What is Subscription Economy?
Definition
The economic shift from one-time purchases to recurring subscription-based business models across industries.
Understanding Subscription Economy
The subscription economy refers to the massive shift across industries toward subscription models. Pioneered by software (SaaS), it has spread to media (Netflix, Spotify), food (meal kits), fashion (Rent the Runway), automotive (car subscriptions), and even hardware (iPhone Upgrade Program). The subscription economy has grown over 400% in the last decade.
Drivers include consumer preference for access over ownership, lower barrier to entry, and predictable revenue for businesses. The challenge for consumers is managing the cumulative cost across an ever-growing number of subscription services.
Related Terms
SaaS
Software as a Service — a software distribution model where applications are hosted in the cloud and accessed via subscription rather than installed locally.
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.
Recurring Billing
An automatic payment system that charges a customer at predetermined intervals for ongoing access to a product or service.
Subscription Fatigue
The feeling of being overwhelmed by the number of active subscriptions and the cumulative cost of maintaining them.