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. The model was pioneered by publishers of books and periodicals in the 17th century, and is now used by many businesses and websites. Rather than selling products individually, a subscription offers periodic (monthly, yearly, or seasonal) use or access to a product or service, or, in the case of performance-oriented organisations 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 can 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, and pharmaceuticals, as well as the traditional newspapers, magazines, and academic journals.
The direct-to-customer subscription model has become very popular with consumer product brands selling personal items such as razor blades, mattresses, health and beauty products, and food and store cupboard essentials.
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-authorised 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 a first tier of content is free, but access to premium features (for example, game power-ups or article archives) is limited to paying subscribers.