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All businesses will eventually turn into subscriptions

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Re: All businesses will eventually turn into subscriptions

#31

Post by [deleted] »

elthor89 wrote: post #8
Jensson wrote: post #5

Gaming is ahead here, they thought subscriptions was the future 15 years ago and everyone tried to make subscription games. Then free to play with microtransactions came around and completely turned that on its head, microtransactions generates way more revenue than subscriptions! It might not apply to every field, but it is wrong to say that everything will turn into subscriptions.

Some in the gaming industry tried/are trying hard to make Netflix of gaming subscription work. Micro transactions work right now but maybe tomorrow it is subscription based gaming again.

[deleted]

Re: All businesses will eventually turn into subscriptions

#32

Post by homero »

kybernetyk wrote: post #29
narrator wrote: post #22

Earlier quoted context omitted.

We'll all just eventually "lay flat" like they do in China now when we figure out that hard work doesn't get one anywhere meaningful. https://www.brookings.edu/techstream/the-lying-flat-movement...

That’s what happened in communist Poland. When a doctor makes the same amount as a receptionist or a street sweeper the motivation to be a doctor is pretty low.

Respect and power are still strong drivers

Re: All businesses will eventually turn into subscriptions

#34

Post by blowski »

Seems like one of those articles that predicts whatever's somewhat true right now, will continue getting ever more true forever. Like the growth of my puppy.

I imagine in 100 years, people will look back at articles like this as evidence of the strange time when people didn't own things. But eventually - so will go the article - the disadvantages outweighed the advantages and a new business model (or the recurrence of an old model) came to prevail. Until it too passed.

Re: All businesses will eventually turn into subscriptions

#36

Post by bmitc »

elthor89 wrote: post #8
Jensson wrote: post #5

Gaming is ahead here, they thought subscriptions was the future 15 years ago and everyone tried to make subscription games. Then free to play with microtransactions came around and completely turned that on its head, microtransactions generates way more revenue than subscriptions! It might not apply to every field, but it is wrong to say that everything will turn into subscriptions.

Some in the gaming industry tried/are trying hard to make Netflix of gaming subscription work. Micro transactions work right now but maybe tomorrow it is subscription based gaming again.

I am reminded of the Sega Channel that sold a collection of games via an add on through your cable service.

https://en.wikipedia.org/wiki/Sega_Channel

Re: All businesses will eventually turn into subscriptions

#37

Post by jonplackett »

The reason this will happen is NOT because it’s better for the customer (though in some cases it is).

If a company is getting a recurring payment they can afford to spend a lot more acquiring a customer because they can compare that with a yearly / lifetime cost.

If you’re selling a one off you can’t justify any more than that in your marketing.

It becomes an arms race and the subscription companies win out because they get more money from more customers and ultimately use that to make a better product.

It’s happened like that with iPhone apps. Remember when you could buy a gif editing app and it didn’t come with an annual subscription? I miss those days.

Re: All businesses will eventually turn into subscriptions

#38

Post by tim333 »

All my life, quite a while, subscriptions have been available. In spite of that I have almost none. I prefer to buy the flat, car, even my phone for cash. It's mostly cheaper and less hassle. I think subscriptions will me available in most businesses but whether consumers will chose them is another matter.

Re: All businesses will eventually turn into subscriptions

#39

Post by starfallg »

pdonis wrote: post #3

Subscriptions make sense for things that you get a regular recurring supply of, like milk and newspapers. They might make sense for things that you can get regular upgrades for, like software (although often the "upgrades" aren't really worth much). But they make no sense at all for durable goods that can last for years without significant upgrades, like cars. The whole point with such goods is that you pay once and…

Leasing can be a very cost effective way to having use of a new car. The trick is to find lease deals when manufacturers are offering heavy discounts to shift volume. This discount is then almost entirely used in the amortisation of your 18,24,36,48 month lease. The residual values are often pretty high compared with the original price minus the discount. This makes the lease payments super low.

This may be market specific (I live in the UK) but I have leased Mercs and other premium vehicles paying less than 20% of the vehicles price at new for a 24 month lease. That's unbeatable value no matter how you look at it.

The advantage in this case over buying the car with the discount is you don't have to take on any risk on whether the car would sell 2 or 3 years later, nor have the money held up in the car. As interest rates are super low, it makes sense to use that money to invest in something else with higher returns.

Re: All businesses will eventually turn into subscriptions

#40

Post by zkmon »

The transition from "slow-down in working age population" to "subscription model" appears a bit drastic. Both are huge topics, but could be slightly unrelated. Population growth stagnation may not be the major driver for subscription model. It is just a new way to to increase the cost of product and spread the cost in time so that it doesn't hurt the customer.

Same as buying stuff on loan. You can buy a car or home with almost zero down payment and keep paying the amount over next 20 years. It is essentially paying for usage. You can call it subscription.

Outrageously, I find that even education/training also moved to subscription model. You keep taking the same exam every few years and keep paying them.

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