The Subscription Economy Is Sending Me To The PoorhouseReading Time: 5 minutes
[UPDATE: See below]
Technology is supposed to make our lives better. Shouldn’t we demand the same from business models? Sadly, it seems as if today’s bleeding edge innovations in business and retail are in — pricing. Yes, pricing. The chief goal, apparently, is to turn everything we buy or might ever buy into a subscription.
While social media titans offer brands the allure of connecting with each of us — on a human level, of course — I confess I am not at all interested in a Facebook or Twitter relationship with whomever provides my toilet paper, vitamins, cloud storage, dog food, or even the books I read.
Yet, that’s how subscriptions are marketed — as a relationship. One designed to benefit us, the consumer, as much as the seller.
I have my doubts. After pulling together a few stolen moments to review my monthly spending, I discovered I had signed up — subscribed — for all manner of products.
- Oyster (books)
- Netflix (television)
- Pandora (music)
- New York Times (website)
- OneDrive (cloud storage)
- Anchovy oil (via Amazon, for the dogs)
- NHL Center Ice
- MLB At Bat
- Razor blades
- Zyflamend (via Amazon, a multi-vitamin I decided to try and which apparently I subscribed to so as to save a penny per softgel)
- Craft coffee
This does not include the makeup my wife subscribes to and somehow thinks I don’t know about. Nor does it include — as we are still “discussing” this — our basic monthly cable service, nor our monthly iPhone and Internet bills.
But, baby steps. Wherever I can, I am canceling all subscriptions, permanently.
Instead of making my life easier, making it so I never ever have to worry about running out of milk or daily vitamins, the subscription economy has become just another needless pressing burden. While analysts and market makers may cheer the subscription economy, I shall take my leave, despite the Sisyphean effort most retailers require to break these relationships.
Burning Their Money In Wastebaskets
Do you believe the sudden, expansive ramp-up in subscription everything is designed for your benefit? Really? Me, neither.
Are retailers so desperate to take more of what money we have they now must actively promote never ending subscriptions even for the most garden variety products?
I do most of my online shopping through Amazon. It seems like every item I search for anymore, the retail giant offers an enticement if I subscribe instead of just buying the product outright.
I am dubious of any savings or convenience.
Amazon states, non-ironically, “the more you subscribe the more you save.” They claim buyers can save 15% more when they “receive 5 or more subscriptions” per month.
15% savings? On top of Amazon’s already low prices? For a retailer notorious for reducing margins to zero, that’s a rather significant amount to be giving up.
I suspect they can offer this because you will soon discover you have agreed to purchase far more than you really need. Win for them, less so for you. Plus, if you are subscribing to Amazon — for anything — you can’t spend that dollar anywhere else. Share of wallet and all that.
To be fair, Amazon is one of the few retailers that actually makes it reasonably easy to quit. Try that with every other subscription service. Go on, I dare you. Just try. Start with the New York Times or Wall Street Journal. They will insist upon a phone call — in the year 2014! You know exactly why.
Canceling that subscription, which was supposed to benefit you, is made just hard enough, just time consuming enough to make it not worth your effort. You remain locked in. A dollar here, a dollar there, pretty soon it all adds up.
This is not what technology should do — ever. Technology should be liberating, empowering, not a time-suck and not a money pit.
The Best Minds of My Generation
Why must our greatest minds be employed by our greatest companies then tasked with nothing more than making it so we mere mortals can not ever glean the actual price for an actual product?
I suspect you are all familiar with the following scenarios:
I’d like to cancel my subscription.
But, sir, we can reduce the price by 25% if you extend your trial rate for 17 more weeks!
I want ESPN. How much does that cost?
If you subscribe to our Gold bundle, Mr. Hall, you get Bravo, A&E, ESPN and…
You promise me the best prices on the web. So why are you forcing me to join some Prime membership or demanding I buy this same item from you month after month, forever?
(Trick question. There is no human for you to ask this.)
You track me on the web. You track my movements on through my smartphone apps. How much is my data worth?
We can’t tell you that, sir.
But it’s my data!
No, sir. Not really.
I imagine the great minds of Silicon Valley will not stop at having my refrigerator text me that I am low on eggs. Rather, Big Tech will team up with Big Grocer and place me on a weekly egg subscription — one that is impossible to cancel but which no doubt promises 10 cents off, per egg, should I buy two boxes of Cheerios every month for the next year.
Time to disrupt these data disruptors. If we fail to take action soon, we could find ourselves trapped in a web of subscriptions from which there is no escape.
Trembling Before the Machinery
I cover the technology industry because it empowers people and makes the world more accessible. I analyze business trends because most of the innovation of the world, in my view, happens within the walls of for-profit enterprises.
But if you, the retailer, are incentivized to offer me something — anything — other than what I want right now and for which I am willing to pay, right now, then I immediately lose trust in you.
Life is much too short for double-talk, bundles and One-A-Day subscriptions.
Regrettably, my howls are likely to fall upon deaf ears. Nearly 15 million companies in the US and Europe are implementing the subscription model. FastCompany recently profiled Zuora, which has received a “whopping” $128 million in venture capital. Zuora’s mission? To “help us shift from owners to subscribers.”
Zuora needs all that money not just to scale, but to execute.
“(Subscription’s) a task more complex than you might think. How exactly should you price your product? How do you build a payment infrastructure to allow for price changes? How do you process payments internationally? How do you manage the legal issues that surround storing credit cards?”
Honestly, I am not even remotely impressed by the computational complexity and Big Data algorithms crafted by those leading the subscription charge.
Reminder: 45 years ago, before the majority of the people on this planet were alive, America sent three men to the moon. Two of them walked about. All three were returned safely to Earth.
I do not wish to be unfair to Zuora. That they have massive backing from multiple VCs in Silicon Valley suggests their skill set is to be lauded. That said, I simply do not believe their “nine keys to subscription success” are for my benefit or yours.
The Incomprehensible Prison
I am fully aware that far greater minds than mine will spend far more time than I ever can crafting clever appeals with the sole intent of enticing me to subscribe. To anything. I may succumb, despite my declaration.
I need your help.
Recently, after a Paypal executive went on a rather bizarre Twitter rant, I created the notion of a “Twitter buddy.” A Twitter buddy is the person who rips the phone from your hands the moment you begin tweeting inappropriately.
We also should have a subscription buddy.
If I ever decide to subscribe to a new service, subscribe to some product, grab my credit card and throw it in the shredder. That’s what a true friend would do. That’s a relationship worth keeping.
[UPDATE 27 May 2014: Zuora posted a response to this column on their website. It’s a strong rebuttal and I recommend you read it. — Brian]