Business

Netflix's 4Q subscribers surge, long-time CEO passes baton

Netflix's subscriber growth is surging again, providing an early sign that its shift to include ads in a cheaper version of its video streaming service is helping to combat tougher competition and attract cost-conscious customers ...

Subscription business model

The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites. Rather than selling products individually, a subscription sells periodic (monthly or yearly or seasonal) use or access to a product or service, or, in the case of such non-profit organizations as opera companies or symphony orchestras, it sells tickets to the entire run of 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. It is used for anything where a user is tracked in both a subscribed, and an unsubscribed status. Membership fees to some types of organizations, such as trade unions, are also known as subscriptions.

Industries that use this model include book clubs, record clubs, telephone companies, cable television providers, cell phone companies, internet providers, pay-TV channels, software providers, business solutions providers, financial services firms, fitness clubs, and pharmaceuticals, as well as the traditional newspapers and magazines.

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-authorized charge to a credit card or a checking account.

A common model on web sites, colloquially becoming known as the freemium model, is to provide content for free, but restrict access to premium features (for example, archives) to paying subscribers. In this case, the subscriber-only content is said to be behind a paywall. The razor and blades business model (also called the bait and hook model) is an attempt to approximate the subscription model, but with a formal agreement by both parties.

This text uses material from Wikipedia, licensed under CC BY-SA