What is Subscription? Types of SaaS Models

It’s a business where a customer pays a reoccurring fee to access a product is called a subscription service. There are many different types of subscriptions, including software as a service (SaaS), media streaming, and online storage.

Subscribers to your content or service can access that material or service for a much lower price than they would if they paid an up-front fee. And as someone who creates content, it’s a sustainable way for me to continue doing the things I love while also getting compensated fairly for my work!

The definition

In the business world, subscriptions are essentially a contract between a business and its customers. The provider may be a software developer, a music streaming service, a magazine publisher, or any other type of business that offers access to digital content or services on a recurring basis.

An example? When you subscribe to a publication, you typically pay a subscription fee and the publisher agrees to send copies of that magazine or paper to you until your sub expires.

Types of Subscriptions

The “subscription model” was originally used for newspapers and magazines, but is now used by many different sectors and industries.

The adoption of the subscription services business model by other industries has led to the development of various ways to manage subscriptions.

Here are some examples of how subscriptions work.

A subscription service is when you sell products to customers regularly.

For businesses offering subscription-based services, using a recurring invoice system can save you time and ensures that your customers are billed accurately and on time.

Most subscription-based services require you to sign a contract or agree to a set of terms.

These terms & conditions include the length of your subscription, the cancellation and refund policy, your payment options, and any limits on the number of services you can use.

1. Fixed Usage Subscription

The fixed subscription model is a business model where a customer pays a set price for several products or services over a time period.

A subscription to a magazine means that the subscriber will pay a certain amount to receive it regularly. This is usually a weekly or monthly publication, and it will continue for a certain period.

2. Unlimited Usage Subscription

The unlimited pricing plan offers a flat fee for access to a product or service.

Usage can be both personal and transferable, such as a gym membership that gives the subscriber access to all the facilities and classes, or a subscription phone plan that offers the same benefits across an entire family.

3. Pay-As-You-Go Subscription

Known as the no commitment or pay-as-you-go business model, this allows customers to only pay for the things they use. They don’t have to commit to anything long-term and can stop using the service whenever they want.

The ‘pay as you go’ subscription service has been popular with beauty box subscriptions, where users pay for a monthly delivery of beauty products.

4. Freemium Subscription

The freemium business model, commonly employed by websites, allows visitors to access basic services at no cost, but requires them to pay for more advanced or exclusive options.

Some services, like Spotify, offer free trials where users can listen to music online for free. However, only paying subscribers can save their playlists and listen to them when they don’t have an internet connection.


The subscription model is a great way for businesses to provide affordable access to quality content or services. For content creators, it’s a sustainable way to continue doing the things they love while also getting compensated fairly for their work.

You may also like…