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What is media? DefinitiWhat is a Subscription?

A subscription is a signed agreement between a supplier and customer that the customer will receive and provide payment for regular products or services, usually for a one-year period.

A subscription is a relatively new business model by which a customer agrees to pay the company for products or services throughout a specified time-period. For example, the customer may agree to purchase a one-year subscription to a magazine which he receives on a regular basis (monthly, weekly, etc.). The customer may pay the entire sum upfront, or he will pay on a monthly basis. The payment is usually applied automatically, and therefore the customer will need a credit or debit card and agree to be charged.

The subscription model can be applied for various businesses, including:

magazines and newspapers
Software as a Service (SaaS) businesses
gift packages
membership (club, gym, etc.)
and any business that provides recurring products or services


The company also offers support for subscriptions in Instant Articles, and as part of its broader efforts to fund journalism, Facebook also launched a Local News Subscription Accelerator.

FACEBOOK TESTS LINKING YOUR FB ACCOUNT TO YOUR NEWS SUBSCRIPTIONS|ANTHONY HA|AUGUST 28, 2020|TECHCRUNCH Apple takes only a 15% cut from the subscriptions that Amazon Prime Video signs up through the Apple App Store.

PUBLISHERS COULD SOON HAVE MORE LEVERAGE TO FORCE APPLE TO RELAX ITS ‘MY WAY OR THE HIGHWAY’ APPROACH|LARA O'REILLY|AUGUST 25, 2020|DIGIDAY Circulation and subscription revenue rose 6% — with subscriptions to The Wall Street Journal growing 15% to nearly 3 million — while ad revenue declined 28%.

HOW THE WORLD’S BIGGEST MEDIA COMPANIES FARED THROUGH THE ONGOING CRISIS IN Q2|LARA O'REILLY|AUGUST 12, 2020|DIGIDAY He thinks some people may want to eventually pay for a subscription but it’s free for August.

A subscription is an arrangement whereby goods, services or stock are sold periodically rather than individually.

If your business offer subscriptions, you can use recurring invoices to automate your billing process.

Most subscriptions require customers to sign some form of contract or to agree to set terms and conditions. These terms and conditions may outline the length of the subscription, a renewal procedure, cancellation policy, payment terms, and usage or quantity limits.

Types of subscriptions

Although the subscription business model was initially used by magazines and newspapers, it’s now common across many sectors and markets. Since the subscription model was picked up by other types of organisations, the way subscriptions are managed has diversified.

Some of the different types of subscriptions include:

Fixed usage subscription

The fixed usage subscription model offers a set price for a fixed quantity of goods or services over a set time frame.

For example, magazine subscriptions are often offered on a fixed subscription – a customer pays a set amount upfront to receive a magazine at regular intervals, usually weekly or monthly, over a specific period of time.

Unlimited usage subscription

The unlimited usage subscription model offers a set price for unlimited access to a good or service.

The usage can be personal – for example, a gym membership which gives the member unlimited access to gym facilities – or transferrable, such as a phone contract subscription which offers unlimited calls and texts to an entire family across several devices.


Also known as the convenience model or no-commitment billing, this model enables customers to purchase products or services periodically without any long-term commitment. Customers can cancel their subscription at any time.

The pay-as-you-go-subscription model has been popularised by subscription ‘beauty boxes’ and similar services, whereby customers pay monthly and in return receive a monthly delivery of beauty products.

Freemium model

Commonly used by websites and cloud service providers, the freemium model offers access to limited levels of content for free, but only offers additional content or premium features to paying subscribers.

For example, some music streaming services offer freemium subscriptions – whereas any user can stream music online, only paying customers are able to save playlists and listen offline.

Benefits of the subscription model

The subscription model has benefits for both the businesses using the model and the customers purchasing the subscription.

Benefits for businesses include:

Predictable revenue: whilst customers can end their subscription, the terms and conditions and a fixed price enable businesses to more accurately predict revenue and income, therefore making it easier to plan ahead financially.

Customer loyalty: the subscription model has also proven to increase average customer lifetime value (ACLV) through creating opportunities for upselling and cross-selling different products or services.

Subscription benefits for customers include: Convenience: rather than making multiple payments, a customer can set up a one-off transaction.
Cost: subscription services can be more cost-effective than non-recurring models, and customers avoid the bank charges/transaction fees which could incur with multiple one-off payments.

Stock subscription

A stock subscription is a contract or legal agreement whereby an investor purchases shares of company stock on a regular basis over a specified period of time. Stock subscriptions are usually offered to the company’s management and employees, often without brokerage fees or commissions.

For the employee, this reduced price is a good deal and gives them financial interest in the company. For the business, stock subscriptions reduce staff turnover by giving employees an incentive and motivation to stay with the company. It also represents a steady, yet often modest, cash inflow.

Subscriptions and invoicing

If you offer subscriptions or have customers who make regular, repeat purchases, recurring invoicing automates the process of creating and sending invoices, making it easier to bill your customer and get paid.