Advertisement or Services? The Choice of Customers’ Subscription
Research Article
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Advertisement or Services? The Choice of Customers’ Subscription

Chak Wa Cheung 1, Xinyang Ma 2*
1 Jinan University
2 Soochow University
*Corresponding author: maxinyangryan@foxmail.com
Published on 11 July 2025
Volume Cover
AEMPS Vol.202
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-263-8
ISBN (Online): 978-1-80590-264-5
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Abstract

Subscription, with a long history, is a popular business model that has been creating revenue for lots of companies. There are subscription methods with different features in markets nowadays. However, there is no clear evidence of how the merchandise associated with the subscription would affect consumer behavior. In this research, we focus on two popular features of subscriptions, removing advertisements and providing better services. Then explore the relevance of different merchandise and consumer behavior through the survey. Based on descriptive statistical methods to analyze consumer subscription consumption preferences, this article quantitatively analyzes the factors influencing the loss rate of subscriptions using econometric models. We find that advertising can reduce subscriber churn rates, leading to increased revenue and user loyalty with effective ad strategies. This suggests that consumers may be more averse to losing existing features (ad-free viewing) than gaining additional ones. Loss aversion might potentially play a role in consumer preference.

Keywords:

Subscription, Consumer behavior, Advertising, Loss aversion

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Cheung,C.W.;Ma,X. (2025). Advertisement or Services? The Choice of Customers’ Subscription. Advances in Economics, Management and Political Sciences,202,105-113.

References

[1]. Pieters, L., Lobaugh, K., Waelter, A., & Rogers, S. (2023, November 20). An evolving world of digital goods and services. Deloitte Insights. https: //www2.deloitte.com/xe/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker/consumer-digital-spending-trends.html.

[2]. Sony Group Corporation. (2024). Supplemental Financial Data.

[3]. Chen, Y., & Keng, C. (2023). The effect of subscription relational bond on customer engagement and stickiness in podcast: the moderating role of social connectedness. Service Business, 17(3), 723–745.

[4]. McCormick, M. (2016, March 9). The power of subscription pricing. https: //blog.blackcurve.com/the-power-of-subscription-pricing.

[5]. Clapp, S. L. C. (1931). The beginnings of subscription publication in the seventeenth century. Modern Philology, 29(2), 199–224.

[6]. Cachon, G. P., & Feldman, P. (2011). Pricing services subject to congestion: Charge Per-Use fees or sell subscriptions? Manufacturing & Service Operations Management, 13(2), 244–260.

[7]. Chen, L. (2023). Analysis of online platforms’ free trial strategies for digital content subscription. Journal of Theoretical and Applied Electronic Commerce Research, 18(4), 2107–2124.

[8]. Thøgersen, J. (2009). Promoting public transport as a subscription service: Effects of a free month travel card. Transport Policy, 16(6), 335–343.

[9]. National Bureau of Statistics of China. (2022). CHINA STATISTICAL YEARBOOK. 7503799501, 9787503799501

[10]. Muthén, B. (1979). A Structural Probit Model with Latent Variables. Journal of the American Statistical Association, 74(368), 807–811.

[11]. Novemsky, N., & Kahneman, D. (2005). The boundaries of loss aversion. Journal of Marketing Research, 42(2), 119–128.

References

[1]. Pieters, L., Lobaugh, K., Waelter, A., & Rogers, S. (2023, November 20). An evolving world of digital goods and services. Deloitte Insights. https: //www2.deloitte.com/xe/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker/consumer-digital-spending-trends.html.

[2]. Sony Group Corporation. (2024). Supplemental Financial Data.

[3]. Chen, Y., & Keng, C. (2023). The effect of subscription relational bond on customer engagement and stickiness in podcast: the moderating role of social connectedness. Service Business, 17(3), 723–745.

[4]. McCormick, M. (2016, March 9). The power of subscription pricing. https: //blog.blackcurve.com/the-power-of-subscription-pricing.

[5]. Clapp, S. L. C. (1931). The beginnings of subscription publication in the seventeenth century. Modern Philology, 29(2), 199–224.

[6]. Cachon, G. P., & Feldman, P. (2011). Pricing services subject to congestion: Charge Per-Use fees or sell subscriptions? Manufacturing & Service Operations Management, 13(2), 244–260.

[7]. Chen, L. (2023). Analysis of online platforms’ free trial strategies for digital content subscription. Journal of Theoretical and Applied Electronic Commerce Research, 18(4), 2107–2124.

[8]. Thøgersen, J. (2009). Promoting public transport as a subscription service: Effects of a free month travel card. Transport Policy, 16(6), 335–343.

[9]. National Bureau of Statistics of China. (2022). CHINA STATISTICAL YEARBOOK. 7503799501, 9787503799501

[10]. Muthén, B. (1979). A Structural Probit Model with Latent Variables. Journal of the American Statistical Association, 74(368), 807–811.

[11]. Novemsky, N., & Kahneman, D. (2005). The boundaries of loss aversion. Journal of Marketing Research, 42(2), 119–128.

Cite this article

Cheung,C.W.;Ma,X. (2025). Advertisement or Services? The Choice of Customers’ Subscription. Advances in Economics, Management and Political Sciences,202,105-113.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of the 3rd International Conference on Financial Technology and Business Analysis

ISBN: 978-1-80590-263-8(Print) / 978-1-80590-264-5(Online)
Editor: Ursula Faura-Martínez
Conference website: https://2024.icftba.org/
Conference date: 13 June 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.202
ISSN: 2754-1169(Print) / 2754-1177(Online)

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