The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service . The model was pioneered by publishers of books and periodicals in the 17th century, and is now used by many businesses, websites and even pharmaceutical companies in partnership with governments.
62-527: HBO Go was an authenticated video-on-demand streaming service of the pay television network HBO . The service originally allowed subscribers to access HBO's on-demand programming via the HBO website, mobile apps, and digital media players, among other devices, through their television providers. HBO Go was the successor to HBO on Broadband , a service launched in January 2008 exclusively for Time Warner Cable (then
124-496: A TV Everywhere model, or represent a hybrid approach of a service that can be obtained direct-to-consumer or via a television provider (through authentication or promotional offers): The TV Everywhere concept has been met with mixed reception. Some broadcasters were initially hesitant to introduce TV Everywhere services, with concerns that they might affect advertising revenue and not be adequately counted by Nielsen ratings . Songwriters Guild of America president Rick Carnes praised
186-496: A division of HBO parent company Time Warner ) customers in Green Bay and Milwaukee, Wisconsin . HBO on Broadband offered 400 hours of content, including feature films, HBO original movies, specials, and series, at no extra charge for subscribers. Access required both a subscription to HBO and Time Warner Cable's Roadrunner internet service. On February 18, 2010, HBO Go was launched, initially available through Verizon FiOS . Within
248-482: A group stage match between the U.S. and Portugal, at least 1.7 million concurrent viewers were using WatchESPN (though, not all of the viewers were necessarily watching the game). In December 2015, research firm GfK estimated that 53% of the United States' pay television subscribers have used a TV Everywhere service—an increase from 42% in 2012, that overall use had doubled since 2012, and 79% of those surveyed found
310-649: A paid subscription model is being favoured by more publishers who see it as a comparatively stable income stream. In the field of academic publishing , the subscription business model means that articles of a specific journal or conference proceedings are only available to subscribers. Subscriptions are typically sold to universities and other higher education institutions and research institutes , though some academic publishers also sell individual subscriptions or access to individual articles. In contrast with other media such as newspapers , subscription fees to academic publishers generally do not go towards supporting
372-440: A perpetual licensing model to a subscription model, known as " software as a service ". This move has significant implications for sales and customer support organizations. Over time, the need to close large deals decreases, resulting in lower sales costs. However, the size of the customer support organization increases so that the paying customers stay happy. Consumers may find subscriptions convenient if they believe they will buy
434-422: A predictable and constant revenue stream from subscribed individuals for the duration of the subscriber's agreement. Not only does this greatly reduce uncertainty and the riskiness of the enterprise, but it often provides payment in advance (as with magazines, and concert tickets), while allowing customers to become greatly attached to using the service and, therefore, more likely to extend by signing an agreement for
496-924: A product or service , or, in the case of performance-oriented organizations such as opera companies , tickets to the entire run of some set number of (e.g., five to fifteen) scheduled performances for a whole season. Thus, a one-time sale of a product can become a recurring sale and build brand loyalty . Industries that use this model include mail order book sales clubs and music sales clubs, private web mail providers, cable television , satellite television providers with pay television channels, providers with digital catalogs with downloadable music or eBooks, audiobooks, satellite radio , telephone companies , mobile network operators , internet providers, software publishers , websites (e.g., blogging websites), business solutions providers, financial firms, health clubs , lawn mowing and snowplowing services, pharmaceuticals , renting an apartment, property taxes, as well as
558-404: A product regularly and might save money. The customer saves time for repeated delivery of the product or service. Subscriptions which exist to support clubs and organizations call their subscribers "members" and they are given access to a group with similar interests. Subscription pricing can make it easier to pay for expensive items since they can often be paid for over time and thus can make
620-448: A promotional video starring Jane Lynch as her Glee character Sue Sylvester , describing the process as being less painful than waterboarding ), critics and end-users criticized the registration and authentication processes for being frustrating and difficult. In response, providers took steps to improve their user experiences; Disney reported that use of its TV Everywhere services increased after it simply changed its process to use
682-576: A psychological phenomenon may occur when a customer renews a subscription, that may not occur during a one-time transaction: if the buyer is not satisfied with the service, he/she can leave the subscription to expire and find another seller. Because customers may only need or want some of the items received, this can lead to waste and an adverse effect on the environment, depending on the products. Greater volumes of production, greater energy and natural resource consumption , and subsequently greater disposal costs are incurred. Subscription models also create
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#1732847605983744-452: A public beta of its TV Everywhere-based portal, Xfinity Fancast, in December 2009 for all double-play television and internet customers. Afterwards, other providers began to follow suit. In 2010, broadcasters and television providers began a wider roll-out of TV Everywhere-based services; for the 2010 Winter Olympics , NBC Sports offered live and video on-demand access to events throughout
806-419: A set of principles which were "designed to serve as a framework to facilitate deployment of online television content in a way that is consumer friendly, pro-competitive." The concept would enable users of their respective cable television services to access live and on-demand online content from channels that they subscribe to by using an account-based authentication system. TWC CEO Jeffrey Bewkes believed that
868-454: A similar restriction to Fox for "next day" on-demand episodes beginning on January 6, 2014, with seven-day exclusivity for authenticated users and Hulu Plus subscribers. NBC unveiled its own plans for a similar TV Everywhere app to its affiliate board in April 2014. In November 2015, after negotiations surrounding revenue sharing and infrastructural mandates (including a proposed requirement that
930-428: A single purchase. In addition, subscription models increase the possibility of vendor lock-in , which can have fatally business-critical implications for a customer if its business depends on the availability of software: For example, without an online connection to a licensing server to verify the licensing status every once in a while, a software under a subscription-model would typically stop functioning or fall back to
992-761: A sweepstakes to win a trip to London (2012) or Rio de Janeiro (2014). Still, with dissatisfaction with the system and the quality of NBC's overall coverage , there was an increase in the use of virtual private network (VPN) services to access the more comprehensive online coverage of the Games being provided by broadcasters in Canada ( CTV in London, CBC in Sochi) and the United Kingdom ( BBC ), which only used geoblocking and did not require TV Everywhere authentication. In April 2014,
1054-433: Is important to have full access even to old files for decades). Also, consumers may find repeated payments to be onerous. Subscription models often require or allow the business to gather substantial amounts of information from the customer (such as magazine mailing lists), and this raises issues of privacy . A subscription model may benefit the software buyer if it forces the supplier to improve its product. Accordingly,
1116-425: Is limited to paying subscribers. In addition to the freemium model, other subscription pricing variations are gaining traction. For instance, the tiered pricing model is frequently used in software as a service (SaaS) platforms, offering customers different access levels and features based on their subscription tier. This model is particularly effective for tailoring services to customer requirements. Another approach
1178-494: Is the usage-based pricing model, which calculates charges based on the extent of service or product utilization by the customer. This model is becoming increasingly prevalent, especially in services where customer usage varies significantly. There are different categories of subscriptions: In publishing, the subscription model typically involves a paywall , paysite , or other "toll-access" system (named in opposition to open access ). As revenues from digital advertising diminish,
1240-476: The Big Ten Conference , operated in partnership with Fox Sports ) also launched a TV Everywhere service known as BTN2Go . Matt Strauss, Comcast senior vice president of digital and emerging platforms, considered the 2012 Summer Olympics to be a "watershed" event for TV Everywhere services; NBCUniversal announced that a total of nearly 10 million authenticated devices accessed its online coverage during
1302-506: The black market , in order to allow others to view programs without subscribing to the channel. Charter Communications CEO Tom Rutledge, and ESPN's executive vice president for affiliate sales and marketing Justin Connolly, have considered this practice equivalent to piracy . In December 2017, it was reported that television providers and program distributors had begun to implement measures in order to discourage this practice, including reducing
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#17328476059831364-455: The premium cable industry). David Preschlack, ESPN's executive vice president for affiliate sales and marketing, foresaw a future in the model, believing that access to exclusive content would soon play a greater role in competition between high-speed internet providers. However, the model was deemed a violation of the principles of net neutrality by some critics. In 2009, Time Warner Cable announced an initiative known as TV Everywhere ,
1426-470: The 'TV Everywhere' plan, no other program distributors would be able to emerge, and no consumers will be able to 'cut the cord' because they find what they want online. As a result, consumers will be the losers." A 2010 report by Free Press made similar arguments, contending that TV Everywhere was an act of collusion by the cable industry, and arguing that "by tying programming to local cable subscriptions, while denying content to pure online TV distributors,
1488-506: The 2014 Winter Olympics was still significantly large: on February 21, 2014, coverage of the Men's hockey semi-final featuring the U.S. and Canada recorded the largest Live Extra audience in NBC Sports history, with 2.12 million unique viewers, augmenting the average NBCSN television audience of 3.9 million. ESPN's coverage of the 2014 FIFA World Cup drew similarly heavy online viewership: during
1550-636: The Cable & Telecommunications Association for Marketing (CTAM) unveiled an industry-wide initiative for marketing and educating subscribers about TV Everywhere services provided by broadcasters and providers; these efforts include a stylized "tv everywhere" logo which the organization intends providers to use as a unified brand to denote TV Everywhere services. The logo consists of interlocking rectangles, representing multiple "screens" (platforms) for viewing content. The association also provided design recommendations for TV Everywhere user experiences, aiming to alleviate
1612-1034: The Games across both the NBCOlympics.com site and NBC Olympics Live Extra app; in particular, parent company Comcast accounted for 3.3 million devices from 1.5 million users. Following the Games, the app was rebranded as NBC Sports Live Extra. TV Everywhere services also began to appear in Canada in the early 2010s, with the Canadian launch of HBO Go in 2012, and the 2013 announcement of TV Everywhere services from Bell Media (beginning with Bravo Go , and also including CTV Go ) and Shaw Media (beginning with Global ). The majority of Canadian broadcasters are vertically integrated ; both Bell and Shaw operate internet service providers and national satellite television services. In May 2013, ABC released its Watch ABC mobile app , which allows viewers on participating providers to access live streams from participating ABC affiliates. In December 2013, ABC confirmed that it would impose
1674-502: The Games that required users to authenticate for access. Also in February, HBO launched HBO Go , a video on demand service exclusive to HBO subscribers on participating providers. In September 2010, Disney would begin launching an array of TV Everywhere-based services, including WatchESPN (a successor to ESPN360 offered to ESPN television subscribers), and similar apps for Disney Channel and Disney XD . In August 2011, Fox became
1736-471: The TV Everywhere concept and other recent developments for helping to provide easier, legal access to premium content online. Media activists have criticized the concept as protecting the existing closed , regionalized oligarchy of multichannel television by tying digital content to traditional television subscriptions, thus harming fully over-the-top competitors. Public Knowledge believed that "under
1798-418: The TV Everywhere concept received criticism for being difficult for end-users to set up, while media activists have criticized the concept for being a paywall that extends the existing oligarchy of the subscription television industry to the internet, and considering it to be collusion against cord cutters —those who drop cable and satellite entirely in favor of accessing content via terrestrial television,
1860-410: The TV Everywhere principles were "good concepts" that are "likely to be the general direction for all TV networks and all the distribution connections that are out there." That summer, both TWC and Comcast began trials of services based on the system; Turner Broadcasting was an early supporter of the system, providing access to TBS and TNT content as part of the trials. Comcast officially launched
1922-449: The United States on July 31, 2020, in favor of HBO Max. HBO Now , a separate direct-to-consumer version of the HBO service, was also integrated into HBO Max at launch for most subscribers. Warner Bros. Discovery has continued to use the HBO Go branding for services in eight Southeast Asian markets. Although WarnerMedia initially planned to relaunch these services as HBO Max in 2022, the launch
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1984-460: The analyst knows who is an active customer and who recently churned. Additional benefits include a higher average customer lifetime value (ACLV) than that of nonrecurring business models, greater customer inertia and a more committed customer base as it transitions from purchase to opt-out decisions, and more potential for upselling and cross-selling other products or services. Some software companies such as Adobe and Autodesk have moved from
2046-519: The concept, launched Discovery Go, a centralized TV Everywhere service and mobile app for Discovery Channel , TLC , and its array of sister networks. In the late-2010's, a number of major media companies began to shift their priorities towards direct-to-consumer, subscription-based streaming services, in order to specifically attract cord cutters and increase their competitiveness with competitors such as Netflix and Amazon Prime Video . Some of these forays either subsume content previously distributed via
2108-416: The confusion that had been experienced by users during the authentication process. In a December 2013 survey of 4,205 pay television subscribers, NPD Group found that 21% of them used a TV Everywhere service at least once per month, and that 90% of them were satisfied with the experience. NPD analyst Russ Crupnick felt that "aggressive" use of the model was helping to counter cord cutting, which "speaks to
2170-488: The content. Under the model, broadcasters offer their customers the ability to access content from their channels through internet-based services and mobile apps —either live or on-demand , as part of their subscription to the service. Time Warner Cable first proposed the concept in 2009; in 2010, many television providers and networks began to roll out TV Everywhere services for their subscribers, including major networks such as TBS and TNT (whose owner, Time Warner ,
2232-492: The creation of the content: the scientific articles are written by scientists and reviewed by other scientists as part of their work duties. The publisher does not pay the paper authors and reviewers. In this light, the subscription model has been called undesirable by proponents of the open access movement. Academic publications that use the subscription model are called "closed-access" in opposition to their open-access counterparts. Businesses benefit because they are assured
2294-604: The first over-the-air network to restrict on-demand access with a TV Everywhere-based system; "next day" on-demand episodes (either through its website or Hulu , itself a joint venture between Fox, NBC , and ABC at the time) would only be available online to users authenticating themselves as a subscriber to a cable or satellite provider, or those who subscribe to the Hulu Plus service. All other users would be subject to an eight-day delay. On September 1, 2011, fellow Fox property Big Ten Network (a college sports network dedicated to
2356-414: The first television-connected device to support HBO Go, with later availability on Apple TV , Chromecast , PlayStation , Samsung Smart TVs, and Xbox . Support for devices was subject to cable provider agreements. In January 2019, HBO Go dropped support for PlayStation 3 , Xbox 360 , and Samsung Smart TVs manufactured before 2013. On June 12, 2020, it was announced that HBO Go would be discontinued in
2418-604: The first week, the application was downloaded over one million times, and by June 2011, the number surpassed three million. At launch, HBO Go was only available on computers through the HBO website. iOS and Android applications were released on April 29, 2011. Over the following years, the service expanded to other providers, including AT&T U-verse , Comcast , Cox Communications , Time Warner Cable, DirecTV , Dish Network , Suddenlink Communications , Charter Communications , and virtual MVPD services like AT&T TV Now , AT&T TV , and Hulu . In October 2011, Roku became
2480-426: The functionality of a freemium version, thereby making it impossible (to continue) to use the software in remote places or particularly secure environments without internet access, after the vendor has stopped supporting the version or software, or even has gone out of business leaving the customer without a chance to renew the subscription and access his data or designs maintained with the software (in some businesses it
2542-471: The games only be available through the league's existing apps), Major League Baseball reached a three-year deal with Fox to allow it to offer in-market online streaming on Fox Sports Go (though streamed using MLB Advanced Media infrastructure) for the 16 teams that it holds regional rights to through the Fox Sports Networks division. In December 2015, Discovery Communications , a long hold-out on
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2604-459: The incumbent industry hopes to artificially reproduce the lack of competition for TV distribution to which it is accustomed, based on geographical fiefdoms and turf." The NCTA denied many of Free Press' arguments, stating that it was "an effort to ensure more content than ever is distributed over the Internet at no extra charge to consumers." In July 2014, BTIG analyst Richard Greenfield criticized
2666-690: The internet, and subscription video on demand (SVOD) services. TV Everywhere services were developed in an attempt to compete with the market trend of cord cutting , where consumers drop traditional pay television subscriptions in favor of accessing TV content exclusively through over-the-air television and/or online on-demand services, including Hulu , Netflix , YouTube , and other sources. Authenticated streaming and video on-demand services allow traditional television providers to directly compete with these competitors, and add value to existing television subscriptions in an effort to retain subscribers. In particular, broadcasters and providers have emphasized
2728-673: The length of login session, reducing the number of concurrent streams allowed on a single account, and monitoring unusual usage patterns such as large numbers of concurrent streams on a single account—especially those originating from outside of the customer's region, or during major programs. In August 2019, as part of its latest carriage agreement, it was announced that Charter and Disney would "work together to implement business rules and techniques to address such issues as unauthorized access and password sharing." By contrast, HBO 's then-CEO Richard Plepler argued in an interview that intentional password sharing did not impact their business, and
2790-437: The level of engagement they have with programming and a comfort in using the Internet to both access and interact with that programming." The study also found that 3 out of 10 pay television subscribers who were also subscribed to an SVOD service used TV Everywhere services at least once a week (in comparison to 2 out of 10 for those who were not). Amid criticism of NBC's coverage, adoption of NBC's TV Everywhere services during
2852-590: The login process easy. However, only 25% of those surveyed were aware of the term "TV Everywhere" or the CTAM logo, leading to the firm believing that consumer awareness and education was still a "critical missing piece" in the adoption of these services. In 2014, Comcast was criticized for its decision to arbitrarily block access to HBO Go on PlayStation and Roku devices, but still allowing its use on competing Apple TV and Xbox 360 . Comcast similarly blocked access to Showtime Anytime on Roku as well. A spokesperson for
2914-544: The next period close to when the current agreement expires. In an integrated software solution, for example, the subscription pricing structure is designed so that the revenue stream from the recurring subscriptions is considerably more significant than the revenue from simple one-time purchases. Some subscription schemes (like magazines) also increase sales by not allowing subscribers to accept or reject any specific issue. This reduces customer acquisition costs and allows personalized marketing or database marketing . However,
2976-479: The privilege of authentication, or have other business leverage that can be used as a counterweight to discriminatory authentication." On December 15, 2014, Comcast enabled the ability to use HBO Go and Showtime Anytime on Roku devices. However, Comcast still blocked HBO Go on PlayStation consoles until December 2016. There have been instances of users deliberately sharing their TV Everywhere login credentials, or having them sold without their owner's knowledge on
3038-425: The product seem more affordable. On the other hand, most newspaper and magazine-type subscriptions are paid upfront, which may prevent some customers from subscribing. Fixed prices may be an advantage for consumers who frequently use those services. However, it could disadvantage a customer who plans to use the service frequently but later does not. The commitment to paying for a package may have been more expensive than
3100-468: The provider for contradicting the TV Everywhere concept by discriminating against specific devices, thus prioritizing its own on-demand platform over external services. The company argued that providers could selectively favor certain platforms over others, further stating that "a large and powerful MVPD may use this leverage in negotiations with content providers or operators of streaming platforms, ultimately favoring parties that can either afford to pay for
3162-525: The provider stated that "with every new website, device or player we authenticate, we need to work through technical integration and customer service which takes time and resources. Moving forward, we will continue to prioritize as we partner with various players." During both the FCC's net neutrality hearings and comments regarding Comcast's then-proposed merger with Time Warner Cable (which, by contrast, allows HBO Go access on all supported devices), Roku criticized
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#17328476059833224-651: The service each month. HBO original series were available on a permanent basis, with new episodes typically becoming available for streaming at the time of their initial broadcast in the United States' Eastern Time Zone on the linear HBO channel. Several past HBO series were not available on HBO Go, including Tales from the Crypt , Tenacious D , 1st & Ten , Da Ali G Show , and The Ricky Gervais Show . The Larry Sanders Show and Arliss were not added until 2016 and 2018, respectively. HBO Go did not provide live streams of HBO's linear channels, though programming
3286-413: The system requires that the business have an accurate, reliable, and timely way to manage and track subscriptions. From a marketing-analyst perspective, the vendor has the added benefit of knowing the number of currently active members since a subscription typically involves a contractual agreement. This so-called 'contractual' setting facilitates customer relationship management to a large extent because
3348-688: The term "verify" instead of "authenticate", Cablevision , Comcast , and Verizon introduced systems that automatically verify users with their residential gateways , and Synacor (a provider of authentication platforms used by providers) added the ability for users to link their provider account to a social network login , such as Facebook or Twitter. For the 2012 Summer Olympics and 2014 Winter Olympics , NBC worked closer with providers to help educate users, and produced customized marketing materials and video tutorials featuring Carson Daly (2012) and Ryan Seacrest (2014) to help inform users. As an incentive, NBC also allowed authenticated users to enter
3410-482: The traditional newspapers, magazines, and academic journals . Renewal of a subscription may be periodic and activated automatically so that the cost of a new period is automatically paid for by a pre-authorized charge to a credit card or a checking account. A common variation of the model in online games and on websites is the freemium model, in which the first tier of content is free. Still, access to premium features (for example, game power-ups or article archives)
3472-423: The use of TV Everywhere services to allow multi-platform access to their content, on devices such as personal computers, smartphones , tablets , digital media players , and video game consoles . ESPN first introduced a TV Everywhere-like concept with ESPN360 , a service which allowed users to stream sports programming from its networks either live or on-demand through a website. However, access to ESPN360
3534-639: The video on demand services offered through TV Everywhere systems for being ad-supported. In examples from FX and TNT, he noticed that ads often repeated, and that in TNT's case, its version of an episode of The Last Ship included 20 minutes of unskippable ads across 45 minutes of programming. In conclusion, he contended that viewers would rather wait for programs to appear on subscription streaming services rather than use TV Everywhere services. Despite efforts by broadcasters to educate viewers on TV Everywhere services and how to utilize them (including Fox, which produced
3596-441: Was a "marketing vehicle" that could help attract new subscribers, while Netflix CEO Reed Hastings similarly argued that "household sharing leads to new customers because kids subscribe on their own as they start to earn income". Subscription business model Rather than selling products individually, a subscription offers periodic (daily, weekly, bi-weekly, monthly, semi-annual, yearly/annual, or seasonal) use or access to
3658-541: Was an early supporter of the concept), ESPN , and HBO among others. Broadcast television networks have also adopted TV Everywhere restrictions for their online content, albeit in a less broad-scale adoption than their cable counterparts. Television providers and broadcasters have touted the advantages of being able to access content across multiple platforms, including on the internet, and on mobile devices (such as smartphones and tablet computers ), as part of their existing television subscription. Upon its establishment,
3720-482: Was made available following its airing on the network. TV Everywhere TV Everywhere (also known as authenticated streaming or authenticated video on-demand ) refers to a type of American subscription business model wherein access to streaming video content from a television channel requires users to "authenticate" themselves as current subscribers to the channel, via an account provided by their participating pay television provider, in order to access
3782-510: Was postponed. The services, along with HBO Go in these markets, were rebranded into Max , incorporating Discovery+ content, on November 19, 2024. This effectively brought an end to the HBO Go branding overall after 14 years. HBO Go previously offered a selection of theatrically-released films from studios with distribution deals with HBO, including 20th Century Studios , Universal Pictures , and Warner Bros. Pictures , its sister company. A significant number of titles were added and removed from
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#17328476059833844-403: Was restricted to the users of internet service providers who had negotiated deals with ESPN to offer the service; a model closer in nature to cable television carriage. Similar tactics were soon used by several other channels, such as NFL Network (who used the technique to restrict access to its Game Extra service for Thursday Night Football ) and Epix (an early pioneer of the concept for
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