What is Price Discrimination?
Definition
The practice of charging different prices to different customer segments for essentially the same subscription service.
Understanding Price Discrimination
Price discrimination in subscriptions is legal and widespread. It takes several forms: regional pricing (lower prices in developing markets), student discounts, family plans, startup pricing (reduced rates for small companies), and enterprise custom pricing. Services like Spotify charge different rates in different countries based on purchasing power.
Some SaaS tools offer significant discounts to startups (AWS credits, Notion's startup plan). For consumers, understanding price discrimination means checking for available discounts — student status, company size, geographic location, and even the device you use to visit the pricing page can affect what price you see.
Related Terms
Pricing Model
The strategy a subscription service uses to structure its pricing, including flat-rate, tiered, usage-based, or hybrid approaches.
Student Discount
A reduced subscription price offered to enrolled students, typically requiring verification of active student status.
Tiered Pricing
A pricing strategy where a service offers multiple plan levels with different feature sets and price points to serve different customer segments.
Discount Code
A promotional code that provides a reduced price or additional benefits when subscribing to a service.