The New York Times has published an interesting article that examines the growing popularity of the subscription model amongst a variety of businesses.
The New York Times has published an interesting article that examines the growing popularity of the subscription model amongst a variety of businesses. Pioneered by periodicals in the 17th century, the monthly payment system has been recently applied to everything from movie rentals to software and cars.
The Times explains:
Marketers like them for good reason: Convince someone to take a subscription, and the revenue flows in for months to come. “It is amazing how inertia takes over,” says Peter S. Fader, a marketing professor at the University of Pennsylvania. Anyone who has signed up for a gym membership that is paid for but not used understands the genius behind subscriptions.
There is another reason that marketers use them: When a product has built-in obsolescence, like new versions of software or a magazine with a short newsstand life, subscriptions extend the ownership period. “It removes the impedance to upgrading,” says Erica Mina Okada, an associate professor of marketing at the University of Hawaii.
[image by Tiago Rïbeiro]