Spotify
Spotify’s entire business model relies on a lot of their users converting from the free to the paid subscription, so they keep a lot of options behind the paywall. When you’re on the free plan, you can only access playlists that you can shuffle, you can’t play individual songs when you want to, and your song skips are limited to 7. The calculated risk here is that all this friction could drive users to other music listening platforms, including Apple Music or YouTube Music. The lifetime value comes from when users start creating their own playlists for different experiences in different parts of their life. Over time, there is so much memory associated with the playlists and experiences they’ve curated on the platform, which is only possible on a paid plan.
Figma
Figma is very interesting because they allow the individual user to do a good amount of things. On each page, they can only have up to three pages, but generally, no features are constrained until the user starts to collaborate. Collaboration is where the paywalls will appear. This includes version history or shared team libraries. This makes a lot of sense because they’re getting users to understand how to use the platform individually, but they make their money from organizations choosing to buy a Figma collaboration plan. The calculated risk here is that this will cause these bigger entities to turn to other design tools, but they know that the value of their product is high enough to where it’s worth it. This maximizes lifetime value by converting companies, not just users.
The New York Times
The New York Times model restricts viewing the article until they grab their attention with the first paragraph. This makes a lot of sense because if people want to stay up to date with good journalism and good news, they have to pay to see the rest of the article by grabbing their attention in the first part. The risk here is that people will find their news elsewhere, which is more concerning here because there are so many news sources and outlets. However, their platform offers a lot more like games, cooking, and news, so the value of investing in a membership comes from greater value and lifetime value.
