A Subscription Model For Everything

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.

New York Times: “Looking at Life as One Big Subscription”

[image by Tiago Rïbeiro]