What is a subscription? According to Merriam-Webster, a subscription is “an arrangement for providing, receiving, or making use or something of a continuing or periodic nature on a prepayment plan.”

We’ll translate. You start a subscription when you agree to pay a set fee regularly for something, whether that be a magazine, music, or video games. In return, you get a magazine every month, the ability to organize your playlists, or access to the latest weapons to crush your opponents.

You can also subscribe to goods and services (like boxes!), a personal physician that makes house calls, or delivery of a product you regularly use (like diapers).

These days, you can subscribe to just about anything.

Subscriptions are not a new thing

The subscription payment method is a lot older than anyone realizes. As a business model, subscriptions date back to the seventeenth and eighteenth centuries. Back then, it was a little different. Subscribers were actually paying for help promoting books. But from that initial model, modern-day subscription services were born.

For a long time, subscriptions were only for magazines and newspapers. There were a few other subscription businesses that delivered something other than news and gossip.

Harry and David’s Fruit of the Month Club is probably the most famous. For a subscription fee, you could have the fruit of the month (apples, pears, grapefruit, etc.), delivered right to your door.

With the dawn of the digital age, subscription services exploded. Convenience, the ability to try new things with little to no risk, and multiple methods to pay for a subscription, are just some of the reasons why you see so many retailers offering you a subscription.

Subscription form opened in tablet

​image via Pixabay

Not all subscriptions are the same

While subscription services may seem like a good idea, be aware that not all subscriptions are the same. As you search for the answer to what is a subscription, you’re going to discover that there are many different types of subscriptions. Some are perfect for you and others not so much.

It’s not as simple as saying “What is a subscription? It’s something you subscribe to.” You also need to know what kind of subscription you’re signing up for.


Pay for something, get it regularly

A fixed subscription is the oldest subscription model. You pay a set price for a set amount of goods or services for a set period.

Magazine and newspaper subscriptions fit this description perfectly. When you subscribe to a magazine, you pay a certain amount per issue, and, in return, you get one magazine a month.

This model isn’t just limited to magazines. If, for example, you run a blog, you might pay for one year of hosting services at a set monthly or yearly rate. It’s the same thing. You pay a specific dollar amount and get a particular service in return for a set time.


Everything all the time

An unlimited access subscription is exactly what it sounds like. You pay a set fee and get unlimited access to whatever it is you’re paying for. An excellent example of this is Amazon Prime.

For one price you get unlimited free shipping, access to their streaming content, and a few other perks only available to Prime members.

Just like the fixed model, an unlimited access subscription is usually only good for a limited time (like one year for Prime). Then you have to renew your subscription or lose your unlimited access.

Picking and choosing

Several box services use a pay-as-you-go model. Unlike unlimited or fixed subscriptions, pay-as-you-go subscriptions offer you the convenience of a subscription without the recurring monthly fee.

For example, some beauty and fashion boxes only require you sign up with an email address and shipping address to get started. You might also include a credit card to keep on file, but that’s for your convenience.

You won’t be charged a dime unless you order something. Once you place an order, you’ll get all the benefits of the subscription. But, you only pay for the one box you’ve ordered. No monthly subscription fees required!


Kind of free, kind of not

This is known as the freemium subscription model. Many online games use this subscription model.

You can download almost any game and start playing with just a username or email address. As you start playing, you figure out how to play, and advance a level or two.

But, you soon discover you could move ahead faster if only you had the Orb of Doom or the Super Awesome Special Sword Plus Eleven. You can battle it out and try to win said special object.

Or, you could purchase it with real money.

That’s what a freemium subscription is. Everything is technically free. But, if you want to get ahead faster (or have better abilities or more control), you have to pay for it.


Premium

Like a freemium subscription, a premium subscription can start as a free subscription. A streaming music service usually begins as a free app. You plug in your email, set up some genres and start listening. With the basic subscription, you can like and dislike songs, but that’s about it.

However, if you upgrade to a premium subscription, you can select which songs you want to hear and when, skip all the songs you want, and so on. Once you’ve paid for the premium service, it’s yours to keep as long as you keep renewing the premium subscription.

subscribe button in a tablet

​image via Pixaba​​y

How Do Subscriptions Work?

For consumers, subscriptions are pretty straightforward. You pay money, and you get the goods, service, or special privileges. As long as you keep paying, you can access the benefits.

You generally sign up with a credit card, although some companies will accept other forms of payment. Many companies will give you an option to pay monthly or yearly.

In a monthly subscription, you’re billed once a month on whatever day you started the subscription. Billing will be monthly or even annually. At the end of the month or year, you will need to renew your subscription.

Conversely, the subscription may continue indefinitely until you cancel with the company. Check the terms and understand how renewal and cancellation work before you sign up.

You can also opt for a “term” subscription. As an example, you can pay for a full year up-front, instead of being billed monthly. In many cases, the company will offer you an incentive for you to pay in full up front (like a free month or a lower overall monthly rate).

Just like the monthly option, your yearly (or multi-year if you choose) plan may or may not automatically renew on your anniversary date, so make sure you know what you’re getting before you hit “submit.”

Subscription Pros and Cons

young lady with subscribe animation

image via Giphy

If you decide to subscribe to something, the most important thing to do is understand the terms and conditions. No one likes reading those.

However, when it comes to subscriptions, the terms and conditions will help you understand what you are getting, how and when you can cancel, and what you should do if you aren’t happy with the subscription.

When you shouldn’t subscribe

If you crunch the numbers, you may discover that what you’re paying in subscriptions fees aren’t worth it. For example, if you’re paying for unlimited access for a music service but never listen to the music, you’re wasting your money. Instead, you could spend that money purchasing the few songs you do listen to every once in a while.

Or, if you’re paying for a good to be delivered to you every month and you never use it, that’s also a waste of money.

Sometimes you forget about the service or product and never use it, but are still paying the monthly fee. Lapsed gym membership, anyone? If you never go to the gym but still pay a fee to “use” it, see about canceling it. Or, of course, you could start using the membership.


​When you should subscribe

I hate meal planning, which is odd because I love to cook. But, if I’m going to cook, I need to plan. So, I subscribe to a meal planning service. It’s just the recipes, not the food.

Every penny I spend on that service is worth it to me.

Why?

The amount of time I save myself meal planning every week is worth it. No dollar amount can compare to what I save in terms of time and headaches every week.

Could I do the planning myself? Sure. Would I want to tear out my hair and order pizza every night if I did? Yes. And that’s why I keep renewing. There’s only so much pizza I can take.

Subscribing to something that makes your life better isn’t just about convenience (though there is that). It’s about getting real value out of the product or service — however you define it. If you have that, then a subscription is probably the right choice for you.

Before You Click “Sign Me Up”

Now that you know the answer to what is a subscription (and in some ways, what is a subscription service) you’re ready to figure out what subscriptions are right for you. And, which ones are wrong for you.

There’s nothing wrong with trying a few out and hating them, as long as you remember to cancel. And, if it turns out you love it, great! You’ve found a great new product or service you’ll use for years to come.

What’s your experience with subscriptions? Do you love them? Hate them? Have stories to share? Let us know in the comments!

​Featured image via Pixabay

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