MIT Sloan Management Review Article on New Threats to the Subscription Model

Subscriptions have all the hallmarks of a can’t-miss revenue model. Customers love how they lower their barriers to access, while companies embrace their simplicity and ease of communication. Investors prize them because they generate more predictable long-term revenue flows than conventional one-off transaction models.

Proponents of the so-called subscription economy — a term coined by the CEO of platform provider Zuora — argue that customers are better served by subscription experiences built around services than by static offerings or a single product. Software giant SAP asserts that a subscription model shortens time to market and speeds delivery of services to customers, in addition to accelerating cash collection and enabling businesses to define and modify pricing models.

About the Author

Oded Koenigsberg is a professor of marketing at London Business School. He is coauthor (with Marco Bertini) of The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value (MIT Press, 2020).

Learn more about MIT SMR.