HP CFO Marie Myers revealed (via The register) the impact that customers' transition from transactional-only to subscription-based models has had on business growth.
According to Myers, the company's customers are about 20% more valuable when they subscribe to a service like Instant Ink because they are more likely to stay loyal longer.
More broadly, tech companies are under increasing pressure from antitrust authorities over measures and terms of service that lock in customers and make it difficult for them to leave, questioning the long-term sustainability and profitability of their subscriptions.
Discussion about HP subscriptions
Myers is quoted as saying, “We absolutely see when you take a customer off that purely transactional model… whether it's Instant Ink, plus adding that paper, we see kind of a 20% increase in the value of that customer, because you lock that person up and enter into a longer-term relationship.
HP's ink plans range from $0.99 per month for 10 pages to $24.99 per month for 700 pages. There are also toner subscriptions, ranging from $1.99 to $19.99 per month, that are cheaper per page.
The subscriptions are sold on a convenience basis: consumers automatically receive ink in the mail when it is time to replace an empty cartridge or toner.
In its fiscal year 2023 final report, HP noted that consumer subscriptions, including Instant Ink and other consumer subscriptions and consumer digital services, had experienced significant growth.
Yet the company's consumer print business fell by an alarming 18% in the twelve months to October 31, 2023, indicative of a sector suffering from environmental and sustainability pressures.
Ny Breaking has contacted HP for comment.