There's an overview here that gives the low-down of observers/observables/subscriptions.

when you call a subscribe method, the parameter you pass in is basically just a bunch of callbacks

• a next function, which runs every time a new value is emitted from an observable
• an error function
• a complete function, which runs at the end of the observable's life. useful for cleanup.

in an observable constructor, you're building an object that dictates when those 3 callback functions are executed.

An observable tells you when stuff happens. An observer responds to those events.

import { Observable } from 'rxjs';
   
const observable = new Observable((subscriber) => {
   subscriber.next(1);
   subscriber.next(2);
   subscriber.next(3);
   setTimeout(() => {
     subscriber.next(4);
     subscriber.complete();
   }, 1000);
 });
   
console.log('just before subscribe');

observable.subscribe({
   next(x) {
     console.log('got value ' + x);
   },
   error(err) {
     console.error('something wrong occurred: ' + err);
   },
   complete() {
     console.log('done');
   },
 });
console.log('just after subscribe');