What is a subscription?

The terms "subscription" and "subscription model" are increasingly common in connection with various types of services and platforms. The rapid growth of the internet has led to a fundamental shift in how we consume and—above all—how we purchase all kinds of digital products.

Subscription — what is it? Let’s start with a definition. Broadly speaking, a subscription is a payment method in which customers pay regularly for access to services, content, or products over a set period, usually on a monthly or annual basis. The subscription model, on the other hand, is a business strategy under which a company offers its products or services on a subscription basis.

A good example is the VOD (Video on Demand) industry, which has boomed in recent years, leading not only to the collapse of the entire DVD/Blu-ray sales sector but also shaking the very foundations of the movie theater industry. Instead of buying a movie disc, the dominant model now is to subscribe to one or more VOD services (such as Netflix, Amazon Prime, HBO MAX, Disney Plus, or Poland’s Polsat Box Go), which provides access to the entire library of movies and TV shows offered by that platform. 

Subscription — Pros and Cons

The main advantage of the subscription model for both customers and businesses is revenue predictability. For customers, a fixed monthly fee may be easier to manage than a one-time, high price for a specific product or service. It also provides regular access to updates and new content at no additional cost. For businesses, the subscription model provides a stable cash flow, which facilitates investment planning, product development, and, above all, maintaining customer relationships. Other psychological factors also come into play—customers often forget to cancel a service after using its resources, which, combined with a linked payment card, leads to another charge being collected until the payment is manually turned off.

However, this model comes with many limitations. A few years ago, when we bought a disc containing a movie or a particular program, we became the owner of the medium and could use the product on our own computer in a virtually unlimited way. Today, in most cases, when we cancel a subscription, we lose access to the content. 

Many services that used to be free are gradually becoming paid services or raising their prices. If we’ve built our digital assets around a particular service and that service drastically increases its fees, a problem arises—especially if we’re not talking about entertainment, but rather business services, such as specialized software for companies.

Is there a fee for the subscription?

Not always. Many providers offer a free trial period for a given service, allowing users to familiarize themselves with its features without paying any fees. This is particularly common with software. A large number of providers encourage users to sign up for a free subscription to their services, which allows them to grow their community and retain users. This is common with email newsletters—the creator doesn’t charge for regularly delivering content (e.g., educational materials on a specific topic), and often provides benefits that are valuable to the recipient, such as product discounts. The cost, however, is staying on the newsletter list—and thus voluntarily remaining within the company’s business orbit.

Subscription — examples

Below is a list of a few examples of services available through a subscription model, broken down by industry. Of course, this is just a list of the most prominent examples, and thousands of new services are added every day.

Music: Spotify, Tidal, Apple Music

Games: Xbox Game Pass, PlayStation Plus

VOD: Netflix, Disney+ and HBO Max, Amazon Prime

Books/audiobooks: Legimi, Audioteka

Journalism: The New York Times, The Wall Street Journal, Gazeta Wyborcza, Rzeczpospolita

Software: Adobe Cloud, Notion, Apple Cloud, Microsoft 365

Social Media: X (Twitter) Blue, Discord Nitro, Twitch Turbo, Reddit Premium, LinkedIn Premium