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What is the ‘Subscriber Share’ Model?

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The ‘Subscriber Share’ Model

The “Subscriber Share” model is the revenue-sharing approach implemented by PoweredTemplate to distribute 50% of net subscription revenue among individual Authors.

PoweredTemplate takes pride in being among the early adopters of the subscriber share model at scale. However, it’s essential to note that subscriber share wasn’t pioneered by us; its origins trace back to its proposal as a fairer way to distribute revenue share among indie artists in the realm of music streaming services.

At the core of the subscriber share methodology is the principle that a subscriber’s funds should directly benefit the content and Authors they actively use and value. This diverges significantly from the traditional “big pool” method of dividing subscription revenue.

Subscriber share also aligns Author incentives with the goal of attracting and retaining more subscribers over time. It particularly favors Authors who:

  • Create items with broad appeal to a diverse subscriber base.
  • Develop unique items that effectively serve various niches, even if they cater to a smaller number of specific items.
  • Choose not to invest time in creating imitative items to target prolific downloaders.
  • Adopt a more sustainable and long-term approach to their content creation.

The sole exception to the 50% allocation pertains to Team subscriptions, where we allocate a share of 25% of net revenue to Authors. This adjustment considers the associated costs of expanding the Team business in contrast to regular self-serve subscriptions. Further details are provided below.

PoweredTemplate Plan Types

Our customers on PoweredTemplate have the flexibility to choose from various plan types. The most common is our Individual plan. You can find detailed information about our offerings and pricing on the PoweredTemplate pricing page, but here’s a brief summary:

  • Individual plan: our most frequently chosen subscription, designed exclusively for single users.
  • Student plan: the same product as the individual plan, available at a discounted rate for students.
  • Team or Enterprise plan: a customized plan suitable for organizations, agencies, and teams of six or more. Typically, these plans include personalized licensing and tailored indemnification, otherwise, it’s the same product offering as an individual.

How ‘Subscriber Share’ works across our different plans

With subscriber share, your earnings as an Author are directly tied to the funds collected from each individual subscriber.

For single-seat subscriptions, we assess each subscriber individually and allocate you a share of 50% of their net revenue based on how crucial your items were to them (i.e., your share of all item points they used in that period).

What is the 'Subscriber Share' Model? -- Share Example

For our multi-seat subscriptions (the PoweredTemplate Team plan), the calculation of usage is now based on individual seats within the subscription, effective from 1st January 2024 earnings. Aligned with the original intent of the Subscriber Share model, this ensures that revenue from users is shared based on how crucial the Author’s items are to each individual user.

In the case of PoweredTemplate Team plans, we allocate a share of 25% of net revenue to Authors. This adjustment takes into consideration the costs associated with expanding the Enterprise business, contrasting with our regular self-serve subscriptions. These costs encompass heightened indemnification and dedicated sales, support, and account management.

How is the Author’s Revenue Allocated?

To illustrate the breakdown of the share in terms of downloads and item points, let’s examine a few straightforward examples using individual-seat subscriptions for simplicity.

Example 1: An Individual Subscriber

For instance, suppose there is only one subscriber. They generate revenue (excluding transactional taxes) of $29 for the month and download items worth a total of 20 item points. The amount available for distribution among the Authors of those items is 50% x $29 = $14.50.

Now, consider that one of the items they used is valued at 3 item points. Your items constitute 3 points out of the total 20 points used, resulting in you earning 3/20 x $14.50 = $2.18 from that one subscriber for the month.

Example 2: Multiple Individual Subscribers

Let’s expand this example to involve 4 subscribers, each with their distinct usage patterns:

  • Subscriber A corresponds to the individual in the first example.
  • Subscriber B is a more frequent user and consumes 3 points worth of your items.
  • Subscriber C exclusively downloads your items, not from any other source.
  • Subscriber D did not use any of your items at all.

The amount you would earn from each subscriber in this example is detailed below.

What is the 'Subscriber Share' Model? -- How is the Author's Revenue Allocated?

This example illustrates several key aspects of subscriber share:

  • The more subscribers who use your items, the more you earn.
  • The greater your share of a subscriber’s usage, the more you earn.
  • If a subscriber uses some items but not yours, you don’t share in their net revenue.
  • If a subscriber solely uses your items, you get all of their net revenue.

Please note: The above examples are purely illustrative, and your earnings will, of course, vary depending on the number of subscribers, how much net revenue they generate, and which specific items they use in a given month.

What is the Effect of Subscriber Share on Author Earnings?

The total amount paid out to Authors is 50% of net revenue for Individual seat subscriptions and 25% of net revenue for Team Subscriptions. Subscriber share simply affects how Authors’ earnings are allocated among individual Authors.

Here’s a graphic representation of how we calculate the share of a subscriber’s download:

What is the 'Subscriber Share' Model? -- What is the Effect of Subscriber Share on Author Earnings?

We opted for subscriber share for PoweredTemplate because we believe it’s the fairest possible way to divide earnings.

Together, these incentives have significant implications for how the PoweredTemplate content library will evolve over time: it’s not about everyone chasing the big “hits” or “blockbusters”, but instead, each Author is rewarded for creating unique, diverse, & valuable content that attracts and retains subscribers.

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