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.
The first UK subscription newsletter was the London Property Letter launched in the early 1960s by Sylvester Stein, previously editor of South Africa's Drum magazine. The London Property Letter utilized the standing order payment where the subscriber signed up for a continuous annual payment from his or her bank account. Around the same time, the Consumer's Association launched Which? magazine using the same standing order techniques.
In 1982, Running magazine was launched by Sylvester Stein to cater for the new jogging and running craze that had arrived from the USA. The standing order subscription model was adapted for use on this and other consumer news trade magazines by Peter Hobday, appointed publishing director of Running magazine by Sylvester Stein in 1982. Peter Hobday increased the subscription sales of Running Magazine to become the highest circulation title the athletics field. Running magazine eventually evolved into Runner's World.
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 unsubscribed status.
Membership fees to some types of organizations, such as trade unions, are also known as subscriptions.
Industries that use this model include mail order book sales clubs and music sales clubs, cable television, satellite television providers with pay-TV channels, satellite radio, telephone companies, cell phone companies, internet providers, 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. In the U.S., recurring card charges must be disclosed in writing to the cardholder at least 10 days before each charge.[1]
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.
Types of subscriptions
Effect on the vendor
Effect on the customer
Effect on the environment Read more...
Today's Business Tip
Next business tip >>
**********************
"It takes your enemy and your friend, working together, to hurt you to the heart: the one to slander you and the other to get the news to you". Mark Twain (1835-1910)
Please support our campaign
Next business tip >>
| LOAN CALCULATOR WITH PAYMENT SCHEDULE GENERATOR
More calculators
Compound Interest Calculator Percentage of Gain (or loss) Calculator Length Unit Converter Body Mass Index (BMI) Calculator |
USEFUL LINKS Business Articles - Business Dictionary - Economics Dictionary - Encyclopedia - Free Dictionaries - Health Corner: A to Z - Post a Free Ad - Classifieds - Mortgage & Loans Calculators - Country Currency Finder - Small Business Ideas - Business & Finance Tips - Business Links - Events Calendar - Post an Event - New York State Quiz - G8 Countries/World Maps The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved. Events such as the Great Depression were major factors leading to changes in the system.[5] Its duties today, according to official Federal Reserve documentation, are to conduct the nation's monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous other private U.S. member banks and various advisory councils. This division of responsibilities of the central bank falls into several separate and independent parts, some private and some public. The result is a structure that is considered unique among central banks. It is also unusual in that an entity (the U.S. Department of the Treasury) outside of the central bank creates the currency used. According to the board of governors of the Federal Reserve, "It is not 'owned' by anyone and is 'not a private, profit-making institution'. Instead, it is an independent entity within the government, having both public purposes and private aspects." The U.S. Government does not own shares in the Federal Reserve System or any of its component banks, but the Government does receive all of the system's annual profits after a statutory dividend of 6% on member banks' capital investment is paid and an account surplus is maintained. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. The Federal Reserve transferred a record amount of $45 billion to the U.S. Treasury in 2009. Purpose The primary motivation for creating the Federal Reserve System was to address banking panics. Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial Read more... |
Loading...
Loading...
