There are two main subscription models that you might have heard of before: there are subscriptions that offer a customer access to content or a subscription that offers a recurring service.

While this separation highlights two of the most popular subscription models, it doesn’t give the full picture. There are plenty of articles listing various categories of subscription models, but those categories can overlap and it is easy to get confused along the way. That said, it is also difficult to neatly divide subscription models into groups with firm lines between them, however this is not necessarily a drawback! A completely customised subscription business model, may not neatly fit into any of these boxes, but by providing customers exactly what they are looking for, you will be able to stick out amongst the competition.

 

A quick look into subscription models

Consider music streaming services that primarily offer access to a large 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 subscription as well. 
 
Music streaming services don'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 help you to discover 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, exclusivity is usually the main selling point since consumers who crave your content have two choices: subscribe or miss out!

Consider video streaming service with exclusive proprietary content — since this content can not be found elsewhere, it makes sense as to why this becomes a major selling point. These platforms will then be able to enroll everyone who loves their content enough to pay for it. That said, these platforms must be able to uphold the convenience and reliability of their service of being able to stream and download all content on a multitude of platforms.

Without a vast library of exclusive content, an access-to-content subscription provider can’t simply rely on their content as their only selling point. Non-exclusive content implies that there are existing competitors that offer a lot of the same content, meaning that many consumers will constantly consider other options. 

Customers normally prefer to stay with their current service subscription as long as possible, but that depends on what the subscription business can offer them. For some music streaming platforms, this is done in part through social elements such as curated playlists and collaborative playlist creation. This helps to reduce churn by keeping customers reliant on their personal music collections and playlists that exist only on their accounts — no customer wants to go through the process of transferring to a different service!

Woman laying on her couch while listening to music she got from a subscription business

What about software as a service (SaaS)? 

One may think that Software as a Service or SaaS would automatically be classified as a service-based subscription, but that is not always 100% the case. 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 a 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. Generally, SaaS platforms don't require software to be 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, meaning that the customer doesn’t choose exactly what they receive every time. These are undoubtedly a service, as they can be seen with both the hassle-free delivery aspect and the curation of the contents of the box, 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 also when forming the strategy of your subscription business model. That said, when looking at the type of subscription that you plan to offer, it is best to avoid painting yourself into a corner, and stay creative about the structure and type of subscription that you plan to offer.

Happy businessman learning about subscription models

Put your business first

Instead of focusing on choosing the right kind of subscription model, focus on what your business needs and design a subscription business model based on those needs. Do you need to implement recurring billing? Carry out a tiered pricing strategy? Go for it!

The purpose of a subscription model is to serve your business and the needs of your customers, so why not tailor your subscription business model to be the purpose-built solution that you are looking for? Billforward’s billing platform and subscription management software offer you the tools necessary to efficiently implement the billing infrastructure of your customized subscription model, enabling you to manage subscriptions and monitor their success.

It's also best to focus not only on figuring out what type of subscription model you plan to design, but what important elements it needs to succeed. Thoroughly consider what customers expect from your subscription business and ensure you exceed those expectations.

Interested in seeing what Billforward can do for your business? Schedule a short demo with a member of our team to see what Billfroward can do first hand:

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