Browse Definitions :
Definition

subscription economy

Contributor(s): Matthew Haughn

A subscription economy is a model for trade of desired content, products and services in exchange for recurring, scheduled payments. Businesses offer subscription-modeled services in an effort to get a reliable customer base to and to better manage revenue. In exchange, businesses generally offer a discount or a claimed savings over individual sales of content, products or a service.

Subscriptions are familiar in many offerings, such as in print through magazines, newspapers and online content. Netflix is one of the most well-known examples of subscription based online content services. VMware, SalesForce and many other cloud services are subscription based, while other software offerings such as Adobe Photoshop have more recently moved to subscriptions. Physical products are also using subscription-based services, such as the leasing of cars and hardware-as-a-service (HaaS).

As the subscription economy expands, the preference for these services could be explained by cost. For example, leasing a car with no down payment may be more affordable than the initial cost of ownership. The maintenance requirements that come with ownership can also be a deterring factor. Other types of subscription models offer different tiers depending on a user’s needs and the ability to pause or cancel at any time.

The subscription-based economy involves trust as Netflix learned when it decided to change its subscription model in 2011. Though ultimately successful, the online entertainment vendor lost 800,000 subscribers when it made changes to its subscription models and increased its prices.

This was last updated in July 2019

Continue Reading About subscription economy

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

SearchCompliance

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

  • PCI DSS (Payment Card Industry Data Security Standard)

    The Payment Card Industry Data Security Standard (PCI DSS) is a widely accepted set of policies and procedures intended to ...

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

SearchSecurity

  • tokenization

    Tokenization is the process of replacing sensitive data with unique identification symbols that retain all the essential ...

  • incident response

    Incident response is an organized approach to addressing and managing the aftermath of a security breach or cyberattack, also ...

  • Federal Information Security Management Act (FISMA)

    The Federal Information Security Management Act (FISMA) is United States legislation that defines a framework of guidelines and ...

SearchHealthIT

SearchDisasterRecovery

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

  • cloud disaster recovery (cloud DR)

    Cloud disaster recovery (cloud DR) is a combination of strategies and services intended to back up data, applications and other ...

SearchStorage

Close