The Difference Between Membership and Subscription Membership is an attitude, an emotion. A subscription is a financial arrangement. It’s quite possible for something to be both a subscription and a membership organization. In fact, the Membership Economy is the logical extension of subscriptions.
Many Membership Economy organisations don’t see themselves as membership. They say, “We have a subscription business,” or “We’re a sharing business,” or, “We’re a transactional company with an affinity program,” or, “We’re a social network.” Sometimes they say that membership organisations must be mission driven nonprofits or about connections among members. None of this is true. What makes a membership organisation is the attitude of the organization and the feelings of its members—not whether members subscribe. Companies’ failure to see themselves as part of this bigger trend can limit their potential to build relationships and strengthen their models.
A subscription does give access and an array of choices. A transactional customer might own dozens or even hundreds of movies. But Netflix has thousands—from different countries, genres, and more—providing tremendous choice and the latest options. And the monthly price is low which protects the customer’s cash flow. Access is so much bigger than ownership, and the subscription model ties customers to organisations in an ongoing relationship with an opportunity for benefits on both sides. Those are simple subscription benefits. But some of the value subscribers get from Netflix is derived from the other people using it and their comments about movies and TV shows. This value comes from the community. Netflix also created an algorithm that harvests the data it collects in order to analyse its members’ behaviour. It can use the information it gets to provide recommendations for other films. Even with all these benefits, many Netflix subscribers may not feel like members, and that’s okay because they’re still part of the Membership Economy.
Even without using the nomenclature of membership and even without investing in the community side, both the company and the customers are benefiting from the application of the principles of the Membership Economy.