Subscription management company Zuora is acquiring Sub(x), an AI solution for media/publishing firms.
The acquisition will allow Zuora to turn its paywall offering into an artificial intelligence (AI)-powered paywall solution to garner better insights into subscriber behavior, the companies said in a Tuesday (June 18) news release.
“Today’s competitive media landscape and changing market dynamics have increased pressure to effectively monetize and accelerate revenue growth,” the release said. “This requires more dynamic systems and technology that can continuously adapt pricing and packaging strategies at scale. A legacy method, such as propensity scoring, is static and does not update unless rerun with new data, which can hinder agility.”
Introducing new offers, pricing changes, payment methods or bundles can take days or even weeks, the release added, leading to missed opportunities and lost revenue.
Sub(x)’s AI uses reinforcement learning powered by first-party data that allows companies to optimize conversion with no need for manual testing and experimentation, cutting the time and costs associated with this type of activity by up to 90%.
“Sub(x) adds a cutting-edge AI layer to Zuora, empowering our customers to constantly learn, present the right offers and continue to engage subscribers as preferences change over time,” Zuora founder and CEO Tien Tzuo said. “Welcoming Sub(x) to the Zuora team immediately expands our holistic solution for media companies, while accelerating the pace of our AI innovation across Zuora’s monetization suite.”
The announcement comes weeks after reports that Zuora was considering a sale and other options after at least one company expressed interest in acquiring it.
PYMNTS Intelligence research has tracked the growing interest in subscriptions among consumers, with Generation Z leading the way.
“Zillennials are far likelier than the population overall to hold subscriptions,” PYMNTS wrote Tuesday. “Three-quarters of consumers in this bridge generation shared that they paid for at least one monthly subscription in the last month, versus 63% of the overall sample.”
Members of this age group with extra income are the likeliest of all to seek out subscriptions, with 84% of high-income members of Generation Z having made such a payment compared to 76% of high-income consumers on the whole.
Additional findings from the PYMNTS Intelligence/sticky.io report “The Impact of Subscription Models on Consumer Choice” found that discount refill subscribers — those who commit to receiving products at a fixed cadence in exchange for a price reduction — want the ability to easily make changes to subscription frequencies, without having to first unsubscribe.
The data shows that these consumers are 12% more likely to point to this factor as the most important reason they subscribe.
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