There’s a common distinction made between subscription models that I’m sure you will have heard before: does the subscription offer the customer access to content or a recurring service?
This categorization adequately separates many popular subscription models, but it’s not the full picture. There are plenty of articles listing various categories of subscription models, and there’s so much overlap that things can get confusing. It’s difficult to neatly divide subscription models into groups with fine lines, as this post will demonstrate, and this isn’t a drawback; loosening definition boundaries is the first step to creating a custom subscription model, which can be beneficial to your business.
A quick look into subscription models
Consider Spotify: a music streaming service that primarily offers access to a huge collection of music to stream instantly. Clearly this is an access-to-content model, right? Absolutely, but that doesn’t stop it from fitting the bill of a recurring service as well. Spotify doesn’t just let you access a huge database of music and podcasts, it also provides infrastructure allowing you to stream and download content.
It allows you to create playlists of content to share with other users. Its algorithms learn your music tastes and aid the discovery of new music. All of these are services that users come to rely on; they come for the content and stay for the services.
The requirements for the access-to-content subscription model depend heavily on whether or not the content offered is exclusive. If so, the exclusivity is usually the main selling point since consumers who crave your content have two choices: subscribe or miss out!
Consider Disney+, Disney’s video streaming service: their content is 100% exclusive, so it makes sense as to why this is the main selling point as Disney wants to enroll everyone who loves their content enough to pay for it. Even here, though, the ability to stream and download all content on a multitude of platforms is a service that Disney must maintain to uphold convenience and reliability.
Without a vast library of exclusive content, an access-to-content subscription provider simply can’t rely on their content as their only selling point. Non-exclusive content implies that competitors exist that offer a lot of the same content, meaning that many consumers will constantly consider the other options. It’s imperative that staying with the current service is a customer’s best choice as much of the time as possible. In Spotify’s case, for example, this is done partially through social elements such as curated playlists and collaborative playlist creation. This is on top of keeping customers reliant on their personal music collections and playlists that exist only on their Spotify accounts; no customer wants to go through the process of transferring to a different service!
What about software as a service (SaaS)? Isn’t it in the name?
Certainly, but the distinctions become blurred at various points here too. Take Adobe Creative Cloud for example: despite requiring a monthly payment to use their software, each program requires local installation to use, just as a standalone, one-time-purchase program would; this can easily be interpreted as requiring recurring payment simply to access their content, which in this case is software. On the other hand, the subscription is supplemented by accessibility across multiple platforms and devices at the same time, fully automatic updates, and a hefty customer support infrastructure. In general, SaaS doesn’t require that software is located remotely, meaning that in a lot of cases the customer is paying for access to the software as well as the services that come alongside it.
Moving away from software for a moment, we can take a peek at subscription box businesses. Typically these provide a regular physical delivery of various items, and the box contents are usually curated to some extent by the business; the customer doesn’t choose exactly what they receive every time. These are undoubtedly a service, as can be seen with both the hassle-free delivery aspect and the curation of the contents of the box by the business, but ultimately the model would be nothing without the product itself – the box contents. The quality, uniqueness, and exclusivity of the contents are strong contributors to the success of a model like this.
The point of deliberating over subscription model categories like this is to illustrate that subscription models are fluid. Categorization is undoubtedly useful – not just in the subscription model scene – but your subscription model doesn’t need to neatly fit a category.
Instead of focusing on choosing the right kind of subscription model, focus on what your business needs and design a subscription model based around those needs.
The purpose of a subscription model is to serve your business and your business only, so why not tailor your subscription model to fit that purpose as well as it can? Billforward’s platform offers you the tools necessary to easily implement the billing infrastructure of your customized subscription model and monitor its success.
Finally, direct your efforts not into figuring out what type of subscription model you have designed but what boxes it needs to check to succeed. Consider thoroughly what customers will expect from your subscription model and ensure you exceed those expectations.