You're Subscribed! - The Problems Subscription Services Have Solved and the New Problems They've Created

By: Kirk DouglasIt's not all that long ago computer software was purchased in boxes at specialty stores, our music was collected on tape or compact disc and web services were something mostly deployed at enterprise level or at the hands of a contracted webmaster.Over the years, we've adapted many physical mediums to take on the job of software and entertainment. We put trust in our business representatives and network IT administrators to provide us with web services and technology support. We relied heavily on specialty stores and representatives to deliver said goods and services, often with little or no input from end-users on their distribution and implementation.But in today's world - one heavily driven by e-commerce, mobile and web technologies and endless entertainment options, we've arrived at a place quite different than what I had imagined in my early adulthood. The world we live in today is one with a plethora of options that are accessible to anyone with an internet connection and basic knowledge around how to use the products and services available therein. With this, we have more choice than ever. Many things customers want can be accessed with a few clicks and a credit card. Signing up for a subscription to explore your favorite hobby or get your business up and running has never been easier. But all of this comes at a cost, and i’d argue it’s a buffet of convenience that might also require some sacrifices for both the user and the business providing the service.Twenty years ago, if I asked someone to tell me the first word that came to mind after saying the word subscription, I’d have been likely to hear something like “magazine” or “newspaper” in response. By today’s standars however, I could expect to hear anything from “Netflix” to “Spotify” or “Office 365” and anything in between. You might be reading much of your web news from sites hosted by Squarespace. Or have a roomate who’s joined the Dollar Shave Club. Heck, you might have found your last date with a Plenty of Fish membership.These types of subscriptions are so commonplace at this point that I’d put money on most people I know being subscribers to at least one recurring online product or service. Perhaps a web service, a technology advisor for your business or just basic entertainment. We now have so many options available to keep us engaged by way of recurring payments and microtransactions. How exactly did we get here, and what are the costs?The short answer: thievery. I could harken back to the beginnings of peer-to-peer networking, illegal file-sharing, and pirated software. We could relive the days of Napster and Limewire among other peer-to-peer utilities and I could give a history of how the software and music industries came to shape our current state of products and services; but I won’t do that, the gist of what happened leading us to our current-day subscription models is a story many of us already know.It’s a little something like this: Internet and the people using it, outgrew industry. Industry fell at the knees of internet. Internet matured. Industry rebuilt and became dominant on the internet. Industry and internet won together. Everyone is a subscriber.Overly simplified, yes; but true. As the growth of internet outpaced what businesses were willing to do online, users took to the web and did for themselves what software and entertainment industries would later come to rely on. Product serial keys, MP3 files, books and finally videos were all liberated by internet technology and users sharing over peer-to-peer protocols. A practice that spurred reactions that corporations eventully couldn't ignore.I’ll spare you the commonly referenced story of how ‘iTunes saved the music industry' — a bit that is so often pointed to as a major catalyst. But there is indeed a reason so many point to that example. The types of industry most heavily affected by piracy eventually came to respond by leveraging the web and adapting to online business models. Music was just one such industry. One could easily argue that these industries weren't paying close enough attention to what users wanted and how they were going about getting their needs satisfied. Users resorted to piracy and it took tech companies like Apple, Google and Amazon to set examples of how to monetize products and turn offline business markets into successful online ones.The internet has matured in its offerings. Not only is more attention than ever being payed to who wants what and how they might want to get it, but every major player in the game is offering products and services online vying for our attention - and our money. Many businesses have turned to subscription models to create sustainable software and service offerings and buck any future trends that might lead users back toward piracy.Big-box software doesn’t rake in what it used to as less expensive mobile device software and free online options continue to gain ground. Meanwhile, development costs and maintenance for large software firms that remain are still high. Moving software applications from a ‘one-time-buy’ model to a subscription model ensures future development and recurring income for developers and firms that may not otherwise be sustainable.So here we are, but are users in a better position than we were a decade ago? I took to my bank statement to see. Reflecting on the last thirty days of transaction history here’s what I found myself spending in online offerings:Evernote Premium: $5.99Microsoft Office 365: $6.99Adobe Creative Cloud Full Suite: $29.99 (discounted, normally $49.99/mo)Apple Music: $9.99Netflix: $8.99Feedbin: $3.00One thing is for sure. For better or worse, I am spending a lot of money in subscription services. That’s $64.95 for software/services and entertainment. This doesn’t include my cell phone bill, gym membership, cable bill, home utilities, rent and so on… and I find it interesting. I’m spending $65 per month that I was not spending just a few years ago.The up-side? My software is always up-to-date. My information and entertainment is largely accessible anywhere. I can do documents and take notes on the go across Mac and PC, desktop, laptop, iPad and smartphone. There’s a lot of opportunity to easily fit these products and services into my life because of it. It’s a level of convenience that didn’t exist before the internet and i’m generally happy to take part.But at what point does it end? I can think of at least three or four other services I might add to the above roster if money were no object. I can also think of how many times I had to cancel Netflix, let my Office membership or Evernote account lapse just to keep a few extra bucks in the budget when needed. I have to wonder if the subcription model is ultimately best for me as the end user and I know that I am not alone in this thinking. There’s a reasonable amount of uncertainty around how these pricing models might work once mature. Might they ever be bundled? Will prices come down? I don’t have the answers, but we can speculate on the possibilities.Think about television for example. Modern cable television came together as a result of content being cultivated by early satellite and cable distribution and their cable network partnerships. Over time, observing viewing habits from early adopters and seeing what people wanted to watch shaped the content that we see today. This is what spawned the idea of ‘bundling’ within cable providers. Recording viewership habits led to assessments of what people want and the categorically different types of viewers watching. This data helped create teirs and bundles, premium channels and themed networks. I can’t help but wonder if someone is thinking of ways to help me relax my monthly expenses. Will services like the ones I pay for reach a state of being bundled?In some ways we are already seeing it happen. Just last week Google announced YouTube Red, a subscription service priced at $9.99 per month allowing YouTube users to watch video content ad-free and save content for offline viewing. It wasn’t immediately obvious, but it turns out the service will include Google Music all-Access. This makes Google among the first in entertainment to bundle differently branded services under the same corprate umbrella. Until now, Youtube and Google Music (both Google properties) were kept seperate.Google may be up-and-coming in the entertainment services category but the company certainly isn’t the only one to make such moves. We’ve seen this happen in software already with Microsoft bundling the entirety of Office, Adobe offering multiple bundles of individual apps as well as their entire Creative Suite. Squarespace, the popular internet hosting and e-commerce facilitator offers a variety of products to suit your web-building needs. But we have yet to see offers cross company lines.What if they teamed up? Might there be a future in store where Adobe, Squarespace and Microsoft partner to offer a suite of products for creative business persons? An outlet combining creative, office software and online web presentation into one serve-all plan? It sounds a bit far-fetched but I wouldn’t discount the idea entirely.As we move forward with these subscription models, I can’t be certain where we are today is better, albeit more convenient. And i’m not certain that concern will be addressed definitively anytime soon. For now it feels a little like i’m paying for tiny pieces of a puzzle that I can’t quite finish. The end result is a picture I haven’t seen yet, and I feel a bit like i’m waiting on the smarts of tastemakers in Silicon Valley to show it to me.There are some obvious gains in obtaining recurring user payments for the software industry. People like me are paying for products and services on an ongoing basis, with money that otherwise might not have been spent in such ways. Myself and many others I know have gone long periods of time without purchasing software at all. Using an old version of software or a friends license key is still possible, but harder and harder to do as time goes on. Moving to subcriptions present an opportunity for businesses to regain old customers and get new ones on board with their offerings but what do I gain long-term?Regardless, perhaps subscriptions put consumers and businesses on a more level playing field here. I continue to pay and the companies providing me service continue to make great products. If that relationship faulters, one or both of us step away and onto the next thing, which may or may not be good. Its a relationship whos future i’m not entirely confident about but for right now it seems to work and I can only hope that when the time comes to give user feedback and suggestions, an inevitable part of every relationship, that my voice will be heard.As we find ourselves introduced to further services and convenience offerings, perhaps we should ask ourselves which ones we need most. Subscriptions are likely here to stay, but the story of how and in what form is one yet to be told.