Time's Up!

19Subscription Business Income Statement and KPIs

Revamping a business model is not easy; it requires visible, consistent commitment from the top. It takes time. First, the more established an industry's norms, the more difficult it is to innovate business models. Everyone has a big stake in preserving the status quo, but it is critical to resist the temptation to do so.

—A.G. Lafley and Ram Charan, The Game‐Changer, 2008

When Warner Brothers debuted the movie The Suicide Squad on August 6, 2021, the Hollywood press reported it was a failure due to its weak box office numbers. Yet the movie was watched on HBO Max's streaming service nearly 3 million times on just one weekend.

It is meaningless to impose old metrics on new models. The movie theater market is decelerating—especially since COVID‐19—and whether it returns to its prior levels is yet to be seen. What we do know is that streaming services utilize a different business model, which requires new metrics. Movie theaters are essentially popcorn vendors facing increasing competition from alternative mediums of entertainment. Is it possible that streaming services will enter into this business, such as Netflix, or HBO? Also, think about how streaming services will change how actors and actresses are compensated. It certainly will no longer be based on gross box office receipts. New models demand new metrics.

Our old metrics and key performance indicators (KPIs) are still obsessed with counting the number of hamburgers, ...