Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

by Tien Tzuo

Utilities. The big electricity, gas, and water companies used to follow a pretty standard playbook: spend lots to build a giant utility plant, spend lots to transfer that utility across a very long distance, then charge lots in order to pay down your infrastructure debt. Today things are changing. As The Economist notes, “Not only are renewables playing a far bigger role; thanks to new technology, demand can also be tweaked to match supply, not the other way round.” New consumption-based digital services like SolarCity are enabling solar-powered homes to sell electricity back into the grid, for example, and home energy management systems like Nest are helping utilities lower their power consumption at peak times in order to avoid shortages. Lots of people aren’t getting electricity bills anymore—they’re getting electricity checks. Yes, utilities are some of the oldest subscription-based businesses around, but today they’re moving away from big, monodirectional channels to smaller, responsive networks (notice a recurring theme here?). Thanks to sensors and connectivity, the entire industry is starting to “wake up” and unlock all sorts of new value: French electricity provider ENGIE (which traces its roots to the company that built the Suez Canal) now has an app-based service that lets you book home service appointments; Schneider Electric (founded in 1836) partners with municipal districts not to sell them more power, but to help them reduce energy consumption by 35 percent...