What is Subscription Based Pricing Model?

Definition of Subscription-Based Pricing Model

Subscription based pricing model can be defined as a pricing model for which consumers have to pay a certain fee to use a certain service over a particular period of time and avail access to that service. The fee charged for may vary according to the type of services and features requested by the user. The amount for the subscription can be acquired through credit card or other electronic payment mechanism.

Brief Description of Subscription Based Pricing Model

Subscription based pricing model refers to a pricing structure that enables users to subscribe to a particular services that includes a particular fee called the membership fee or the subscription fee. This payment mechanism was introduced by magazines and newspapers, which is now used by various business and websites. Apart from websites and  newspapers etc. , this model is adopted by ISPs, cable televisions, cell phone companies etc. Following are some of the advantages of the subscription based pricing model:

 

• It provides increased markets
• Enables easier market penetration
• The service or the product is used rather than sold.
• Convenient for consumers

The model provides users with a clear plan and policy that is comprehensive and is easily understood by the consumer.