How (and Why) Subscription Model Works

You may have heard about the ongoing subscription boom. Every month, more and more subscription-based companies enter the market. Some of them change the rules of the game while others disappear in no time. Go through this entry to learn how to join the former: embrace the subscription business model with all of its pros and cons, and translate this knowledge into profitable decisions!

There are multiple types of subscription model but its basic version can be described as a recurring, cyclical (not necessarily regular) exchange of goods or services. As it is implemented by business owners in many ways, we shall rather talk about subscription-based models, not just one model.

There are two major types of subscription models:

1. fixed-fee models in which consumers pay a fixed fee in advance and only after the payment is made, they get or maintain access to the product or service,
2. pay-as-you-go models in which consumers pay a subscription fee reflecting the actual usage of the service or product after a predefined time.

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