Subscriptions take off

subscriptions take offToday, Surf Air, the world’s first subscription airline, launched in San Francisco. The new airline aims to shake up the traditional passenger service model in much the same way Netflix upended movie rentals.  Subscribers pay a set fee each month for up to four boarding passes and tailored access to flights between San Francisco, Monterey, Santa Barbara and Los Angeles.

We’re not surprised to see more subscriptions take flight, but it is surprising to see the diversity of industries and use cases–from movies to razors to diapers to software.  Regardless, the attraction of the subscription model is consistent across all of these, and it mirrors feedback we’ve gotten from our own customers:

  • Convenience. Subscribers get what they want, when they need it. They also always get the latest products and information without hassles.
  • Savings. Subscribers save money upfront and over time, especially if they are frequent users.
  • Reliability. Subscriptions are easier to budget for, and particularly for businesses, subscription services can help balance expenses over time.

In the world of software, we view subscriptions as the future, and as we said on this blog last month, we think all Office customers will choose to subscribe in the next decade. We’re already seeing significant momentum with more than one million Office 365 Home Premium subscribers since the product’s launch on January 29–a faster adoption rate than reported by DropBox, Facebook and HuluPlus. And, Office 365 for business is Microsoft’s fastest growing product ever and is on a $1 billion annual run rate.

It will be fascinating to watch how Surf Air does and whether this model can extend successfully into even broader territory. What do you think? Will Surf Air take off or be grounded? Talk back to @Office or in the comments below to tell us what you think.