Subscription business model
The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service. The model was pioneered by publishers of books and periodicals in the 17th century, and is now used by many businesses, websites and even pharmaceutical companies in partnership with the government. Subscriptions Rather than selling products individually, a subscription offers periodic (daily, weekly, bi-weekly, monthly, semi-annual, yearly/annual, or seasonal) use or access to a product or service, or, in the case of performance-oriented organizations such as opera companies, tickets to the entire run of some set number of (e.g., five to fifteen) scheduled performances for an entire season. Thus, a one-time sale of a product can become a recurring sale and build brand loyalty. Industries that use this model include mail order book sales clubs and music sales clubs, private web mail providers, cable television, satellite television providers with pay television channels, providers with digital catalogs with downloadable music or eBooks, satellite radio, telephone companies, mobile network operators, internet providers, software publishers, websites (e.g., blogging websites), business solutions providers, financial services firms, health clubs, lawn mowing and snowplowing services, pharmaceuticals, renting an apartment, property taxes, as well as the traditional newspapers, magazines, and academic journals. Renewal of a subscription may be periodic and activated automatically so that the cost of a new period is automatically paid for by a pre-authorized charge to a credit card or a checking account. A common variation of the model in online games and on websites is the freemium model, in which the first tier of content is free, but access to premium features (for example, game power-ups or article archives) is limited to paying subscribers. Types and examples There are different categories of subscriptions: to A subscription for a fixed set of goods or services. Periodicals, such as a newspaper or magazine, have several types of subscriptions: Paid circulation Non-paid circulation Controlled circulation Subscription boxes contain a variety of consumables Community-supported agriculture Meal delivery service Meal kit delivery service A subscription for unlimited use of a service or collection of services. Usage may be personal and non-transferable, for a family, or under certain circumstances, for a group utilizing a service at one time. In the publishing industry, a subscription to a bundle of several journals, at a discounted price, is known as a "big deal". Software as a service A pay-as-you-go subscription where a consumer subscribes to purchase a product periodically. This is also known as the convenience model because it is a convenience for the customer to not have to remember to go find their product and buy it periodically. This model has been popularized by companies like Dollar Shave Club, Birchbox, and OrderGroove. Based on their success, many other retailers have begun to offer subscription model services. For example, a subscription to a rail pass by a company may not be individualized but might permit all employees of that firm to use the service. For