The model was pioneered by publishers of books and periodicals in the 17th century,[1] and is now used by many businesses, websites[2] and even pharmaceutical companies in partnership with governments.
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 a whole season.
Another approach is the usage-based pricing model, which calculates charges based on the extent of service or product utilization by the customer.
As revenues from digital advertising diminish, a paid subscription model is being favoured by more publishers who see it as a comparatively stable income stream.
[8] In the field of academic publishing, the subscription business model means that articles of a specific journal or conference proceedings are only available to subscribers.
Some subscription schemes (like magazines) also increase sales by not allowing subscribers to accept or reject any specific issue.
From a marketing-analyst perspective, the vendor has the added benefit of knowing the number of currently active members since a subscription typically involves a contractual agreement.
[3] Subscriptions which exist to support clubs and organizations call their subscribers "members" and they are given access to a group with similar interests.
[3] Subscription models often require or allow the business to gather substantial amounts of information from the customer (such as magazine mailing lists), and this raises issues of privacy.
[12] Because customers may only need or want some of the items received, this can lead to waste and an adverse effect on the environment, depending on the products.