What do we give up in exchange for unlimited access to music, movies, the latest software, or assorted products that magically appear at our doorsteps in two days?

I first asked myself this question after Microsoft Office and Adobe Creative Suite moved to cloud-based subscription models. I needed both for freelance work. Yet, as any freelancer will tell you, this lifestyle is not known for stability. Not only would I have to spend more than $700 a year on the two software suites, if I had a bad month or two and couldn’t afford the $63 payments, I could lose my access to the software altogether. That could make future work far more difficult, if not impossible. I began to wonder if subscription models would actually compound instability and uncertainty in the gig economy even as they seemed to alleviate them.

The stakes were high. People around me were rapidly growing attached to subscription services in nearly every aspect of their lives.

I conducted an informal poll on Facebook to see if subscriptions are actually as ubiquitous as they seemed from everyday conversations. 65% of my friends who responded said they used and paid for three or more subscriptions. In a women’s professional group of which I am a member, more than 50% of respondents held five or more subscriptions. Some listed as many as ten. A few people commented “too many,” and several expressed a feeling of shock at the realization of just how many subscriptions they had been paying for.

The market is changing, for better or worse. Subscription models are taking hold of industries — most visibly for streaming media, but also software, consumer products, experiences, and much more. Even in the nonprofit world, fundraisers increasingly strategize to secure recurring monthly donations rather than one-time gifts.

There are good reasons for all of these industries to go subscription-based, both for companies and consumers. For companies, the benefits are myriad. Brand loyalty, one of the most coveted components of marketing, is almost a given with subscriptions. They’ve got you coming back, month after month and year after year. Meanwhile, the company’s brand is literally in your face consistently as you reap the benefits of the subscription. Additionally, income streams are somewhat steady and predictable, rather than varying significantly with the seasons. Furthermore, the one company you subscribe to for a particular product category has access to all the data about your usage and consumption in that category, which they can then utilize or sell to other companies.

Consumers, in return, get access to the latest and greatest products for a steady fee. We know that when a new season of our favorite show is released, or an updated version of Photoshop comes out, we will be able to access it. This will be true regardless of our momentary financial position and physical proximity to stores. They will appear on our computers and our doorsteps without any effort on our part, and we will never be left behind the curve. We will always be on the cutting edge of new music, movies, technology, or whatever it may be. Meanwhile, our wallets will stay at an even keel.

For some, subscriptions provide more of an experience than a product. We get to enjoy the excitement of that doorbell ring, the fresh box, the pop-up notification. In some cases, this is an occasional pleasant surprise — Look, there’s a new album by one of your favorite artists! Today’s your lucky day! In others, the subscription provides a predictable “fix” for the neurological reward pathways. One woman wrote to me that she always looks forward to receiving a meditation-themed subscription box and going through the motions of her own little ritual each month.

For others, it is a service. In a world with ever-expanding options for consumers, even selecting one’s own products can be a gargantuan task. For many people, to be satisfied with any significant purchase requires extensive research, weighing of pros and cons, and often traveling (physically or virtually) among multiple retailers to compare. Subscriptions offer the opportunity to undergo that process only once and receive a continual flow of curated products, suggested choices, etc., tailored to one’s own taste or the trusted good taste of the subscription service. An overworked mother can outsource meal planning and grocery shopping three nights a week, feed the family a reliably good meal, and save that time and mental energy for something else on her metaphorical plate. Isn’t that worth $10 a serving?

“three people having a toast on table” by Pablo Merchán Montes on Unsplash

I asked myself what subscriptions truly cost again when, between jobs and living carefully on two small digits of my last paycheck for a final week, one day I opened my banking app to see the balance even lower than expected. I held two monthly subscriptions — one for a music streaming service and one for a publication I read regularly — and the charges had both been processed during that week. I’d forgotten to factor those into my budget. I was lucky that my annual subscription to a service rhyming with Gammazon Grime hadn’t come due at the same time, because that would have put me in debt.

In theory, subscriptions should make budgeting easier. Expenses should stay constant each month for each of your subscriptions. We can plan for the month or year knowing that, on x date, y amount will leave our bank accounts and it will cover our usage of z product/service until the next month or year. From there, we are free to use it as much as we want without worrying about going over budget. Spread-out payment plans are not new to lower-income people; they can help when budgets are tight and enable someone to obtain a good that otherwise would have been out of their reach.

Still, it is rarely this simple for subscriptions. First of all, consumers are always paying extra for the service component of the subscription — the curation, the delivery, etc. It seems minimal, but it adds up. It is surprisingly easy to underestimate the actual cost of an item when you pay for it in small chunks. $10/month seems downright cheap until you add it up over five, ten, or twenty years. Now multiply that by three, five, or ten subscriptions. Or take that family of four paying $10 per serving for three meals each week. That’s $120 a week, $480 a month, $6240 a year…for less than half of the family’s dinners.

Now, too, we have to keep track of which products and services we subscribe to, when the payments are made, and the bounds of our allowable usage. We are playing a game with the companies, since we aim to get the most out of the subscription and they have to maximize profits. Sometimes they hike prices, set new limits, or introduce new pricing tiers. Then our decision calculus must begin anew — or, for many people, we forgo the calculus and inertia keeps us paying even as conditions change.

Sometimes, it simply slips our notice. Once, I was required to subscribe to an online learning platform for a class, and I didn’t realize until 3 months after the class ended that by forgetting to cancel the subscription I’d cost myself $45 extra for a service I’d stopped using. Argh!

The subscription model may raise the risk of overconsumption to unprecedented levels. Jacques Peretti, author of Done: The Secret Deals That Are Changing Our World, explains that the process of payment itself has changed since the introduction of credit, and again since the development of online payments, to make the process psychologically easier for consumers. Peretti looked at an MIT study that came out around the same time Elon Musk, Peter Thiel, and Max Levchin were creating PayPal (in what he calls a “road to Damascus” moment) which showed that when people pay with cash, neurological pathways light up that cause them to physically experience pain. It’s not much, a slight “flinch moment” as you pull the cash out of your wallet to hand it over, but it keeps us tethered to the actual cost of our spending. Study participants who used credit cards bid on average twice as much as cash bidders for the same product. Why? When paying with a credit card, we don’t experience that same pain, so we don’t feel the “cost” in the same way. Paying online is even more effortless — no wallet, no swipe, just a click.

I would argue that subscriptions have gone one step further, so we don’t even see or mentally register the payments. They simply happen, and we continue to spend and spend, pain-free, until someday while glancing at our bank statements we notice a charge (or five). By then it is too late.

“MacBook Pro” by NeONBRAND on Unsplash

I asked what we’re giving up for subscriptions again every time one of my peers extolled the delights of MoviePass, a way to enjoy nearly unlimited films at the cinema for a monthly fee of $10. It sounded too good to be true, at a time in which a single movie ticket often costs more than that amount. My friends were having a lot of great moviegoing experiences with it. But if there’s one thing I’ve learned in my time on this planet, it’s that if something seems too good to be true it probably is. This was recently confirmed for MoviePass. I couldn’t expect it to stay that way for long, and if its strategy was anything like Uber’s — to monopolize a market via unsustainably low fares and then jack up the prices — it could end in trouble.

The key to understanding subscriptions — and this is a great benefit from a business perspective, but a great concern of mine as a consumer — is that they are designed to hook and retain you. Sometimes, this even extends to the literal product design, creating labyrinthine processes that make it physically difficult to leave. Other times, the hook is more mental and emotional. Sure, you can cancel, but you probably won’t.

I signed up for a 3-month trial of the premium version of my preferred music streaming service a year ago, thinking that it would be useful during a 3-month project I was working on, and that I’d cancel after the trial if it didn’t seem worth it or if I didn’t have a steady enough income to justify paying monthly for music. In the past I’d just occasionally bought songs, acquired them from friends, or used YouTube and free streaming services to hear songs that weren’t in my library.

Surprise, surprise… the trial ended, the project ended, and I didn’t have a steady income, but the idea of going back to those distracting ads after every few songs and being unable to listen to the playlists I’d made was so inconceivable that I kept the subscription.

When we subscribe to a steady supply of entertainment and luxury products, the items that would have been the first to go in times of cutback or struggle are not even on the table. This is the design of the subscription model.

Photo by rawpixel on Unsplash

I don’t think it’s a coincidence that our expenses are getting steadier at the same time as our incomes are getting more unstable. Raphaële Chappe of The Brooklyn Institute for Social Research argues that the gig economy has shifted risk from companies to workers. Chappe says that within neoliberalism there is a “discourse of risk” that posits risk as liberating and empowering, but that in actuality companies are setting all the terms, mining a significant share of the profits, and taking on very little of the risk, leaving employees and consumers more vulnerable to any adverse consequences of business activities.

Just as there is a precariousness to working as a contractor rather than in a full-time job with job security and benefits, we find ourselves in a precarious situation when we subscribe to everything we use. In both cases, the corporation holds most of the power and assumes very little of the risk.

As consumers of subscriptions, we do not own a product. We rent. Have you thought about what would happen if you stopped sharing that Netflix account, that Spotify subscription, or your entire iCloud library? Or what if Apple Music wiped out your rare song collection? What if one or more of these companies went under, or just suddenly stopped providing the service you’ve been paying for? What would you listen to, what would you watch, what would happen to those files you’ve stored in the cloud? These are real questions to consider now. They are risks.

The subscription model is not new, but it is rising rapidly enough to change entire markets. Jeremy Rifkin foretold this shift nearly two decades ago in The Age of Access: How the Shift from Ownership to Access is Transforming Capitalism:

In the new era, markets are making way for networks, and ownership is steadily being replaced by access… suppliers hold on to property in the new economy and lease, rent, or charge an admission fee, subscription, or membership dues for its short-term use. The exchange of property between sellers and buyers — the most important feature of the modern market system — gives way to short-term access between servers and clients operating in a network relationship.

Rifkin believed that some of the fundamental tenets of the market system were morphing as traditional exchanges of goods were replaced by networks supplying access and short-term usage. He predicted that the technological and economic forces shaping his world at the turn of the millennium would eventually snowball into the development of a new economic system focused on experiences and access over purchasing goods.

The shift from markets to networks and from ownership to access, the marginalization of physical property and the ascendance of intellectual property, and the increasing commodification of human relationships are slowly leading us out of an era in which the exchange of property is the critical function of the economy and into a new world in which the purchase of lived experiences becomes the consummate commodity.

As the world wonders why millennials aren’t buying houses (are the avocados to blame?) and are killing all the industries (restaurants! gyms! marriage! mayonnaise!) the question in my mind becomes what is truly driving such changes and where it will go from here. Are these developments part of an overall trend toward renting rather than buying, and if so, does that give us more freedom or leave us more dependent upon the corporations we rent from? What if it’s both? Is it worth it?

A professional lifelong learner.

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