What do Adobe, Netflix, and Dollar Shave Club have in common? They are all subscriptions. Subscriptions are the greatest thing to ever hit business in the opinion of this author. Subscriptions, particularly ones without cancellation fees are my favorite. I love to be able to subscribe to something monthly, or yearly, and be able to get that product at a cheaper overall price, not to mention everything that those subscriptions offer. Knowing that I love these subscriptions so much, I wanted to dig into it a little bit more. (Also, this is a required blog for my Marketing Class :-D)

What is an Online Subscription Business Model?

It's actually very straightforward, and most of you won't even need an explanation. A Subscription business model means that instead of your customers paying for products, services, or other goods directly, they pay a subscription fee based on a schedule that the company develops. Most of the time these are either monthly or yearly.

The biggest one that everyone knows is Netflix. You pay monthly for their service and you have access to everything they offer. Depending on how much you pay, you get more benefits. Family members, DVD orders (if you're still into that), and other benefits of paying more, or paying less depending on what you want.

The classic subscription model is that of newspapers and magazines. Remember? Those printed words that you physically have to flip the page to read? Well that's all an online subscription model is. You pay for a service or product on a schedule, and if you stop paying, you stop receiving. The greatest part about this is that if you don't have the money one month, you can pause your subscription and the next month once you get some cash, you can start it back up again.

The Growing Model of "Freemium Content"

Freemium is a new model that is starting to grow more rapidly. It is a form of the subscription model. Instead of just being a subscription to the content or products, and having to pay for that, the freemium model starts with free content. Not just a trial like Netflix or other services. Instead, they give you some free stuff. Maybe they give you a level of a game, but to play the rest you have to subscribe. Maybe they give out 1 thing for free every month, but if you pay a premium, (free + premium = freemium), you have access to 10 items every month. This is something that is very popular on mobile. Lots of newspapers and magazines will give you access to a couple readings a month, or a couple articles, but you have to pay money to be able to read the entire paper, or more than the given number of posts.

Via: itproportal.com — Via: itproportal.com

However, this model cannot be confused with a regular subscription model that may provide a free trial or a demo. Freemium content will always have a paid option and a free option. Even something as simple as a mobile app being ad-free because you pay for it, would be considered freemium. The free version is ad based, and the premium version is paid and and ad-free.

I read an article from Entrepreneur Magazine, that got me even more excited. I have 10. yes 10. monthly subscriptions. Some of them are for work related things, i.e. Dropbox, and Adobe CC, but most of them are just things to keep me from having to do things. My favorite subscription is to ShortPar4. If you know me, you know I like clothes, and I like golf clothes the most! ShortPar4 is a subscription that sends me golf clothes every month. Usually three items, and they are about $150 total in value, and with the style of clothing I chose, I have liked what I have received so far. I have another "subscription" to actually play golf. This is technically called a membership, but that is really just another word for subscription. I pay a monthly fee at a local course near me and I am able to go as much as I want and hit range balls, and get a discount on golf. With the amount of practice that I do, and the amount of golf that I play, I cover the monthly fee every month. And not just every month, but I cover the fee in a matter of 4 days.

Subscriptions are awesome. With more and more companies changing their style, and allowing customers to control their content, goods, and finances, customers are happier and companies are growing. I am very excited to see where subscriptions go, and can't wait to hopefully offer similar products in the future.