In today’s dynamic business landscape, companies continually seek effective revenue models to ensure sustainability and profitability. Two prevalent models are the subscription-based model, employed by giants like Netflix and Amazon Prime, and the pay-per-use (or transactional) model. This article delves into the background, benefits, and disadvantages of each model, identifies the types of businesses best suited for them, and explores how Jamaican and Caribbean companies can leverage these models to enhance revenue and profitability.

Background of Revenue Models

Subscription-Based Model: This model involves customers paying a recurring fee—monthly, annually, or at other regular intervals—to access a product or service. Historically, this approach was common in industries like publishing (magazines and newspapers) and has now expanded to digital services, software, and entertainment platforms.

Pay-Per-Use Model: In this model, customers pay based on their actual usage of a product or service. This approach is prevalent in utilities, telecommunications, and emerging digital services where usage can vary significantly among customers.

Benefits and Disadvantages

Subscription-Based Model:

Benefits:

Predictable Revenue: Businesses enjoy a steady and predictable income stream, facilitating better financial planning and resource allocation.

Customer Retention: Regular interactions foster stronger customer relationships and loyalty.

Scalability: Easier to introduce new features or services to existing subscribers, enhancing value over time.

Disadvantages:

Churn Risk: Customers may cancel subscriptions if they perceive insufficient value, leading to revenue loss.

Continuous Value Delivery: Requires ongoing investment in content or service improvements to maintain customer interest.

Pay-Per-Use Model:

Benefits:

Flexibility: Attracts cost-conscious customers who prefer paying only for what they use.

Lower Entry Barrier: Customers can access services without committing to recurring payments, which can be appealing for infrequent users.

Disadvantages:

Revenue Variability: Income can fluctuate based on customer usage patterns, making financial forecasting challenging.

Complex Billing Systems: Requires robust systems to track usage accurately and bill customers accordingly.

Business Suitability

Subscription-Based Model: Ideal for businesses offering services or products with ongoing value propositions. Examples include streaming services (e.g., Netflix), software-as-a-service (SaaS) platforms, and membership-based organizations.

Pay-Per-Use Model: Suited for services where usage varies among customers, such as utilities, cloud computing services, and on-demand content platforms.

Maximizing Revenue in Jamaican and Caribbean Companies

For businesses in Jamaica and the broader Caribbean, adopting these models can open new revenue streams and enhance profitability:

Digital and Streaming Services: With the global rise of digital consumption, local content creators and media houses can adopt subscription models to offer exclusive Caribbean-focused content, catering to both regional and international audiences.

Tourism and Hospitality: Hotels and resorts can introduce subscription packages for frequent travelers, offering benefits like discounted rates, priority bookings, and exclusive experiences.

Utilities and Telecommunications: Implementing pay-per-use models for services like electricity, water, and mobile data can provide customers with flexibility, potentially increasing usage and revenue.

Agriculture and Produce Delivery: Farmers can offer subscription boxes delivering fresh produce to customers regularly, ensuring steady income and promoting healthy eating habits.

Fitness and Wellness: Gyms and wellness centers can provide subscription-based access to virtual classes, personalized training sessions, and wellness resources, expanding their reach beyond physical locations.

Implementation Considerations

Market Research: Understand the target audience’s preferences and willingness to adopt new payment models.

Infrastructure Investment: Develop reliable billing systems and digital platforms to manage subscriptions or track usage effectively.

Regulatory Compliance: Ensure adherence to local laws and regulations, especially concerning digital transactions and data protection.

Customer Education: Inform customers about the benefits and functionalities of the chosen model to encourage adoption.

Market Saturation – A Key Challenge Of The Subscription Revenue Model

This perspective highlights a key challenge of the subscription revenue model—that of market saturation. Since subscription-based businesses rely on a recurring customer base, their revenue growth is often tied to acquiring new subscribers or increasing prices for existing ones. When the market becomes saturated (i.e., most of the potential customers who would subscribe have already done so), companies are forced to find alternative ways to boost revenue, such as:

Raising Subscription Prices – As seen with Netflix and Amazon Prime, companies periodically increase fees to maintain revenue growth, but this risks customer churn if price hikes outpace perceived value.

Introducing Tiered Pricing – Companies may create premium subscription tiers with additional benefits to encourage higher spending.

Expanding Services or Content – Adding new features, services, or exclusive content can justify price increases and retain subscribers.

On the other hand, the pay-as-you-go (PAYG) model offers more scalability and revenue flexibility because revenue is directly tied to usage volume rather than a fixed subscriber base. Businesses can grow revenue in several ways:

Encouraging More Frequent Use – Companies can create incentives for customers to use the service more often, such as dynamic pricing or special promotions.

Expanding Offerings – Businesses can introduce new features or services that increase usage without necessarily increasing prices.

Tapping into New Customer Segments – Since PAYG has lower entry barriers, it can attract a wider audience, including occasional users who wouldn’t commit to a subscription.

Impact on Business Strategy

Subscription models benefit from stable, predictable revenue but face growth limitations once they hit market saturation. Companies must innovate to retain users or find new markets.

PAYG models provide more room for expansion and revenue diversification but require continuous customer engagement strategies to drive repeat purchases.

For Jamaican and Caribbean businesses, a hybrid approach—offering both subscription and PAYG options—could provide the best of both worlds, allowing companies to maximize revenue potential while maintaining customer flexibility.

By thoughtfully selecting and implementing the appropriate revenue model, Jamaican and Caribbean businesses can enhance their competitiveness, cater to evolving customer needs, and achieve sustainable growth in the modern economy.

GraceKennedy Limited (GK) has announced key leadership changes set to take effect in 2025 as part of the Company’s succession plan.

Effective February 14, 2025, Andrea Coy will assume the role of CEO of GraceKennedy Foods, a move which will see the integration of the domestic and international segments of GK’s food division under a single leadership structure.

Since joining GraceKennedy in 2005 as Hi-Lo’s Financial Controller, Coy has held several key leadership roles within GK, including General Manager of Hi-Lo Food Stores and World Brands Services, CEO of Hardware & Lumber, Senior General Manager of the GK Foods Global Category Management Unit, and CEO of GK Foods Domestic. She has led GK’s international food operations since 2018 and is a member of the GK Executive Committee. Under her leadership, both GK’s domestic and international food businesses recorded significant growth in revenues and profitability. Coy holds degrees in Accounting from the University of the West Indies and is a member of the Institute of Chartered Accountants of Jamaica. She specializes in Turnaround Management and has completed advanced studies in the field at Harvard Business School. She serves on the Board of the Bank of Jamaica.

Later this year, following a distinguished 25-year career at GK, Grace Burnett will retire as CEO of the GraceKennedy Financial Group (GKFG), effective August 14, 2025. Upon her retirement, Steven Whittingham, the current Deputy CEO of GKFG, will step into the role of CEO, ensuring a seamless transition in leadership.

Grace Burnett

Burnett joined GK in 2000 and has held several key leadership roles within the Group. She previously served as Managing Director of GK General Insurance and Allied Insurance Brokers, where she led strategic operations for GK’s insurance business. From 2014 to 2019, she was the CEO of GK’s Insurance Segment, driving growth and innovation in the sector. An attorney-at-law, she has been the CEO of GKFG since 2016 and holds the position of the President & CEO of GraceKennedy Money Services. She is also a member of the GK Executive Committee. Well-known for her expertise in customer service, operations, and talent development, Burnett has earned accolades both within GK and externally. Her outstanding contributions to the insurance industry and exemplary leadership were formally recognised in 2024 when she received the prestigious Insurance Association of Jamaica Leadership Excellence Award.

Steven Whittingham

Whittingham joined GK in 2013 and has been Deputy CEO of GKFG since 2022, overseeing the Group’s Insurance Segment, merchant banking, and investment portfolios. He is a member of the GK Executive Committee and leads GK’s digital transformation. He has held various leadership roles within GK, including Chief Investment Officer of GraceKennedy Limited, Chief Operating Officer of GKFG, President of First Global Financial Services and Managing Director of GK Capital Management. During his tenure he has been instrumental in driving GK’s expansion through strategic mergers, acquisitions, and greenfield startups, consistently delivering impressive growth across portfolios. Whittingham holds dual degrees in Systems Engineering and Economics from the University of Pennsylvania and an MBA from Harvard Business School. In 2024 he was appointed Chairman of the Jamaica Stock Exchange, and he has served on several public and private sector boards.

These announcements come as GK prepares for another major leadership transition later this week. Last month, the Company confirmed that Group CEO, the Honourable Don Wehby, CD, OJ, will retire on February 14, 2025, stepping down from the Board of Directors after a distinguished tenure.

He will be succeeded by Frank James, current CEO of GK Foods Domestic and former Group CFO. GraceKennedy remains steadfast in its commitment to executing its strategy and ensuring excellence across all its operations.

These leadership changes align with the Company’s commitment to fostering a performance-driven culture while promoting innovation and consumer centricity. As the GK team strives to achieve its vision of becoming the number one Caribbean brand in the world, these appointments will provide continuity and strategically position GraceKennedy for sustained growth and innovation in the years ahead.

Derrimon Trading Company advises that Mr. Winston Thomas has resigned from the Board of Directors of Derrimon Trading effective January 31, 2025. We thank Mr. Thomas for his contribution to the Board and wish him every success in his future endeavours.

Sagicor Group Jamaica Limited (SJ) wishes to advise that Mr. Gilbert Palter resigned as a Director of SJ and its subsidiary, Sagicor Life Jamaica Limited (SLJ) effective January 31, 2025. SJ is pleased to announce that the SJ and SLJ Boards have approved the appointment of Ms. Cathleen McLaughlin as a Director of these companies effective February 1, 2025, subject to regulatory approval. Ms. McLaughlin holds a Bachelor of Arts degree from the University of Pennsylvania as well as a Juris Doctor degree from the University of Pennsylvania Law School and has over three (3) decades of experience working in the area of Corporate Finance, including experience in capital markets in the Caribbean and Latin America.

Supreme Ventures Limited (SVL) is pleased to announce the appointment of Mr. Stefan Miller, as the acting CEO of Supreme Ventures Gaming Limited effective February 1, 2025.

Pan Jamaica Group Limited (‘PJG’) announces that Mr. Eric Scott, Deputy Chief Financial Officer will be leaving PJG to pursue other opportunities, effective March 31, 2025. PJG thanks Mr. Scott for his contribution to the Group and wishes him every success in his future endeavours.

Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, says he wants to see more micro, small and medium-sized enterprises (MSMEs) listed on the Junior Market of the Jamaica Stock Exchange this year.

He also urged MSMEs to take advantage of the recent amendment of the Income Tax Act, which allows companies to raise up to $750 million during an initial public offering, an increase of $250 million.

Senator Hill, who was addressing Wednesday’s (January 15) post-Cabinet press briefing at Jamaica House, reasoned that the aim is to build companies that can compete not just in Jamaica but regionally and internationally.

“Two of our biggest companies have big companies in the United States – Grace and Jamaica Broilers Group. More than 50 per cent of Jamaica Broilers Group’s income comes not from Jamaica but from the United States, where they own a lot of companies,” he said.

Senator Hill shared that trade data show that between 1960 and 2021, negative trade balances were recorded in 60 of the 61 years.

A positive trade balance was only recorded in 1966.

“Unless we go and find new markets for our products and services and new markets for investments to come into Jamaica, we’re not going to be the rich country that we have to be,” he said.

“I want the private sector in Jamaica to realise that there are tremendous opportunities, as Jamaica is not the same country it was 10 years ago. Lots of people are making money the right way.

We want more and more Jamaicans to invest and we have 20 agencies in my ministry alone to work with you,” Senator Hill appealed.

For her part, Minister of Finance and the Public Service, Hon. Fayval Williams, said the Government is committed to facilitating further growth of the MSME sector.

“We believe that this will positively impact the MSME sector, as it will broaden the scope for more MSMEs to benefit from the suite of incentives afforded. Further, the increase will provide room for these companies to raise capital and improve productivity. This policy is in recognition of the pivotal role that MSMEs play in driving economic growth while promoting and encouraging local entrepreneurship,” Mrs. Williams said.

The 48 companies currently listed on the Junior Market benefit from a range of tax incentives that include conditional relief from income tax payments, exemption from transfer tax and stamp duty on transfer of shares.

The Junior Market had a market capitalisation of $148.5 billion as at the end of December 2024, having started with $785 million in 2009.

By: Judana Murphy,JIS