Companies have products that they offer say Reddit.
An API (Application Programming Interface) is a guided way that app developers allow different developers and companies to interact with their product.
Say I want to make a bot that makes a Reddit post every 5 minutes. I could do this through web parsing and the like, but it could get difficult depending on how the website is laid out. Or I can use the Reddit API which streamlined the process, as long as I follow their guidelines. (Say rather than using multiple libraries and tens of lines of code, I import the Reddit library and call the function (createPost or whatever it’s called.)
For an API subscription, I’m assuming you’re referring to Twitter API (please correct me if I’m wrong,) every time a developer calls the API the company knows and tracks their call count /frequency. Most grant free access as long as you don’t abuse the API, others require you to pay for X calls or X calls/second.
There’s also the subscription where you subscribe to be notified of an event, but I’m not sure if this is what you meant.
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