Changing times and economic dynamics of the modern consumer, customers today are less keen on paying large amounts for products or services upfront. Instead, they believe in paying regular small installments, rather than paying the full value of a product to own it. In many ways, access trumps ownership.
The Rise of the Subscription Economy
Witnessing the subscription uptrend, the subscription business model has been implemented in various fields including e-commerce, transportation, and media. This rise in subscription-based models has provided consumers with access to products across the board, be it a luxury item likes purses and gowns to everyday commodities like razors.
Translating this model into figures, the subscription economy boasted more than 11 million customers in 2017 for the Business-to-Consumer (B2C) segment, and there were more than 2,000 B2C companies that used the subscription-based mode according to a February 2018 report from PYMNTS.
If one takes into consideration the same metrics since 2014, the customer visits to these subscription-based websites have surged by 800 percent, serving over 37 million visitors in total. McKinsey & Company, an American management consulting firm, found similar results in its study conducted in February 2018. Per the survey, 15 percent of online shoppers had subscribed to an e-commerce subscription in 2017.
Bringing Blockchain and Subscriptions Together: Introducing ERC-948
While the boom in subscription business models was visible, ConsenSys, an Ethereum-focused development studio, published an article which shared insights on a proposed Ethereum token protocol ERC-948. The article discussed integrating subscription services on the blockchain.
The idea of ERC-948 was put forward by Kevin Owocki of Gitcoin. The concept quickly gained the attention of many as a merger between the world of blockchain and subscription services seemed a viable alternative to legacy financial systems.