culture and focuses on the media, entertainment, technology, sports, and consumer and digital media sectors
Linus walton
vice president
luke beatly
Entertainment was a source of the explosion of CSS businesses, led by Netflix and Spotify but recently joined by new entrants such as Mubi and PlayOn! Sports  
Fitness, Outdoor, and Lifestyle
The Fitness/Outdoor space has been the leader in converting freemium users to paid

Many of these companies started offering a free or ad supported tool, but have gradually shifted towards a CSS revenue model for their biggest fans  
Health & Mindfulness
Personal Finance
Prosumer, Health & Mindfulness, and Personal Finance 
There has been significant growth in these categories, with many existing unicorns (Greenlight, Calm, Noom, and Asana) and future unicorns (Grammarly, Flo, Natural Cycles, and Speechify)  
Edtech, Family/Dating, and Other
Edtech and Family/Dating have had an incredibly challenging yet positive performance through the pandemic as schools and singles shifted to online ways to engage

Keep a close eye on the Other category as new and exciting CSS businesses are started daily   
Premier CSS financial investors
The pool of CSS investors continues to grow
CSS metrics to watch
Enterprise SaaS versus consumer subscription
  • Investors look at many of the same investment metrics as SaaS companies

  • However, key nuances are important to recognise, and CSS businesses will have a different definition of success
  • Higher early user churn is typically the biggest hurdle for traditional investors to overcome

  • However, entrepreneurs can highlight low customer acquisition cost (CAC) and long-term retention to illustrate the staying potential of their CSS business
Source: Nico Wittenborn at Adjacent (@Adjacent on Twitter)
Investor benchmarking criteria
CSS investors evaluate each business based on its own unique attributes as well as sub-industry nuances
There are industry standard metrics that help investors differentiate good businesses from great businesses
Investor dive into key CSS metrics and KPIs
Top-line growth metrics –
user growth & bookings MRR/ARR
  • Investors will look closely at users – including the free users, active users (MAU) and most importantly the paid users

  • CSS top-line revenue can be measured in several ways: 

  1. Cash bookings: Amounts received each month in upfront subscription payments
  2. Monthly recurring revenues (MRR), annual recurring revenue (ARR), and GAAP revenue

  • Important to show continued efficient growth in top-line metrics
LTV/CAC ratio
  • Customer lifetime value = number of months or years the average customer stays with the company multiplied by the ARPU times the gross profit margin (%)

  • CSS businesses have the unique attribute in that they typically have high churn after the first pay period or trial period ends Companies typically see churn of first-time users anywhere between 20% and 70% of total sign-ups

  1. Consequently, investors are looking for retention of users AFTER the first pay period - typically the 3rd, 6th or 12th month. High retention in those periods indicates that users are discovering the value in the service and are likely to be retained long-term, building the ‘CSS cohort layer cake’
  2. Exceptional CSS businesses renew 50%+ of each annual cohort and 40% of Year 2

  • Customer acquisition cost (CAC) payback period is typically stated in months. Represents the time taken to fully pay back sales and marketing investment to acquire a single customer

  • CAC payback of <3 month is critical to counter the high churn of initial users

  • 50%+ of users coming through organic channels is generally considered great
Free to paid conversion rates
  • Free users: Number of users using the platform or business. Typically measured monthly or MAU

  • Paid users: Number of users paying for a subscription (typically monthly or annually)

  • Free to paid conversion rate: The ratio of users who start as free users and convert to paying users. This number varies by industry and type of business as well as how the benefits behind the paywall are structured and accessed
Gross margins
Free cash flow / burn rate
  • Growth is of paramount importance, with excess cash being used to fuel growth

  • Important, therefore, to understand the cash burn in the business and planning for capital-efficient hyper-growth
  • The type of service or content being provided can vary between CSS industries. For example, exercise apps develop fitness classes at a high cost while a hiking app may be leveraging user-generated content (UGC) to enhance its offering

  • Typically companies leveraging UGC have higher gross margins and a sustainable competitive advantage as their product and service is influenced and improved by the content and data users are generating

  • Investors have been proven willing to pay up for CSS businesses leveraging UGC to provide a unique service
Key CSS definitions and formulas
definition & formula 
  • Normalised measurement of recurring revenue, most frequently measured with a constant value in each month of the subscription period.
Customer acquisition cost (CAC)
  • All S&M expenses for new customers. Sometimes excludes personnel management S&M costs.
  • Typically measured over a month or quarter.
  • Includes users acquired through free and paid channels.
Customer lifetime value (CLV)
  • Amount of gross profit a customer is calculated to deliver to the company over the lifetime of the customer.
Payback period
Churn (gross & net)
  • The number of months a company requires to pay back its cost of customer acquisition.
  • Gross churn is the number of customers lost in a given period or cohort regardless of account expansion or growth.
  • Net churn is the number of customers gained or lost in a given period or cohort after taking into consideration new, reactivated, or expanded accounts.
Top-line growth metrics – user growth & bookings MRR/ARR
Past CSS insights 
The importance of the paywall
Success in the CSS space depends on placement of the paywall within the customer’s experience
Gaining users through a ‘freemium’ offering is critical to encouraging people to try a product. To effectively monetise them, they need to be converted into paying customers. 
That means correctly placing the paywall at the correct point to provide the maximum value to paying subscribers but enough functionality to explore the service before paying.
Overcoming churn to build the ‘cohort revenue layer cake’
As entrepreneurs build their companies, they can typically invest in growth marketing or product innovation to drive retention
Focusing on engagement and mitigating churn will result in a better long-term business than high growth and flashy advertising
​Source: GP Bullhound proprietary analysis
Essential building blocks of subscription development 
Companies are quickly building the ‘pick-axes and blue jeans’ companies of the CSS gold rush
Omnichannel tools are becoming market ready to allow niche consumer subscription companies to launch quickly
Free + advertising versus paid subscription – the ultimate test
That was true in the early ages of the Internet, but consumers are waking up to the pitfalls of ‘free’, including intrusive ads, the sale of personal data, and poor product quality
Pandora and Spotify started as free apps, using ads to generate revenue, and that is where the story diverged 
Spotify focused on UX, adding features like downloading songs and playing music offline behind  paywall – paid users quickly accelerated, revenue surged
Pandora focused only on ads, was late to the subscription game, and was ultimately sold to Sirius
​Sources: Capital IQ and Pitchbook (2020 estimates from CapIQ) 
Historically, investors have been conditioned to believe that consumers will always prefer a free option supported by ads versus paying
Pricing versus utilisation
Our research has shown that consumers are willing to accept a higher price in exchange for high usage frequency
​Sources: Public data and GP Bullhound research; 8tracks, $30/yr rever, $48/yr
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US registered broker-dealer Eric Crowley beneficially owns <1% of the outstanding shares of Speechify, which is a subject company of the present research report.

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In the last twelve months, GP Bullhound LLP or an affiliate is or has been engaged as an advisor to and received compensation from, or has invested in the following companies mentioned in this report: Amazon, Apple, Asana Rebel, CareerFoundry, Cleanshelf, Customer Thermometer, Discord, Facebook, Fishbrain, Flexjobs, Glovo, HackerOne, Klarna, Lingoda, Match Group, Mubi, Oxbotica, Partnerize, PayPal, Pinkbike, Playtomic, RealVNC, Recruitee, Revolut, Salesforce, Signavio, Slack, Spotify, Unity Technologies, Vivino, and Whoop.