The Pain And Pleasures Of The Subscription Economy

One of the big changes in the modern economy, thanks to technology-fuelled apps and platforms, is the daunting cost of owning anything for life.

The gig economy heralds the age of impermanence, where everything from incomes to livelihoods are transient in nature for the vast majority of people.

In this context, to expect people to undertake long-term commitments to buy a house, car, or even a high-end phone (an Apple iPhone costs more than a base motorbike in India) makes no sense.

We need to move towards subscriptions that can be abandoned when the need to tighten belts arises for anyone.

There is also the paradox of cheaper gadgets, but faster redundancy. Basic smartphones have never been cheaper, but they also need replacement faster as new apps and services need higher performance capabilities.

I remember buying a tablet and it worked fine till the company prompted me to upgrade the operating system. Which I did to my eternal regret.

After the upgrade, the tablet stopped working well. With iOS, Windows and Android providing upgrades for Apple, Microsoft and smartphones all the time, the hardware simply cannot keep up after two years. So the falling cost of hardware is a partial myth. 

Coming back to the subscription economy, the problem is that most service providers who offer subscriptions want to tie in customers for as long as possible, when the need for a subscription may be short-term or transient.

Moreover, when the sheer number of subscriptions in one’s life grows in number, they not only become impossible to manage, but are also wasteful.

A few days ago, I was just listing all my subscriptions and was astounded at how many I had. And this is only a partial list.

There is a subscription for postpaid and prepaid mobiles services (two for two phones), for virus-protection for four or five devices in the family, four or five online publications (apart from physical purchases), subscriptions for satellite TV and various OTT apps, payments for maintenance contracts for everything from pest control to ACs to water purifiers, subscriptions for an expanded Google storage, et al.

And everyday, other service providers are banging at my digital door trying to entice me into more subscriptions for Scribd and endless numbers of foreign publications.

And we are not even talking about big ticket items like EMIs for home loans and cars and gadgets of various kinds.

I am a great believer in the subscription economy, for the ownership economy is fading away and meant only for the few things you can’t do without and for those who can afford to buy rather than rent. 

However, the purpose of mentioning all my subscriptions above is to underline a broader reality. At some point, there is going to be subscription fatigue, not only because of the costs and hassles involved, but also the falling level of benefits as subscriptions keep getting added.

Any human being has only so much time on his hands, and trying to make life more and more complex is hardly a sensible thing to do.

For example, I subscribe to several publications, but I can actually find the same information for free by Googling harder.

However, it is true that I will pay for unique content services, when I desperately want them, but this cannot work if the need is only for a specific purpose or need.

I may want to read one article in The New York Times, but it is not worth my while to subscribe for a whole year, even if the initial deal is enticing. I am okay with paying one dollar to read one item a month, not paying the full year’s or quarter’s subscription.

Like the sachet revolution in India, the unit costs are higher, but the overheads and committed costs are lower as we pay only for what is actually consumed. It’s the difference between calling an Uber and paying only for one ride, and keeping a hired car on a yearly basis when I use the service only sometimes. 

Even at low annual costs, the usage does not warrant the expense, and cancelling any subscription is never easy, since publications (and service providers, in general) make that tougher.

I remember wanting to cancel my Economist subscription some years back, but I was forced to call some number abroad, and I had a tough time understanding their diction. Since then I have not been a fan of automatic renewals. Worse, even when you cancel, you get inundated with regular emails asking you to resubscribe.

The short points are these.

The subscription economy is for real, but those offering such services should stop to ask a simple question: am I catering to a diehard user or a snacker?

Most people are snackers, who need a service only once in a while, and these subscribers may actually be numerically much larger, and willing to pay more per unit of service consumed, than those who want the whole deal. There is money to be made from snackers, who nibble only once in a while. But they cannot be sold a lifetime pup.

Even for serious users, there is going to be subscription fatigue. It is virtually impossible to manage so many subscriptions and so many login and passwords, so one will be tempted to use password keys and password management services. But this only means the inevitability of having to subscribe to a Google, Norton or McAfee. 

The subscription economy is good, but it brings many challenges too. Both for the user and the subscription provider. The provider should know that not all subscribers want the same thing; the subscriber should know that she usually buys more than she can use.