FitnessMate App

ProHub Comment

This profitability case requires candidates to calculate the required subscriber conversion rate by first determining annual revenue per subscriber and then backing into the target number of subscribers needed to match current ad revenue. The case tests mathematical precision, structured problem-solving, and business acumen around SaaS unit economics. Beyond the basic calculation, strong candidates should contextualize the recommendation by discussing growth potential, pricing strategy alternatives, and realistic achievability.

Estimated Time 15 minutes
Difficulty Hard
Source PeterK
50 / 100
FitnessMate, a popular fitness tracking smartphone app, is considering shifting its revenue model from ads-based to subscription-based. By how much should they increase the user-to-subscriber conversion rate to ensure that subscription revenue surpasses advertising revenue?

Clarifying Information

  1. Currently, FitnessMate has 20M users, 20k of whom are subscribers
  2. The ads revenue reached $3.6M in 2023
  3. The subscription fee is $10/month
  4. On average, each subscriber uses the app and pays the subscription 6 months a year