The subscription business model and new venture viability during a crisis

Integrating insights from the service-dominant logic and the activity system perspective of business models, we explore and analyze three core design rules of the subscription business model: customer-orientation, interfunctional coordination, and digitalization. We find that the adoption of the subscription business model strengthens new venture viability during a crisis. More specifically, the negative impact of the COVID-19 crisis on the performance of subscription-based ventures is less pronounced than other business models in terms of changes in shareholder value, firm risk, and severity of loss. Furthermore, we find that new subscription-based ventures depend less on marketing expenses during a crisis.