What is a subscription?

Subscription or subscription model are terms increasingly encountered for various types of services. The dynamic development of the internet has led to a fundamental change in how we consume and — above all — how we purchase all kinds of digital products.

Subscription — what is it? Let’s start with the definition. A subscription is broadly a form of payment where customers regularly pay for access to services, content, or products for a specified period, usually monthly or yearly. A subscription model, on the other hand, is a business strategy in which a company offers its products or services in the form of a subscription.

A good example is the VOD (Video on Demand) industry, which has flourished in recent years, leading not only to the collapse of the entire DVD/Blu-Ray sales sector but also heavily shaking the foundations of the cinema industry. Instead of buying a disc with a movie, the dominant model is now subscribing to one or more VOD services (for example Netflix, Amazon Prime, HBO MAX, Disney Plus, or the Polish Polsat Box Go), which provides access to the entire library of films and series offered by the platform. 

Subscription — advantages and disadvantages

The main advantage of the subscription model for both customers and companies is the predictability of income. For customers, a fixed monthly fee can be easier to manage than a single high price for a specific product or service. It also allows regular access to updates and new content without additional costs. For companies, the subscription model provides a stable cash flow, facilitating investment planning, product development, and above all maintaining relationships with customers. Psychological factors also come into play — customers often forget to cancel the service after using its resources, which combined with a linked payment card leads to subsequent charges until payments are manually stopped.

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

Many services that were once free are slowly becoming paid or raising prices. If we have built our digital resources based on a given service and it drastically raises fees, a problem arises — especially if it is not about entertainment but business services, such as specialized software for companies.

Is the subscription paid?

Not always. Many producers offer a free trial period of the service, which allows familiarization with the functionalities without paying fees. This is especially popular in software. Many creators encourage free subscriptions to their services, which allows them to grow their community and retain users. This is common for email newsletters — the creator does not charge for regularly delivering content (e.g., educational materials on a topic) and often provides elements valuable for the recipient, such as discounts on products. The price, however, is remaining on the newsletter list, thus voluntarily staying in the company’s business orbit.

Subscription — examples

Below is a list of several example services available under the subscription model divided by industry. Of course, this is only a list of the most iconic examples, and thousands of new services appear daily.

Music: Spotify, Tidal, Apple Music

GamesGames: Xbox Game Pass, Playstation Plus

VODVOD: Netflix, Disney Plus, HBO MAX, Amazon Prime

Books/audiobooks: Legimi, Audioteka

JournalismJournalism: New York Times, Wall Street Journal, Gazeta Wyborcza, Rzeczpospolita

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

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