What Are Different Types of Subscriptions In Business (2025)

April 28, 2025
3:12 am

6 min read

Regardless of your industry, with various types of subscription models available, adding one to your business can be a game-changer. It transforms single transactions into continuous engagement, offering long-term value for both you and your customers.

For businesses, it brings more predictable income and valuable insights from recurring user behaviour. For customers, it’s all about convenience, savings, and a smoother experience. Subscriptions create a powerful foundation for building loyal, lasting connections with your audience.

Subscriptions aren’t just for magazines anymore. From daily essentials to digital services, OTT platforms they are everywhere. The real win? They

help your brand stay connected with customers not just once, but over time.

In this blog, we’ll break down the different types of subscription, how they work.

What Is Subscriptions

A subscription is a way for people to pay regularly like every week, month, or year to keep using a product or service. Instead of making a one-time purchase, they get ongoing access for as long as they continue paying.

Think about services like Netflix, Spotify, or even an Amazon Prime. You do not have to buy each movie, song, or snack separately. With a subscription, it’s all delivered or made available to you again and again, without extra effort.

For customers, subscriptions are convenient and often save time and money. They do not have to remember to reorder or worry about missing out. Everything comes automatically.

For businesses, subscription models provide a reliable source of recurring revenue, helping to improve financial stability and facilitate better long-term planning.

They also help companies stay connected to their customers, understand what they like, and build stronger relationships over time.

With an estimated market value of $3 trillion in 2025, the subscription business model continues its unstoppable growth trajectory. In simple words, subscriptions make life easier for both the customer and the business and that is why they have become so popular.

What are the Types of Subscriptions

While it plays a key role in the software industry, its impact reaches far beyond. From consumer goods to digital services, nearly every sector has seen successful subscription-based offerings in recent years. Let us explore some of the most common and effective types of subscription businesses in the market today.

Software

Software-as-a-Service (SaaS) has become the most common way software companies operate today. While each company may charge differently, they all depend on steady, recurring income. Around 85% of business apps will be SaaS-based by 2025. The strength of the SaaS model lies in its clear and repeatable path to success.

Unlike more complex industries, growing a SaaS business often comes down to three main steps: creating a valuable product that meets user needs, offering access to that product through a paid subscription, and keeping those users engaged over time so they continue to renew.

Example

An example of a SaaS (Software-as-a-Service) subscription is a cloud storage service. Users pay a monthly or yearly fee to store files, documents, and photos securely online, allowing them to access their data from any device with internet access. If they keep their subscription active, they get unlimited or increased storage, automatic updates, and security features without needing to install or maintain software on their devices.

Here is it works

Company builds software that solves a real problem like helping people design graphics, manage tasks, or store files online.

Instead of buying the software once, users pay a small fee every month or year to keep using it. This is called a subscription.

The company keeps the software updated, fixes issues, and adds new features. This way, users stay happy and continue paying for the service.

Industries it applies to:

SaaS is used across various industries, such as technology with cloud storage and development tools, entertainment with streaming services like Netflix, and education through online learning platforms.

It also applies to business with project management tools, healthcare with telemedicine and fitness apps, and e-commerce with subscription boxes and curated shopping services.

Pros

SaaS offers lower upfront costs, easy access to updates, flexibility for remote use, and scalability for businesses of all sizes.

Cons

Some of the cons of SaaS include dependency on the service provider for uptime and updates, potential data privacy concerns, and the risk of long-term costs adding up as subscription fees continue over time.

Ecommerce

The eCommerce subscription model is a business strategy where customers pay a recurring fee, usually monthly or yearly, to receive products or services on a regular delivery schedule.

This model is commonly used in industries such as food delivery, beauty products, digital media, and curated goods like clothing or snacks. The subscription can offer a variety of products, including curated selections or specific items, depending on the type of business.

By offering convenience, personalized services, or exclusive products, eCommerce subscriptions can foster customer loyalty and encourage repeat purchases.

Example:

An example of an eCommerce subscription model is a service where customers pay $20 per month to receive 10 different snacks delivered to their door. This subscription offers convenience, variety, and a surprise element, allowing customers to try new snacks every month without having to shop for them individually.

How does it work,

Customers can quickly subscribe to a service, selecting the products they want to receive on a regular basis, ensuring a seamless setup.

Products are delivered directly to subscribers on a set schedule, offering a convenient way to try new items without the hassle of shopping.

Each subscription renewal process brings fresh, tailored offerings, ensuring customers continue to receive great value and new experiences with every delivery.

Pros,

The subscription model ensures a steady stream of income, making it easier to forecast revenue and plan for growth.

It strengthens customer relationships by offering consistent value, leading to higher retention and reducing the need for constant new customer acquisition.

Cons,

Users may cancel their memberships at any time, leading to fluctuating revenue and the need to constantly acquire new customers.

Predicting demand and managing stock for regular shipments can be difficult, especially when customer preferences or order volumes change.

3) Boxes Subscription

The box subscription model has grown significantly over the past few decades. It involves customers signing up to receive a regular delivery of products, often curated around a specific theme or interest, like beauty, fitness, or food.

As per McKinsey research, Box subscriptions audience age ranges up to 25 – 44. This demographic represents a key segment of users who actively engage with this model.

This model allows businesses to offer a personalized experience, with new and unique items arriving on a set schedule. Customers benefit from the excitement of discovering new products, often tailored to their preferences, without having to shop for them individually.

The box subscription industry is booming, with expectations to exceed $41.79 billion in the coming years. This growth is driven by the convenience, variety, and surprise element that the model offers, making it popular among consumers who enjoy receiving curated experiences delivered directly to their doorsteps.

Example:

A healthy meal kit subscription is a good example for boxes subscription where customers pay around $50 to $100 per month to receive weekly deliveries of fresh ingredients and easy-to-follow recipes. For example, a plan might include 3 meals per week for two people. It saves time, supports healthy eating, and adds convenience.

How it works,

Customers choose a subscription plan based on how often they want to receive the product and how much they need.

The business prepares a box filled with selected or personalized items and ships it to the customer on a regular schedule, like weekly or monthly.

The customer receives the box at their doorstep, opens it, and uses the products, often looking forward to the next delivery.

Pros,

It gives businesses a steady flow of income every month, which helps them plan better and grow with more confidence.

Customers enjoy the surprise and convenience of getting products delivered regularly, which keeps them excited and more likely to stay subscribed.

Cons,

Some customers may cancel after a few months if they lose interest or feel the products are no longer useful, which can affect the business’s income.

Managing stock and making sure every box is delivered on time can be tricky, especially when customer numbers grow quickly or change often.

Industries that uses,

The box subscription model is used in many industries like health, food, and books. It lets companies send products regularly to customers who enjoy trying new things without shopping every time.

4) Accessibility Subscription

Accessibility subscriptions offer people ongoing access to digital content or physical products instead of owning them. These subscriptions usually work on a monthly or yearly plan, where users pay a set amount to use or enjoy the service for as long as they stay subscribed.

This model is a mix of software and e-commerce because it focuses on giving access rather than delivering a product or selling it one time. It allows businesses to reach more people while making the service affordable and easy to use over time.

Example:

An example of an accessibility subscription is Spotify. For around $9.99 per month, users get access to over 100 million songs without having to buy each one. They can listen anytime, create playlists, and enjoy music without ads. This model gives people a low-cost way to enjoy a huge music library, and it’s part of why Spotify has over 600 million users worldwide.

How it work

Customers pay a fixed monthly or yearly fee to get unlimited access to a wide range of content, like music, movies, or software, as long as their subscription is active.

They can use the service anytime, enjoying all the features without having to buy individual items or pay per use.

The subscription lifecycle happens with help of automation, giving users the option to cancel or adjust their plan whenever they prefer, offering flexibility and convenience.

Pros

Users pay a small, recurring fee to access a wide range of content or services, making it more affordable than purchasing individual items or services.

Subscribers can enjoy the service whenever they want and have the freedom to adjust or cancel their plan according to their preferences.

Cons

Some users may cancel their subscriptions if they feel the content or service is not valuable enough, leading to inconsistent revenue for businesses.

Managing and updating content regularly to keep subscribers engaged can be time-consuming and costly for businesses.

Industries that uses

The accessibility subscription model is used in industries like entertainment for movies and music, software for tools and apps, health and fitness for workout plans, and education for online courses.

5) Pay As You Go (PAYG)

Pay As You Go (PAYG) is a payment model where customers only pay for the services or products they use, rather than committing to a fixed price or subscription. It’s flexible and allows users to control their spending by paying for what they need at any given time.

This system is commonly used for things like utilities, mobile phone services, or cloud storage, where the cost is based on usage rather than a set fee.

With PAYG, customers are not locked into long-term contracts, and they have the freedom to adjust their usage based on their needs.

Example:

Other brands using the Pay As You Go (PAYG) model include Amazon Web Services (AWS)and Google Cloud, where customers pay for the services they use, like storage and computing power, without long-term commitments. This flexible model helps businesses only pay for what they need.

How it works

Customers only pay for the specific services or resources they use, such as storage, computing power, or data transfer. There are no fixed monthly fees or upfront costs.

You can increase or decrease your usage at any time based on your needs. For example, you can scale up resources when demand is high and scale down when you don’t need them.

PAYG services do not lock you into long-term agreements. You can use the service as much or as little as you want, giving you full control over your spending.

Pros

Users will pay only for what you use, helping manage costs and avoid unnecessary spending.

It offers flexibility, letting you scale usage up or down without long-term contracts or fixed fees.

Cons

Costs can become unpredictable if usage spikes unexpectedly, making it harder to budget.

Frequent changes in usage may lead to inconsistent pricing, which could be challenging for some businesses to manage.

Industries that Uses

This model is used in industries like technology, where businesses pay based on usage, and in communications, where services are billed according to consumption. It’s also common in sectors like utilities, where payment

depends on the amount used, as well as in transportation, where charges are based on time or distance.

Benefits Using Subscription Method

Using a subscription method offers several advantages that can benefit both businesses and customers. Below are some of the key benefits of adopting a subscription-based approach.

Steady Revenue Stream

One of the most significant benefits for businesses is the ability to secure a steady and predictable revenue stream. With a subscription method, companies no longer must rely on the uncertainty of one-time purchases. Instead, they can count on recurring payments from customers.

Customer Loyalty

A subscription-based business approach fosters long-term relationships between businesses and customers. Since customers commit to regular payments, businesses can focus on providing continuous value, which often leads to increased satisfaction and loyalty.

Over time, these loyal customers can become brand advocates, helping businesses grow through word-of-mouth referrals.

Moreover, customers are less likely to switch to competitors because they are already accustomed to the service or product being delivered on a regular basis.

Cost Savings for Customers

For customers, subscriptions often come with cost-saving benefits. Many subscription services offer discounts or special deals to those who commit to regular payments, which makes the product or service more affordable in the long run.

For example, paying for a yearly subscription is usually cheaper than paying month-to-month. Subscriptions also eliminate the need for repeated invoicing to the software subscriptions or unexpected price increases, providing a sense of predictability for customers’ budgets.

Convenience and Flexibility

Subscriptions offer unparalleled convenience for customers. Instead of having to remember to reorder products or renew services, customers leverage automation for subscription to ensure they never run out of what they need.

Many subscription models also offer flexibility, allowing customers to adjust their plans, choose different delivery frequencies, or upgrade to premium features.

This flexibility makes it easy for customers to find the right fit for their needs, leading to a more personalized and satisfying experience.

Opportunity for Growth and Upselling

A steady flow of subscribers opens up several opportunities for businesses to introduce new products or services to their customer base. With a captive audience, businesses can strategically offer upsells, upgrades, or additional services, which can increase the value of each customer over time.

Moreover, businesses can gather data from subscribers to understand their preferences and tailor future offerings to meet those needs, further strengthening the relationship and driving additional revenue.

How Revenue 365 Helps Your Business

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Conclusion

In summary, the variety of subscription models available today, such as SaaS, e-commerce, and pay-as-you-go, provides businesses with flexible and scalable ways to engage customers and generate steady revenue. Each model brings its own unique set of benefits, but effective management and optimization are key to long-term success.

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Frequently Asked Questions

What is a subscription type?

A subscription type refers to the specific model or structure a business uses to provide recurring access to a product or service, typically on a regular basis such as weekly, monthly, or annually. Examples include SaaS (Software-as-a-Service), e-commerce subscriptions, and pay-as-you-go models.

How many types of subscriptions are there?

SaaS (Software as a Service)

E-commerce Subscriptions
Subscription Boxes
Access-Based Subscriptions
Pay-as-you-go (PAYG)

How do e-commerce subscriptions work?

E-commerce subscriptions involve customers paying for regular delivery of products, like monthly boxes or subscription-based online shopping services.

Can subscription billing can be customized

Yes, subscription billing can be customized. Businesses can adjust billing frequencies, pricing tiers, payment methods, discounts, trial periods, and cancellation terms to suit their customers’ needs and preferences. This flexibility helps improve customer satisfaction and retention.

What are the best practices for managing subscription billing?

The best practices for managing subscription billing include ensuring transparent pricing, offering flexible billing cycles, providing easy-to-understand terms and conditions, maintaining secure payment methods, and regularly communicating with customers about billing changes or upcoming renewals. Additionally, businesses should automate billing processes to reduce errors, offer seamless cancellation options, and track usage to ensure fair billing.