Newspapers and magazines. Streaming services. Software. Fitness. Vegetable and fish boxes. Audio books. Smartphone apps. Ink for your printer. Contact lenses. Make-up. Gadgets. Bookkeeping. Shared cars. And soon, services for your own car.
What do they have in common? They all use the same business model: subscriptions. And who invented and pioneered that model? Newspapers and magazines. They have always required subscriptions and have maintained that model with their digital products and services. I don’t know a single media in for example Denmark, where I can buy the single article I need. Or buy access for a day or a week. I have to subscribe – often expensively – for all their content, even if I use a tenth of it. In other countries there are some micro payments but subscriptions is the prevalent model.
Thanks to the media, lots of other business people have seen the idea in this lucrative business model, where profit rather than the consumer is the focus. What happened to those apps with one-off payments? Where’s the opportunity to cherry-pick, as they say, when the model is ‘pay for what you use’?
Micropayments or one-off payments have been replaced by subscriptions and the pitfalls are many:
- You often pay for more than you need, especially when we’re talking newspapers, audio books and streaming services.
- Most services practice auto-renewing subscriptions, which should be banned (it will be in several US states) because the payment just keeps going until you remember to stop it.
- You think you pay less than you do, because you get it in ‘small’ monthly installments, but in reality you easily lose track of your finances.
- And you often pay more as a regular subscriber than if you were a disloyal customer constantly hunting for discounts, because most services are hungry for ‘new’ customers.
The benefits pile up for those who offer subscriptions:
- They sell more to subscribers than to non-subscribers.
- Subscriptions are many many times more lucrative than single purchases.
- They get a steady income. And it’s thus easier to budget.
- And often it provides them with a whole lot of ongoing personal data such as location and interests (also see this advantage clubs).
17 subscriptions per household
According to Subscrybe, a Danish company with three partners, all from the newspaper world, the subscription trend taps into another trend, where young people in particular want to rent rather than own (they can’t afford to own, after all). The company, which advises other businesses on introducing subscriptions, also talks of benefits for consumers: flexibility and convenience. That may be true in cases, where it’s super easy to unsubscribe or pause the service, but it’s far from always the case, and I think most people feel they have too many subscriptions they don’t use. According to Subscrybe, Danish households have an average of 17 subscriptions, twice as many as they even guessed before being asked to count them up. The same 2021 survey of 1000 Danes also found that we are all getting more and more subscriptions. Americans spends millions of dollars on subscriptions, according to this New York Times article.
So the next step will probably be when the car manufacturers’ subscription hype hits Denmark. In South Korea, BMW, for example, has launched a monthly subscription to get heated seats, while Toyota will make the remote start function on your key part of a larger subscription.
CPH:DOX goes against the flow
I’m crossing my fingers that more people will go against the subscription trend, although I know it’s probably an uphill battle with heavy loads in a headwind (and I haven’t even mentioned the heavily related advantage or customer clubs).
So much the happier I was when a new Danish streaming service was launched just before Christmas with the best documentaries from around the world. Paradox, it’s called, and it’s run by Denmark’s CPH:DOX, one of the world’s biggest documentary film festivals. The best thing about it is that you only pay for what you want to see. 49 kr per rented film. So it’s not subscription-based.
Translated with the help of www.DeepL.com. This article was first published in Danish in the national Danish daily Politiken.
Photo: Unsplash Erda Estremera: No you can’t subscribe to dogs. But you can subscripe to dog food.
