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Subscription Culture: You No Longer Own Anything

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Most financial experts agree that if you need a car, buying is almost always a better financial decision than leasing. Even if you have to borrow money for the purchase, traditional financing is a better option than making payments for a couple of years and having nothing to show for it unless you’re willing to pay even more. The same attitude leaves home renters with the feeling that they’re throwing money away when compared to homeowners, but the analogy isn’t completely accurate.

Subscription payments — recurring monthly or annual payments — have a place. Consumers pay for certain services on a subscription basis. Newspapers, magazines, and television are all traditional media-based services that operate their businesses using subscriptions. In return for a monthly fee, consumers receive new media content, on-demand or on a regular schedule. Media companies are increasingly using subscription programs as a replacement for selling individual items, and it’s great for them. Rather than one-time income, companies are setting up systems that generate a stable income stream. In theory, these companies can then put the guaranteed revenue into the development of more content.

But for more and more companies, the subscription model is just a big cash cow. Organizations claim that their customers prefer the model over one-time purchases of content, and that might be true. People like when the things they consume cost less money up-front, despite a long-term draining of financial resources. Companies are coming up with clever ways to turn products into services, services consumers will pay for on a recurring basis instead of products consumers will own.

When I would find a musical artist I like, I used to buy his or her albums. The music would then be mine, to listen to whenever I like, without advertising interference, forever. I could do whatever I like with recording, including sharing it with friends, as long as I didn’t cross a legal line in terms of copyright infringement. This arrangement worked well for me and millions of other consumers.

Maybe due to the development of digital media and increased unauthorized duplication and distribution, the music industry needed to find a way to change its model. They tried digital rights management, and that was a complete failure. The music industry has its solution: subscription service. With a subscription to a streaming music service, consumers never own the music they buy (though that option is still available).

Music streaming and movie streaming doesn’t seem to be a bad value compared to what you might spend on buying media you’d like to enjoy on a repeat basis, but you leave control in the hands of the media supplier. If they want to remove your access or increase your monthly subscription fee, you lose everything you “bought.” If I start relying on Netflix streaming rather than buying personal copies of films I enjoy, if I decide to cancel my Netflix subscription, I end up with nothing to show for my hundreds or thousands of dollars spent on the subscription except memories of sitting in front of a television screen.

Leaving control of personal media in the hands of the companies that provide it has already caused problems. Customers of the Kindle book-reader have seen Amazon change or erase purchased digital copies of books. You don’t own anything when you buy books with a Kindle account or a similar service. The financial model is a little different for consumers, and in this case you do pay a price for each piece of media which is then supposed to be “yours,” but you’re severely limited in your own control of that piece of media.

A few months ago, Adobe Software, the maker of PhotoShop and other important software for media professionals, decided to stop its long-time process of selling software updates each year. The company now offers its most popular software in a subscription model only. “Software as a service” is the now industry-standard model of requiring users to pay an ongoing fee — effectively renting software rather than buying it. It’s quite profitable, primarily because most consumers of software are actually businesses, and it’s much easier for businesses to justify an expense than it is for hobbyists or people who do not make money from their use of the software.

The end result of this is that consumers decreasingly own what they consume. There is no asset received in return for spending. With a subscription service for music, I’m no longer building a collection of CDs that I could at some point in the future sell (at a great loss) if I were desperate for cash. Maybe decreasing clutter, eliminating “stuff,” is a good thing, but even in this subscription culture my clutter doesn’t actually seem to be decreasing. (Maybe that’s because I still prefer to own my own media.)

You can see the changes. Quicken may be the financial software of a previous generation, but it’s still what I use. At one point, I could buy one version of Quicken for $20 and I could theoretically use it forever. Then Intuit introduced features that expire after a few years, and perhaps rightly so, stopped supporting versions older than a few years. When Mint.com was introduced, it followed the software as a service model. Today it’s free, and it doesn’t offer nearly the same feature set as Quicken, but it sets the company up to eventually replace the buy-and-upgrade Quicken model with a subscribe-indefinitely model. The company is on that path with QuickBooks, accounting software for businesses, so it wouldn’t surprise me if Quicken followed that model within a few years.

In the case of software as a service, the cost for me as a consumer, and probably you, will increase greatly. It won’t feel bad because each payment is lower than the traditional one-time payment. And as any late-night infomercial marketer knows, it’s that advertised initial price point that drives sales, not contemplation of the total cost.

Are you fine with the gradual transition to subscriptions for everything you use? Is this just an inevitable progression of business economy? Is there enough dissatisfaction with this type of payment plan for the market to generate alternatives or will consumers just smile as they pay out more money for less substance over time?

Published or updated August 29, 2013. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar Meghan

I’m okay with it for books that I know I will only read once. The reduced price of the Amazon Kindle is about what a book would cost if I bought the hard copy, read, and then sold it (I think). Now I just don’t have to worry about disposing of the book and no paper is wasted on something that may only be read once (I read a scary stat about how many books never get finished at all).

For music, I still buy CDs. I don’t purchase movies or do Netflix but may eventually do a TV service of some sort. Maybe not?

I’d rather own and have to buy updates to software. Some of us don’t need or want the latest and greatest. My laptop is 8 years old and works just fine. Some of the software is almost as old as the machine.

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avatar Cru

This is one of my primary reasons for working toward a dropout from society.
I used to love this stuff, but here on the eve of my 30th it all seems so awry. It had been building for some time, but as a designer Adobe was the straw that broke my camel’s back. I’m going inkscape/gimp/blender when I’m not at work, saving all of my cash, and buying cheap land in the mountains outright. I’ll let the people that love subscriptions subscribe to my vacant townhome’s mortgage in the form of a rent.

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avatar Insourcelife

No problem for me. My music is on my computer’s hard-drive which is backed up. I don’t even have a cd player anymore so I certainly don’t want any CDs. I’m fine with streaming movies online instead of buying and storing all the DVDs. I rarely find myself wanting to re-watch a movie since there are plenty of new ones to choose from. As far as subscriptions go – it’s a drain just like you said so I do not subscribe to any pay as you go services for software, music or video. My HTPC has a fast connection to the internet and there is always a ton of stuff to watch/listen to out there.

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avatar CeridianMN

I’ve been watching and lamenting this for a couple years now. It really is a by-product of the digital era from what I can tell. In some respects it could be good. We will leave less junk to our kids then our parents leave to us for instance. On the other hand, we won’t be leaving as many treasures to them. Generally speaking non of these licenses are transferable, so you can’t leave your music collection to your kids for instance. You don’t own it, just agree to a license by their terms.

As Meghan pointed out stuff that was bought 5 years ago digitally can still work just fine. In fact, I bet I could fire up my old Amiga 500 and the word processing program that came with it and create a document just fine. I used these in the early 90′s for school. With today’s models the maker of the software could decide the old version is no longer supported, and turn it off. Not just stop updating it, but actually turn it off so to get the same functionality you have to buy/subscribe to the new one. This is planned obsolescence to a whole new level.

I closing I’ll leave you with this thought. Many times the various digital industries try to compare their products to physical products. “You wouldn’t steal a CD so why would you download a song” is one that comes right to mind. Consumers buy into this too. We think “I bought my copy of Adobe I can use it how I want.” It has become relatively normal to think of digital products as physical. What if we didn’t though. If you sit back and think about it, isn’t downloading a song a lot more like lighting your torch from someone else’s than it like stealing their torch? When you buy a digital copy of something isn’t it more like someone lit your torch for a fee than they handed you a whole new torch from their inventory of torches? What if as a society we started to treat digital goods more like fire and less like torches?

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avatar Brad

I don’t think the analogy of digital goods being like fire rather than a torch is fair because you’re not considering all the work that went into making the product. Many people spent countless hours working to create the final product and they deserve compensation for their effort.

I personally like the subscription model for entertainment, though I prefer the option to buy or rent. I feel that film and television are, for the most part, single experiences that I enjoy once and then rarely return to so I don’t feel the need to own the content. And while I don’t subscribe to any music services, it is something that I have considered because it allows for more exploring with different styles of music that I wouldn’t necessarily be exposed to with an ownership model. If there is an album, movie, or television show that I really want to own, then that option is still available.

It hopefully doesn’t have to be an either/or situation.

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avatar Cru

You only prepare the fire once, just like the digital good. You need a product (torch) to enjoy it, but you most likely already have it in some form or another.

Firebuilders should be paid a far larger lump sum from the get-go. The digital goods should be drivers of commercialism (ad supported), so that way the artist is paid, and the consumers can spread it around because it helps the middle-man’s (advertiser) bottom line.

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avatar Bryce @ Save and Conquer

I am always leery of recurring charges. Obviously, some things like utilities must be paid for as you use them, and I’m OK with that model for Netflix and TV cable. But renting software? Microsoft keeps trying to push this model, too, for its Office Suite and even for Windows. Luckily, the tests they’ve run show that too many people would balk and use other software.

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avatar No Waste

I was just pondering whether I would ever buy music again, the alternative being subscription based.

Heck, some of it is free and outstanding.

But I don’t know if I’m ready for that.

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avatar impermanent

This came up recently on another blog I read. A couple lived together and shared all their possessions – including their itunes account. Now they’ve separated – and it’s there is no mechanism to split the account and divvy up the purchases from the past 5 or 10 years.

I don’t trust any company who says they will hold my digital purchases ‘safely’ for me – when I buy Kindle books, they get downloaded to my hard drive, and backed up.

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avatar Tara @ Streets Ahead Living

I can’t believe Adobe is doing that! I REFUSE to buy software based on a monthly service fee. If that’s the way they’re going, I would move towards other software. Perhaps Quark Xpress will get a resurgence again?

I see Microsoft Office has the yearly fee but then also still sell MS Office for keeps. I can see the benefits to doing a monthly fee… lower upfront cost, continual upgrades… but considering that small businesses often buy a software once and can go a few years without upgrading (my school still uses InDesign 4) paying a subscription would cost much more to those people in the long run.

Also, regarding the Kindle… I never got into the Kindle mania… I never get why people are so excited to buy a proprietary digital product. I always recommend e-readers or Android based tablets that can use the epub format. Universal with true ownership is always the way to go.

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avatar Funny

This is an interesting post, and very interesting responses from readers, all of whom (i expect) are about a century younger than me.

I do NOT like the prospect of having to subscribe to Microsoft Office products. Not that I’ve loved MS Office for years and years, but by and large the program functions for-freaking-ever and so it’s been possible to evade having to upgrade — the beauty of the Mac, of course, is that MS neglects Apple so shamelessly that I’ve been able to dodge the hateful “ribbon” lash-up all the way down to this very day.

On the other hand, I do use the Quicken online subscription service. Some time ago I abandoned Quicken and started using Excel. However, my current accountant discovered that Quickbooks Online will allow her to access clients’ accounts, and so we set up both personal and bidness accounts. This allows her to ride herd on my English-Major Bookkeeping activities, to straighten out the eccentricities before they cause major headaches, and to crank out tax reports without much grief. Compared to what I was having to pay my beleaguered former tax lawyer to figure out my books once a year, it’s saving me a TON of money on tax prep,

So where Quickbooks is concerned, I think the subscription model is worth the money. As for music, I’m not one of those people who has to be surrounded by noise at all times & prefer to listen to music in concert. There’s an awful lot of free music on the Internet these days…

“No deep links or business URLs are allowed.” What is a “deep link”?

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avatar Ivan Widjaya

I think that it still depends on the item being leased. For me, I’d still prefer that a car or a house is mine. But for items like information and other forms of content, then leasing is not really a problem. Same is true for items that I am going to use for a limited time like a wedding dress or a dress for an event.

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avatar Evan

It feels like it is impossible to get away in our society for those not looking to be extreme:
- Cell Phone
- Triple Play Package
- Insurances
- leases/finances

I think if you can create efficiency in those (i.e. pay the lowest for those items) keeping your monthly nut down you are ahead of the game.

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