Welcome to the Subscription Economy

by May 1, 2019Business, Technology0 comments

Until about two years ago, I had few monthly or annual subscriptions; pretty much only the traditional ones you cannot avoid such as a phone bill, magazine subscription and the like. In fact, I was almost hostile to the idea of paying for something on a periodic basis if I could just buy it outright. I wonder if this comes from the immigrant mentality that has been installed in me over the year: “Renting or leasing something is more expensive, so just save up and buy it instead”. This “immigrant credo” mostly applied to a house or car, but I think mentally I was carrying it over to everything else including software. I remember thinking, “why would I pay $99/year to lease Microsoft Office when I can just buy it outright for a hundred fifty or so and use it for years”.

Well, fast forward a few years and I not only subscribe to Microsoft Office 360 but also other software including Adobe Creative Cloud, Apple Music, iCloud Storage, Dropbox and a host of others. For those under 30, this seems totally natural, but for the rest of us that have purchased software or CDs or god forbid audio tapes, this seems almost blasphemous. But the world has moved on and today in many cases, subscribing to a service has become a no brainer. I convinced myself to fork out money annually for Office 360 because Microsoft adeptly included 1TB of storage (via the One Drive service) and sweetened it further by allowing me to add my kids, wife and parents to the subscription for “free”. What a deal, how could I resist? Similarly, why would I pay $0.99 to own an MP3 when my entire family can stream as much music as we want, whenever we want, for a mere $14.99 per month. The cost and convenience is impossible to beat by purchasing music a la carte.

So where does this go next? Could I actually violate the most sacrosanct “immigrant credo” that says in effect: “Only suckers lease a car”? Well, I have been pondering changing my car and given the steady advance (and risk of obsolescence) in new technology, a lease might be in order. For example, I am intrigued by the idea of driving a Toyota Mirai hydrogen fuel cell vehicle and at $349/month (including free fuel for 3 years) this sounds like another no brainer. Or maybe ditch owning a car altogether and just use Lyft or Uber. In fact, I see that Lyft is offering 30 rides per month (up to $15 each) for $299. Hmmm, $450 worth of rides for $299—never say never!