The Best Examples Of Subscription Business Models

We’re now in the midst of the “As a Service” revolution, and subscription business models present an enormous opportunity for businesses. Take a look at some of the top subscription business models.

Subscription-based business models are everywhere these days, from dog food deliveries that show up on your doorstep every month, to television streaming services that serve up your favorite shows.

The trend toward thoughtful subscription-based services and products is all about moving from the traditional business model – where the customer buys on an “as-needed” basis – to one where they sign up to receive the product or service on a regular basis.

Customers save time with convenient auto-renewals that take tasks off their to-do lists. Businesses generate predictable revenue and higher customer engagement as long as they provide ongoing value from their subscriptions.

What Is a Subscription Business?

In a subscription business model, customers pay a fee on a regular basis to get access to your product or service. Netflix and Spotify are both great examples of subscriptions businesses.

Subscription services mean you have a continuous agreement with your client, and they agree to pay for access to your products or services for a specific period of time, like every month or year. Customers also have the option to cancel their agreements with your company.

This model is part of a wider trend in the business world called the "membership economy," where consumers want “access” over “ownership.” For instance, Spotify members aren’t interested in owning compact discs or digital files from their favorite artists – what they want is access to Spotify’s streaming service so they can play their favorite music at any time, from any device, anywhere they want.

In the future, we’ll hardly own anything at all. Access to phones, music, clothes, cars, housing, and even the roads that we drive on will all be offered as a service.

This creates enormous opportunities for businesses. Research from Zuora showed subscription businesses achieved five times faster revenue growth than the S&P 500.

The Best Examples of Subscription Businesses

• ClassPass – members get access to over 30,000 fitness studios around the world, so they can try different classes at a wide range of gyms.
• Apple One – A bundle of Apple’s six most popular services (TV+, Music, Arcade, iCloud+, News+, and Fitness+) for one monthly price.
• Amazon – Your Prime membership gets you access to Amazon’s TV and movie content, and their convenient “Subscribe and Save” will auto-order and deliver items on a set schedule. Imagine having your toilet paper on autoship! Amazon can do it for you.
• Computing as a service – Companies like Oracle, AWS, Azure, Google, IBM, and Salesforce provide access to services like software, infrastructure, networking, and storage. https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-cloud-market-share/
• MonkeyLearn – Looking for an out-of-the box AI service? MonkeyLearn’s AIaaS (AI as a Service) provides a cost-effective, accessible way for companies to harness the power of AI to create better products and services and improve their business processes.
• Mobility as a Service – MaaS goes beyond app-based ridesharing like Uber and Lyft, and provides a new way of thinking about accessible transportation. In today’s modern urban settings, people often combine types of transportation (like bicycle hires, trains, and ridesharing) into a single trip. MaaS will eventually let consumers subscribe to a model where they can combine transportation costs together, rather than paying for separate services.
• Product subscriptions – There are tons of product-based businesses that offer subscription options. Harry’s offers personal grooming products like razors and shaving cream in a membership model. Birchbox delivers the newest makeup products. ButcherBox will send steaks and seafood directly to your door, and StitchFix offers intelligent fashion that combines style with artificial intelligence to select clothes that fit the customer.