Final answer:
A usage subscription is a business model where customers are billed recurrently based on the amount of service or product they use, as opposed to a fixed fee. This model offers flexibility and can lead to cost savings for users who prefer paying only for what they consume.
Step-by-step explanation:
A usage subscription typically refers to a business model where customers pay a recurring fee based on their level of usage of a service or product.
Unlike flat-rate subscriptions, where customers pay a fixed amount regardless of usage levels, usage subscriptions charge according to the amount of service consumed.
This model is commonly seen in utilities like water and electricity, but is increasingly popular for digital services such as cloud storage and SaaS (Software as a Service) where fees are based on metrics like the amount of data stored or number of active users.
With usage-based subscriptions, the pricing is often variable, offering flexibility for both the business and the customer.
It allows companies to tailor their services to various user needs and helps them manage and predict demand. For users, it often means paying only for what they need or use, which can provide cost savings compared to flat-rate models.