Business Models and Architecture

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The subscription business model

The subscription business model is a business model that has traditionally been used by magazines and record clubs, but is increasingly being used by other businesses. Rather than selling products individually, a subscription sells periodic (monthly or yearly) use or access of a product or service. Thus a one-time sale of a product becomes a recurring sale.

In addition to magazines, book clubs, and record clubs, many other industries are using the subscription model. They include telephone companies, newspapers, cable television providers, cell phone companies, internet providers, pay-TV channels, software providers, business solutions providers, and financial services firms.

A discount pass is a form of subscription. There are passes for public transport, swimming pools, zoos, etc.

Renewal of a subscription may be automatic periodic where the cost of a new period is automatically paid for by a pre-authorized charge to a credit card or a checking account.
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