Technology has seen a shift in its selling model. A few years ago, one could buy a program or a piece of technology and expect it to belong with them for as long as they meant to maintain it. But as technology continues to improve step by step, it becomes infeasible to sell a new product with minor changes every time an innovation came around. So, a subscription-based model arises.
We all know how subscriptions work. A customer receives a product or service from the vendor, and in return, they pay a monthly fee for continued use of that product. This is a simple idea, but in recent years the trend of switching from a one-time payment to monthly installments has increased. Movies and TV shows have gone to being sold on DVD to streaming services, online donations started out as a one-time fundraising campaign and can now be consistently made through monthly payments, and even food can be delivered in boxes for a monthly payment.
For businesses, the subscription model is a much more stable source of income than one-time purchases. To know exactly how many customers there are going to be at the end of the month and the fact that customers are usually willing to stay with the service means that the company doesn’t have to worry about finding new customers to stay afloat. On top of that, over a long period, customers end up paying more for a service than if they just bought something once.
On the other side, customers don’t have to worry about buying a product that would become outdated a year or two after purchasing it. With a subscription, they are provided with constant updates to the product or service. New shows will be added, better technology will streamline the user experience, and updates will fix any problem that the product has. On top of that, several installments can be easier to finance than a lump sum payment. Companies like Affirm or Afterpay even make it so that expensive online purchases can be made over a period of time.
However, the subscription-based model can also be quite predatory. Companies can fight aggressively to maintain their customer base and will make it difficult for anyone to unsubscribe. Anyone that has tried canceling a service that uses subscriptions will know the barrage of bargaining that companies go through to keep their customers. The charges can also sneak its way into the monthly bills and cost consumers hundreds of dollars even after they have stopped using the product. This model also doesn’t work for products that don’t benefit from the advantages that a subscription-based model has. Things that aren’t being constantly improved aren’t really worth using a subscription model for and are better purchased one time.
There are also ways that subscription models have companies lose money. The company MoviePass learned this the hard way when they tried creating a product where customers could watch unlimited movies on a monthly subscription. They assumed there would be some customers that would subscribe but never use it, similar to a gym membership. However, everyone who bought the membership used it to the point that the company was hemorrhaging money. The company left losing millions of dollars and with an important lesson on when a subscription-based model would not work.
The subscription model also takes away an essential aspect of purchasing that is given for one-time purchases. The product that a customer subscribes to is never actually owned by them. Once the subscription ends, the product is taken away. There is no permanent ownership when it comes to subscribing. An artist that uses Photoshop to make a painting will have to continue paying Adobe for the right to work on their own painting. A movie that someone makes a tradition of watching might be taken off the product listing, never to be seen again. The rise of subscriptions means that there are more products that people pay money for, but don’t own.
There should be subscriptions; they make the purchasing of products and services easier for both the seller and the customer. However, there should be a regulation against the predatory practices that some companies take to maintain their subscriber base, and customers have to be aware of the ownership status that they have on products that subscribe to. Subscriptions are a great purchasing option for some products, but they have disadvantages that have to be acknowledged before forgoing the conventional purchasing model.