Question

A defining characteristic of the subscription-based business model is that

a. the user pays for access to a product or service whether he or she uses it during the payment term or not.
b. basic features of a product or service are provided free of charge, but the user must pay for premium services such as advanced features or add-ons.
c. initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.
d. user pays for only the services he or she consumes.

Answer 1

Answer: A.

The user pays for access to a product or service whether he or she uses it during the payment term or not.

Explanation: the subscription-based business model is that the user must pay for the services, even if the user did not make use of that service, for example, if a user subscribe for a television cable, and he/she traveled and was not around to watch the TV, the cable has been paid for and he was not chanced to make use of it.

Industries that use this model presently are cable television, cellular service providers, satellite radio, Internet service providers, and health clubs.

Answer 2

a. The user pays for access to a product or service whether he or she uses it during the payment term or not.

Step-by-step explanation:

Obviously, a defining characteristic of the subscription-based business such as TV subscription require the customers to subscribe regardless of how much or how less the customers will watch it. If the customers did not watch the TV, it does not bother the producer as a sales has been made on the business model.

This business model requires regular to regular payment mode to renew the existing subscription on the business as well.