According to Google, the definition of a subscription service is as follows: “Subscription business models are based on the idea of selling a product or service to receive monthly or yearly recurring subscription revenue.” Businesses that use a subscription service model are more geared toward customer retention rather than customer acquisition.
With companies like Netflix and Spotify, optimizing the subscription business model, other companies are starting to follow suit in different markets. In the past year, Cadillac introduced a subscription business model for their cars. The idea being that you would pay monthly to use a car and receive maintenance luxuries and other features. Now Ford, Porsche, and Volvo are introducing their own subscription models for their customers to choose from. Personally, I am skeptical of how successful this business model will be for cars, Netflix and Spotify (Netflix especially) revolutionized their industries by allowing the consumer to view/listen to content whenever they wanted. Watching TV and listening to music is completely different now and I don’t see the motor industry executing the same success.
What does this mean for Internet Entrepreneurship? I think this will spur more business introducing subscription service option for their products. Movie theaters are one example because they are an industry that is a competitor for Netflix and an industry that is on the downtrend. Aspiring entrepreneurs should also think about what their product or service can be under a subscription business model because the internet makes this form of purchase very accessible.