12 ms·

Subscribers are the new, new thing in business

135 points by kawera 9y ago

PeterStuer 9y ago
The real secret in the formula is perpetual billing. Surprisingly few people cancel their contract even long after they stopped consuming the services. Money for nothing!
- baxtr 9y ago
  Always use a credit card as payment method. At least, it has an expiration date, which will force you into rethinking your subscription
  - crispyporkbites 9y ago
    This is the only way I could get amazon to stop charging me after I lost my 2FA token.
    - TeMPOraL 9y ago
      Reminds me, I still haven't figured out how to unsubscribe from Amazon Video (the thingie that can let you stream shows, but is not Amazon Prime, as the latter is not available in my country). I've been paying ~$5/mo for the past few months for nothing, just because I can't find the appropriate area in account settings. Fortunately, my card expires soon.
      - shakna 9y ago
        It's the second thing on the first page of "Account and Settings', 'End Membership'. Hoping the below link takes you straight into the process. https://www.primevideo.com/settings/your-account/confirm-cancel/ https://www.primevideo.com/settings/your-account/confirm-can...
        TeMPOraL 9y ago
        Didn't lead me directly, but I managed to click around that page and end up at the right page where there was "End Membership" button that finally worked. Thanks! I owe you a coffee.
  - cimmanom 9y ago
    Since the credit card issuer just provides a new card with a new expiration date when the expiration date approaches, many payment processors have a facility for auto-updating cards upon expiration. I believe the subscription business I work for has a 75% recovery rate for those cards.
    - judofyr 9y ago
      Isn't the CVV/CVC updated as well?
      - cimmanom 9y ago
        It's not needed for recurring charges once the processor already has the card number, any more than you have to re-enter it each month to authorize the ongoing charges.
  - astura 9y ago
    Recurring charges are more often than not automatically updated when the card expires. https://mobile.datamation.com/columns/executive_tech/article.php/3607996/Credit-Card-Expiration-Dates-Are-Obsolete.htm https://mobile.datamation.com/columns/executive_tech/article... Even when you report the card as lost or stolen, sometimes recurring charges can somehow still be charged. Hulu was able to change my Citi card that I reported lost for three months. They sent me an email saying it was a courtesy and please update my payment to ensure no loss of service. I let it go to see how long it would change it.
    - purple-again 9y ago
      This is a risk decision. I’ve been buying games on steam with a credit card that expired 5 years ago. Just did it last night. I chuckle everyone I see the address pull up. I get the game and when I check my real, diffrent numbered card from the same provider, the charge is there. I also have a perfect payment history with Steam dating back to the day it rolled out. I’m sure I could buy a game, initiate the easiest charge back of my life, and then enjoy my steam account forcing me to update my card the next time I try and make a purchase.
      - dasil003 9y ago
        If you issue a chargeback my guess is they lock your account immediately.
  - vinceguidry 9y ago
    Or PayPal. When NYT wouldn't let me cancel without a phone call, I simply canceled the sub via PayPal. They sent me nasty collection agency-style "your account is past due" emails before finally canceling, 2 months after I stopped paying them. I now pay careful attention to cancellation procedures when signing up for stuff.
    - vitorfs 9y ago
      I had the same issue with NYT. I find it terrible services that doesn't allow you to cancel subscription without talking to someone. PayPal is a great option for services that support it. At least you can cancel whenever you want. One of the banks I work with let you create a virtual credit card number associated with your physical credit card. You can remove it and create a new one at any time, without having to request a new physical card. So I try to use it strategically nowadays. In the worst case, I just cancel the virtual card.
    - Terr_ 9y ago
      Bojack Horseman had a whole episode partly about the lengths newspapers will go to to keep you from cancelling your subscription. The person on the phone ended up being a ridiculously empathetic and impromptu therapist for most of the episode, but here's the punchline: https://youtu.be/Ml94NgOFxxE?t=1m22s https://youtu.be/Ml94NgOFxxE?t=1m22s
    - distances 9y ago
      > When NYT wouldn't let me cancel without a phone call, I simply canceled the sub via PayPal. They sent me nasty collection agency-style "your account is past due" emails before finally canceling, 2 months after I stopped paying them. I don't know how widespread problem this is, but definitely affects Germany too: companies have asymmetric requirements for signup and cancellation. We should get legislation that lets consumers cancel with the same method they used to subscribe. In Germany companies won't accept non-payment as cancellation though, and will send your bill to collections.
- Cthulhu_ 9y ago
  I think in addition it's about shareholder value - I would argue that telling your shareholders and investors "We have 1000 paying subscribers" would be considered more valuable than "We have made 1000 sales", even if the total value of either is equal. Subscribers have a lot of "lag", as the parent says, with a lot of people continuing to pay for a subscription they don't use anymore, or where they have to sit out a subscription for a full year.
- ajeet_dhaliwal 9y ago
  Long term this isn't good for a business though. I want customers to find my service valuable and use it everyday otherwise it shouldn't exist.
trigger 9y ago
Ironic that to read this article I have to subscribe to the Enconomist.
- keithnz 9y ago
  Funny thing is, the article is there, I just deleted all the paywall elements in chrome then turned off the display:none styling on the blog-post__text element
  - crispyporkbites 9y ago
    Is this legal?
    - h2onock 9y ago
      Your browser has downloaded it anyway, so you may as well read it. If they cared that much then they'd hide it better.
      - xg15 9y ago
        I'm not a fan of paywalls and believe a user should be allowed to do what they want with the data the browser downloads - but in general "if they really cared, they'd do more to stop me" is not how you should approach questions of legality.
        h2onock 9y ago
        I've paid for my internet connection and content that they willingly put on their server without any security protection has been downloaded to my computer. Now that I have that content I'll read it if I want to.
        xg15 9y ago
        Absolutely - and in the given case, it's perfectly fine to do so because it's in fact legal (to my knowledge). However, if you e.g. wanted to record a Netflix stream from the EME applet on their website, you could argue the same moral justifications - however, now you'd be breaking a law (circumvention of protection devices) and it wouldn't be legal, no matter how stupid the law is.
vhost- 9y ago
There's a bright red bar on the bottom with buttons to subscribe to the economist for 12 weeks :-D
vs2 9y ago
I tried to read the article but I hit my max number of free articles a week Have you ever tried to unsubscribe from The Economist? You have to phone them up!
- tonyedgecombe 9y ago
  Even phoning them is hard work, I might have restarted my subscription at some point but having gone through that I won't ever be subscribing again.
- dx034 9y ago
  You even need that to change your subscription. I love their articles but the subscription service is the worst I've encountered so far.
- abhishekjha 9y ago
  You can delete the cookies to read them.
- mikestew 9y ago
  That's why I subscribe to The Economist through the iOS App Store. A couple of clicks, and unsubscribed/resubscribed. I've used their digital subscription service straight from the publisher, and yeah, what a pain.
mnm1 9y ago
With companies that offer a free month such as Netflix, Amazon Prime, Hulu and others, yet offer little to no incentive to keep the service afterwards, the only thing that keeps people subscribing is the incredibly slight inconvenience of signing up again and again every month with a new email. Spotify on the other hand does offer a valuable service because remembering history seems to me to be more important in music, where one often listens to the same music over and over again versus Netflix where one is unlikely to watch things multiple times and the few times one does that, it's fairly easy to remember the titles. I wonder if the run-of-the-mill customers will start figuring this out and if so, how these companies will respond. Until then, it'll be easy to get a ton of free services at the slight cost--usually a few minutes--of signing up again and again.
- dazc 9y ago
  It's very easy to stop and start a Netflix or Prime subscription and, I believe, this is one of the ways they've managed to grow so quickly. I've subscribed to other media services a couple of times and the process of cancelling has put me off even thinking about trying it again.
jaggederest 9y ago
I think the thing that is most compelling about subscriptions is that it's much more difficult to extract e.g. $300 in lifetime value in a single transaction, versus over 10 months. That psychological barrier is really the root of the reason it's so effective, in the same way that free shipping drives online retail and "discounting" drives retail clothing stores.
xg15 9y ago
One of the main advantages free market systems have for consumers is ostensibly that you can freely choose, switch and combine products and services as you see fit. As such it's somewhat ironic that the article sees the main disadvantage of subscription models in that they don't combat "consumer illoyality" enough.
- golergka 9y ago
  Because it's written from a business point of view. You and business have interests that are partly aligned, partly in odds with one another. In terms of loyalty, I think it's a little bit of both.
  - xg15 9y ago
    Yes, that absolutely makes sense. Of course, from the providers' point of view, subscriptions are absolutely desirable and customer illoyality is a problem. I think what irked me was that the article somehow presented the advantages and disadvantages as absolute when in reality they only apply to one side. Though yes, of course, this is the "business" section, so maybe that makes sense in context.
    - ghaff 9y ago
      >from the providers' point of view, subscriptions are absolutely desirable It's fair to say that businesses mostly like subscriptions but balance against that a few factors. - Consumers often do not which can make it harder to acquire a customer in the first place. - It's an ongoing revenue stream that can be canceled at any time rather than a larger up-front purchase.
- mannykannot 9y ago
  If 'illoyalty' is intended to avoid the negative implications of 'disloyalty', I suggest that in this context, 'independence' is more appropriate than anything suggesting that customers owe some sort of allegiance.
- fbelzile 9y ago
tonyedgecombe 9y ago
As a consumer I really dislike subscription services, they quickly add up to a lot of money. I can see how it works for businesses but by definition that means its not so good for me.
- rahimnathwani 9y ago
  "I can see how it works for businesses but by definition that means its not so good for me." That seems to assume that transactions between businesses and consumers are zero sum games. It's possible for something to be good for a business and good for you. For example, I subscribe to The Economist. It's good for me (cheaper than buying individual issues, and cheaper that suitable-quality alternatives) and good for them (up-front payment, lower distribution costs).
  - amelius 9y ago
    But parent was speaking specifically about parent.
    - duggan 9y ago
      I think it's pretty reasonable to read the parent as making a general assertion about subscription models from a consumer's perspective, particularly as they began their comment with, "as a consumer" rather than "as tonyedgecombe." It's all well and good to say "well, I just mean for me, personally" but I'm not sure it's adding to the public discourse without any further qualification.
  - TeMPOraL 9y ago
    That works because they didn't lock the subscription yet. Compare subscription to Netflix vs. buying a movie on a DVD (and maybe ripping a personal backup copy). The former is a subscription - you stop paying (maybe because of financial emergency), no movie. The latter is a one-time purchase, after which you keep the thing you bought forever (so when shit hits the fan, you still can cheer yourself up with your favourite movie. I know I definitely prefer buying over renting/subscribing. Businesses prefer the reverse. It's a conflict of interest.
boffinism 9y ago
I don't get the last point in the article. Customers often have subscriptions to multiple, theoretically competing, services, sure. But why is that bad for subscription-based services? Surely that just means market share is easier to come by?
Dawny33 9y ago
This trend is fast catching up in India too, esp with the food delivery companies. Zomato's treats, Freshmenu's freshclub, Zomato's Gold, etc. Others would be MakeMyTrip's black.
DmitryOlshansky 9y ago
“You reached the limit of free subscription” The irony, now I can’t read about subscription addiction.
- stephengillie 9y ago
  "Learn how this one hacker cured his subscription addiction!"
taylodl 9y ago
It's ironic that I've reached my article limit with The Economist. Apparently it's a lifetime limit too, which means pretty soon we'll stop seeing posts from The Economist on HN.
- pwg 9y ago
  Are you sure that the 'tracking' is not simply a cookie in your browser that were you to delete the cookie, would reset the limit back to zero?
  - taylodl 9y ago
    It probably is, but so what? The Economist has made it clear they don't want me reading their material. So I'm obliging.
- astura 9y ago
  Try incognito mode
shubhamjain 9y ago
Subscription is a long-lasting, predictable revenue stream. Even if one-off sales bring more revenue the subscription system fares much better. I was listening to Sam Harris' podcast recently, and they seem to have discontinued the one-time donations entirely. You don't want to deal with the instability of exceedingly high revenue one month, and barely any in the other. Another thing I noticed is that with subscriptions in place, you can understand—and grow—your customers in all sorts of ways. For eg, Netflix has analyzed that "if you have watched 15 hours of content per month, you're 75% less likely to cancel. If they drop below 5 hours, there is a 95% chance they will cancel." [1] So, now, they only have to figure out how to hook their users to watch Netflix for that many hours. I don't think it's very much possible in a traditional business setting. [1]: https://blog.kissmetrics.com/how-netflix-uses-analytics/ https://blog.kissmetrics.com/how-netflix-uses-analytics/
hownottowrite 9y ago
Cached: https://archive.is/wFAL4 https://archive.is/wFAL4
dosycorp 9y ago
I like this article but my favorite part was the Economist header subscribe button, a constant fixture of my read.
pibefision 9y ago
New new thing? Every telco of this world was a subcription service since 25 years ago...
Gaussian 9y ago
Good to see that the Economist is totally on top of the trends sweeping through commerce in 2014.
sametmax 9y ago
We need bundles of subscriptions. If I pay 10$ for netflix, you can't pay 5 for a todolist. But i would pay 15 for netflix + todolist + calendard + others things.
- burlesona 9y ago
  This is coming, I think it's just hard work to be an effective aggregator. SetApp[1] is a good example of what I think will be more common in the future, plus things like TMobile paying for Netflix. [1]: https://setapp.com https://setapp.com
- na85 9y ago
  Bundles are the reason that TV subscriptions got so odious. Setapp and other businesses will inevitably game the bundles to maximize profits and once again we'll be in a user-hostile environment. Want netflix? You have to subscribe to the uber-ultra-premium-HD bundle which costs $200/mo and comes with 500 other apps that you'll never use, but think of the value!
- hinkley 9y ago
  I don’t know about where you are, but here there are two cellular networks that give you a 480p Netflix account for the life of your contract. I mean it’s not gonna cause you to cancel your netflix subscription but you might cut back on the simultaneous streams to save a few bucks.
  - sametmax 9y ago
    My cellular network cost 25$ a month, I don't see where they would fit the netflix contract cost in there.
    - hinkley 9y ago
      It’s probably cross marketing. Each side takes a couple dollars of loss for the increased in signups. Like when amazon made a partnership with coin star. If you get an amazon gift card you don’t pay the coin counting fee, and amazon pays coinstar half the fee value.
tjic 9y ago
Website won't let me read the article without signing in. Thesis proven!
cheschire 9y ago
Subscription models create a haves / have-nots divide, which is fine for some things, but seems immoral for journalism. Too bad that model's been around since long before the internet.
beegeezuz 9y ago
I hate subscriptions. I don't mind paying $5 for something, but that something is 20 different services that adds up to a lot of money. Everything is subscription-based these days, including mobile apps.
scarface74 9y ago
Now that I think about it. I have a lot of subscriptions... Hulu w/ no ads - $11.99 DirecTV Now - $35 Netflix - $2 (T-Mobile pays the base price. I pay for four connections.) PluralSight - $30 BackBlaze - $5 Office 365 - $99/year Amazon Prime - $129/year Resharper - $10/month Evernote - $3.99/month (I guess I could just Apple Notes) My son has a subscription to XBoxLive and Playstation Plus. My wife has an Apple Music subscription.
- whichdan 9y ago
  For what it's worth, if you consider that most people used to pay $60/mo for TV, that would easily cover Netflix, Hulu, Amazon Prime, BackBlaze, Office 365, Evernote, and Apple Music. That's a _lot_ of value. (This is more of a response to the other comment saying that subscriptions get expensive. You just had a nice enumerated list to work with!)
  - ajeet_dhaliwal 9y ago
    Agreed, the value I get is far higher than it was in the past.
  - scarface74 9y ago
    It's even better.... The total price of cable for us would be: - cable tv with the same subscription level ~$50 a month - 5 extra set top boxes (yes we have 6 TVs) - $50 - various fees (network access, regulatory, franchise fee) - $15 - HD Technology Fee - $10 The numbers may make less sense if we didn't have unlimited gigabit internet for $70 a month from AT&T. We also have unlimited Internet on our phones (and my iPad). In total $125 a month just fur TV. That's not to mention that our older son who doesn't live with us also gets to use Netflix and Hulu. Also, my wife has a split shift. When she isn't at the gym, she can watch content on her phone. I've made back in increased salary more than enough to make the $360 year for PluralSight worth it.
EADGBE 9y ago
It’s great when this model takes over; no one will own anything anymore. Simply rent. The concept of equity is a thing of the past. Good luck retiring cheaply/at an appropriate age.
- radix07 9y ago
  Are you saying this model is gonna take over real estate in a new way and that we will lose our biggest potential source of equity? Or that we have so much equity to bank on from our old records, tapes, and discs? Or that this a new thing and that people haven't been retiring and using cable, phone or disposable news/media since forever ago?
  - EADGBE 9y ago
    It's more towards Volvo's Care [1] subscription plan than anything else (large amounts of money in return for convenience; a leased car, bundled insurance, maintenance subscription) - but yes - death by a thousand subscriptions. A subscription here and there isn't going to change anyone's mind, but a dozen or so subscriptions every month as long as you need the service (sometimes lifetime) surely comes out to more cost over time. [1] https://www.volvocars.com/us/cars/new-models/xc40/care-by-volvo https://www.volvocars.com/us/cars/new-models/xc40/care-by-vo...
    - radix07 9y ago
      Didn't see any mention of the Volvo Care thing, but leasing any car is typically a bad idea, Volvo is just packing more crap in for extra lazy people that like paying even more. I don't see the death of a thousand cuts thing currently. No one needs a dozen subscriptions. Our household has 3: Netflix, Amazon Prime, and Spotify. - Netflix is cheaper than buying 1 movie/month. - Spotify is cheaper than buying 1 album/month. - Amazon Prime is a net savings on shipping and trips to the store plus videos, books and music and whatever else in there... Comes out to an overall savings from most people's spending habits before these things were around, especially if you cut cable. What else does a typical family need to subscribe to that is draining all of their money?
grincho 9y ago
In software, at least, I've argued that subscription pricing is innately deceptive and, long term, deleterious to the quality of the product. It's a market distortion born of the App Store model, where it's difficult to charge for updates. And that, in turn, is an artificial constraint imposed by OS vendors who have an incentive to keep people on the latest OS (without breaking their apps). There's a full-length rant at https://www.grinchcentral.com/an-open-letter-to-subscription-software-authors https://www.grinchcentral.com/an-open-letter-to-subscription....
- burlesona 9y ago
  I respectfully disagree, at least that you can't generalize this to all software. For many products, incentives are better aligned for both the customer and the business if usage is based on an ongoing subscription. There are plenty of people who have spelled this out, but the recent switch of Ulysses (word processor) to subscription was one of the nicest explanations I've seen [1]. Sketch App also explained this when they made the switch, though perhaps not as eloquently [2]. [1]: https://medium.com/building-ulysses/why-were-switching-ulysses-to-subscription-47f80b07a9cd https://medium.com/building-ulysses/why-were-switching-ulyss... [2]: https://blog.sketchapp.com/versioning-licensing-and-sketch-4-0-8ad98783e9ba https://blog.sketchapp.com/versioning-licensing-and-sketch-4...

135 points by kawera 9y ago

The real secret in the formula is perpetual billing. Surprisingly few people cancel their contract even long after they stopped consuming the services. Money for nothing!

baxtr 9y ago
Always use a credit card as payment method. At least, it has an expiration date, which will force you into rethinking your subscription
- crispyporkbites 9y ago
  This is the only way I could get amazon to stop charging me after I lost my 2FA token.
  - TeMPOraL 9y ago
    Reminds me, I still haven't figured out how to unsubscribe from Amazon Video (the thingie that can let you stream shows, but is not Amazon Prime, as the latter is not available in my country). I've been paying ~$5/mo for the past few months for nothing, just because I can't find the appropriate area in account settings. Fortunately, my card expires soon.
    - shakna 9y ago
      It's the second thing on the first page of "Account and Settings', 'End Membership'. Hoping the below link takes you straight into the process. https://www.primevideo.com/settings/your-account/confirm-cancel/ https://www.primevideo.com/settings/your-account/confirm-can...
      - TeMPOraL 9y ago
        Didn't lead me directly, but I managed to click around that page and end up at the right page where there was "End Membership" button that finally worked. Thanks! I owe you a coffee.
- cimmanom 9y ago
  Since the credit card issuer just provides a new card with a new expiration date when the expiration date approaches, many payment processors have a facility for auto-updating cards upon expiration. I believe the subscription business I work for has a 75% recovery rate for those cards.
  - judofyr 9y ago
    Isn't the CVV/CVC updated as well?
    - cimmanom 9y ago
      It's not needed for recurring charges once the processor already has the card number, any more than you have to re-enter it each month to authorize the ongoing charges.
- astura 9y ago
  Recurring charges are more often than not automatically updated when the card expires. https://mobile.datamation.com/columns/executive_tech/article.php/3607996/Credit-Card-Expiration-Dates-Are-Obsolete.htm https://mobile.datamation.com/columns/executive_tech/article... Even when you report the card as lost or stolen, sometimes recurring charges can somehow still be charged. Hulu was able to change my Citi card that I reported lost for three months. They sent me an email saying it was a courtesy and please update my payment to ensure no loss of service. I let it go to see how long it would change it.
  - purple-again 9y ago
    This is a risk decision. I’ve been buying games on steam with a credit card that expired 5 years ago. Just did it last night. I chuckle everyone I see the address pull up. I get the game and when I check my real, diffrent numbered card from the same provider, the charge is there. I also have a perfect payment history with Steam dating back to the day it rolled out. I’m sure I could buy a game, initiate the easiest charge back of my life, and then enjoy my steam account forcing me to update my card the next time I try and make a purchase.
    - dasil003 9y ago
      If you issue a chargeback my guess is they lock your account immediately.
- vinceguidry 9y ago
  Or PayPal. When NYT wouldn't let me cancel without a phone call, I simply canceled the sub via PayPal. They sent me nasty collection agency-style "your account is past due" emails before finally canceling, 2 months after I stopped paying them. I now pay careful attention to cancellation procedures when signing up for stuff.
  - vitorfs 9y ago
    I had the same issue with NYT. I find it terrible services that doesn't allow you to cancel subscription without talking to someone. PayPal is a great option for services that support it. At least you can cancel whenever you want. One of the banks I work with let you create a virtual credit card number associated with your physical credit card. You can remove it and create a new one at any time, without having to request a new physical card. So I try to use it strategically nowadays. In the worst case, I just cancel the virtual card.
  - Terr_ 9y ago
    Bojack Horseman had a whole episode partly about the lengths newspapers will go to to keep you from cancelling your subscription. The person on the phone ended up being a ridiculously empathetic and impromptu therapist for most of the episode, but here's the punchline: https://youtu.be/Ml94NgOFxxE?t=1m22s https://youtu.be/Ml94NgOFxxE?t=1m22s
  - distances 9y ago
    > When NYT wouldn't let me cancel without a phone call, I simply canceled the sub via PayPal. They sent me nasty collection agency-style "your account is past due" emails before finally canceling, 2 months after I stopped paying them. I don't know how widespread problem this is, but definitely affects Germany too: companies have asymmetric requirements for signup and cancellation. We should get legislation that lets consumers cancel with the same method they used to subscribe. In Germany companies won't accept non-payment as cancellation though, and will send your bill to collections.
Cthulhu_ 9y ago
I think in addition it's about shareholder value - I would argue that telling your shareholders and investors "We have 1000 paying subscribers" would be considered more valuable than "We have made 1000 sales", even if the total value of either is equal. Subscribers have a lot of "lag", as the parent says, with a lot of people continuing to pay for a subscription they don't use anymore, or where they have to sit out a subscription for a full year.
ajeet_dhaliwal 9y ago
Long term this isn't good for a business though. I want customers to find my service valuable and use it everyday otherwise it shouldn't exist.

trigger 9y ago

Ironic that to read this article I have to subscribe to the Enconomist.

keithnz 9y ago
Funny thing is, the article is there, I just deleted all the paywall elements in chrome then turned off the display:none styling on the blog-post__text element
- crispyporkbites 9y ago
  Is this legal?
  - h2onock 9y ago
    Your browser has downloaded it anyway, so you may as well read it. If they cared that much then they'd hide it better.
    - xg15 9y ago
      I'm not a fan of paywalls and believe a user should be allowed to do what they want with the data the browser downloads - but in general "if they really cared, they'd do more to stop me" is not how you should approach questions of legality.
      - h2onock 9y ago
        I've paid for my internet connection and content that they willingly put on their server without any security protection has been downloaded to my computer. Now that I have that content I'll read it if I want to.
        xg15 9y ago
        Absolutely - and in the given case, it's perfectly fine to do so because it's in fact legal (to my knowledge). However, if you e.g. wanted to record a Netflix stream from the EME applet on their website, you could argue the same moral justifications - however, now you'd be breaking a law (circumvention of protection devices) and it wouldn't be legal, no matter how stupid the law is.

vhost- 9y ago

There's a bright red bar on the bottom with buttons to subscribe to the economist for 12 weeks :-D

vs2 9y ago

I tried to read the article but I hit my max number of free articles a week Have you ever tried to unsubscribe from The Economist? You have to phone them up!

tonyedgecombe 9y ago
Even phoning them is hard work, I might have restarted my subscription at some point but having gone through that I won't ever be subscribing again.
dx034 9y ago
You even need that to change your subscription. I love their articles but the subscription service is the worst I've encountered so far.
abhishekjha 9y ago
You can delete the cookies to read them.
mikestew 9y ago
That's why I subscribe to The Economist through the iOS App Store. A couple of clicks, and unsubscribed/resubscribed. I've used their digital subscription service straight from the publisher, and yeah, what a pain.

mnm1 9y ago

With companies that offer a free month such as Netflix, Amazon Prime, Hulu and others, yet offer little to no incentive to keep the service afterwards, the only thing that keeps people subscribing is the incredibly slight inconvenience of signing up again and again every month with a new email. Spotify on the other hand does offer a valuable service because remembering history seems to me to be more important in music, where one often listens to the same music over and over again versus Netflix where one is unlikely to watch things multiple times and the few times one does that, it's fairly easy to remember the titles. I wonder if the run-of-the-mill customers will start figuring this out and if so, how these companies will respond. Until then, it'll be easy to get a ton of free services at the slight cost--usually a few minutes--of signing up again and again.

dazc 9y ago
It's very easy to stop and start a Netflix or Prime subscription and, I believe, this is one of the ways they've managed to grow so quickly. I've subscribed to other media services a couple of times and the process of cancelling has put me off even thinking about trying it again.

jaggederest 9y ago

I think the thing that is most compelling about subscriptions is that it's much more difficult to extract e.g. $300 in lifetime value in a single transaction, versus over 10 months. That psychological barrier is really the root of the reason it's so effective, in the same way that free shipping drives online retail and "discounting" drives retail clothing stores.

xg15 9y ago

One of the main advantages free market systems have for consumers is ostensibly that you can freely choose, switch and combine products and services as you see fit. As such it's somewhat ironic that the article sees the main disadvantage of subscription models in that they don't combat "consumer illoyality" enough.

golergka 9y ago
Because it's written from a business point of view. You and business have interests that are partly aligned, partly in odds with one another. In terms of loyalty, I think it's a little bit of both.
- xg15 9y ago
  Yes, that absolutely makes sense. Of course, from the providers' point of view, subscriptions are absolutely desirable and customer illoyality is a problem. I think what irked me was that the article somehow presented the advantages and disadvantages as absolute when in reality they only apply to one side. Though yes, of course, this is the "business" section, so maybe that makes sense in context.
  - ghaff 9y ago
    >from the providers' point of view, subscriptions are absolutely desirable It's fair to say that businesses mostly like subscriptions but balance against that a few factors. - Consumers often do not which can make it harder to acquire a customer in the first place. - It's an ongoing revenue stream that can be canceled at any time rather than a larger up-front purchase.
mannykannot 9y ago
If 'illoyalty' is intended to avoid the negative implications of 'disloyalty', I suggest that in this context, 'independence' is more appropriate than anything suggesting that customers owe some sort of allegiance.
fbelzile 9y ago

tonyedgecombe 9y ago

As a consumer I really dislike subscription services, they quickly add up to a lot of money. I can see how it works for businesses but by definition that means its not so good for me.

rahimnathwani 9y ago
"I can see how it works for businesses but by definition that means its not so good for me." That seems to assume that transactions between businesses and consumers are zero sum games. It's possible for something to be good for a business and good for you. For example, I subscribe to The Economist. It's good for me (cheaper than buying individual issues, and cheaper that suitable-quality alternatives) and good for them (up-front payment, lower distribution costs).
- amelius 9y ago
  But parent was speaking specifically about parent.
  - duggan 9y ago
    I think it's pretty reasonable to read the parent as making a general assertion about subscription models from a consumer's perspective, particularly as they began their comment with, "as a consumer" rather than "as tonyedgecombe." It's all well and good to say "well, I just mean for me, personally" but I'm not sure it's adding to the public discourse without any further qualification.
- TeMPOraL 9y ago
  That works because they didn't lock the subscription yet. Compare subscription to Netflix vs. buying a movie on a DVD (and maybe ripping a personal backup copy). The former is a subscription - you stop paying (maybe because of financial emergency), no movie. The latter is a one-time purchase, after which you keep the thing you bought forever (so when shit hits the fan, you still can cheer yourself up with your favourite movie. I know I definitely prefer buying over renting/subscribing. Businesses prefer the reverse. It's a conflict of interest.

boffinism 9y ago

I don't get the last point in the article. Customers often have subscriptions to multiple, theoretically competing, services, sure. But why is that bad for subscription-based services? Surely that just means market share is easier to come by?

Dawny33 9y ago

This trend is fast catching up in India too, esp with the food delivery companies. Zomato's treats, Freshmenu's freshclub, Zomato's Gold, etc. Others would be MakeMyTrip's black.

DmitryOlshansky 9y ago

“You reached the limit of free subscription” The irony, now I can’t read about subscription addiction.

stephengillie 9y ago
"Learn how this one hacker cured his subscription addiction!"

taylodl 9y ago

It's ironic that I've reached my article limit with The Economist. Apparently it's a lifetime limit too, which means pretty soon we'll stop seeing posts from The Economist on HN.

pwg 9y ago
Are you sure that the 'tracking' is not simply a cookie in your browser that were you to delete the cookie, would reset the limit back to zero?
- taylodl 9y ago
  It probably is, but so what? The Economist has made it clear they don't want me reading their material. So I'm obliging.
astura 9y ago
Try incognito mode

shubhamjain 9y ago

Subscription is a long-lasting, predictable revenue stream. Even if one-off sales bring more revenue the subscription system fares much better. I was listening to Sam Harris' podcast recently, and they seem to have discontinued the one-time donations entirely. You don't want to deal with the instability of exceedingly high revenue one month, and barely any in the other. Another thing I noticed is that with subscriptions in place, you can understand—and grow—your customers in all sorts of ways. For eg, Netflix has analyzed that "if you have watched 15 hours of content per month, you're 75% less likely to cancel. If they drop below 5 hours, there is a 95% chance they will cancel." [1] So, now, they only have to figure out how to hook their users to watch Netflix for that many hours. I don't think it's very much possible in a traditional business setting. [1]: https://blog.kissmetrics.com/how-netflix-uses-analytics/ https://blog.kissmetrics.com/how-netflix-uses-analytics/

hownottowrite 9y ago

Cached: https://archive.is/wFAL4 https://archive.is/wFAL4

dosycorp 9y ago

I like this article but my favorite part was the Economist header subscribe button, a constant fixture of my read.

pibefision 9y ago

New new thing? Every telco of this world was a subcription service since 25 years ago...

Gaussian 9y ago

Good to see that the Economist is totally on top of the trends sweeping through commerce in 2014.

sametmax 9y ago

We need bundles of subscriptions. If I pay 10$ for netflix, you can't pay 5 for a todolist. But i would pay 15 for netflix + todolist + calendard + others things.

burlesona 9y ago
This is coming, I think it's just hard work to be an effective aggregator. SetApp[1] is a good example of what I think will be more common in the future, plus things like TMobile paying for Netflix. [1]: https://setapp.com https://setapp.com
na85 9y ago
Bundles are the reason that TV subscriptions got so odious. Setapp and other businesses will inevitably game the bundles to maximize profits and once again we'll be in a user-hostile environment. Want netflix? You have to subscribe to the uber-ultra-premium-HD bundle which costs $200/mo and comes with 500 other apps that you'll never use, but think of the value!
hinkley 9y ago
I don’t know about where you are, but here there are two cellular networks that give you a 480p Netflix account for the life of your contract. I mean it’s not gonna cause you to cancel your netflix subscription but you might cut back on the simultaneous streams to save a few bucks.
- sametmax 9y ago
  My cellular network cost 25$ a month, I don't see where they would fit the netflix contract cost in there.
  - hinkley 9y ago
    It’s probably cross marketing. Each side takes a couple dollars of loss for the increased in signups. Like when amazon made a partnership with coin star. If you get an amazon gift card you don’t pay the coin counting fee, and amazon pays coinstar half the fee value.

tjic 9y ago

Website won't let me read the article without signing in. Thesis proven!

cheschire 9y ago

Subscription models create a haves / have-nots divide, which is fine for some things, but seems immoral for journalism. Too bad that model's been around since long before the internet.

beegeezuz 9y ago

I hate subscriptions. I don't mind paying $5 for something, but that something is 20 different services that adds up to a lot of money. Everything is subscription-based these days, including mobile apps.

scarface74 9y ago

Now that I think about it. I have a lot of subscriptions... Hulu w/ no ads - $11.99 DirecTV Now - $35 Netflix - $2 (T-Mobile pays the base price. I pay for four connections.) PluralSight - $30 BackBlaze - $5 Office 365 - $99/year Amazon Prime - $129/year Resharper - $10/month Evernote - $3.99/month (I guess I could just Apple Notes) My son has a subscription to XBoxLive and Playstation Plus. My wife has an Apple Music subscription.

whichdan 9y ago
For what it's worth, if you consider that most people used to pay $60/mo for TV, that would easily cover Netflix, Hulu, Amazon Prime, BackBlaze, Office 365, Evernote, and Apple Music. That's a _lot_ of value. (This is more of a response to the other comment saying that subscriptions get expensive. You just had a nice enumerated list to work with!)
- ajeet_dhaliwal 9y ago
  Agreed, the value I get is far higher than it was in the past.
- scarface74 9y ago
  It's even better.... The total price of cable for us would be: - cable tv with the same subscription level ~$50 a month - 5 extra set top boxes (yes we have 6 TVs) - $50 - various fees (network access, regulatory, franchise fee) - $15 - HD Technology Fee - $10 The numbers may make less sense if we didn't have unlimited gigabit internet for $70 a month from AT&T. We also have unlimited Internet on our phones (and my iPad). In total $125 a month just fur TV. That's not to mention that our older son who doesn't live with us also gets to use Netflix and Hulu. Also, my wife has a split shift. When she isn't at the gym, she can watch content on her phone. I've made back in increased salary more than enough to make the $360 year for PluralSight worth it.

EADGBE 9y ago

It’s great when this model takes over; no one will own anything anymore. Simply rent. The concept of equity is a thing of the past. Good luck retiring cheaply/at an appropriate age.

radix07 9y ago
Are you saying this model is gonna take over real estate in a new way and that we will lose our biggest potential source of equity? Or that we have so much equity to bank on from our old records, tapes, and discs? Or that this a new thing and that people haven't been retiring and using cable, phone or disposable news/media since forever ago?
- EADGBE 9y ago
  It's more towards Volvo's Care [1] subscription plan than anything else (large amounts of money in return for convenience; a leased car, bundled insurance, maintenance subscription) - but yes - death by a thousand subscriptions. A subscription here and there isn't going to change anyone's mind, but a dozen or so subscriptions every month as long as you need the service (sometimes lifetime) surely comes out to more cost over time. [1] https://www.volvocars.com/us/cars/new-models/xc40/care-by-volvo https://www.volvocars.com/us/cars/new-models/xc40/care-by-vo...
  - radix07 9y ago
    Didn't see any mention of the Volvo Care thing, but leasing any car is typically a bad idea, Volvo is just packing more crap in for extra lazy people that like paying even more. I don't see the death of a thousand cuts thing currently. No one needs a dozen subscriptions. Our household has 3: Netflix, Amazon Prime, and Spotify. - Netflix is cheaper than buying 1 movie/month. - Spotify is cheaper than buying 1 album/month. - Amazon Prime is a net savings on shipping and trips to the store plus videos, books and music and whatever else in there... Comes out to an overall savings from most people's spending habits before these things were around, especially if you cut cable. What else does a typical family need to subscribe to that is draining all of their money?

grincho 9y ago

In software, at least, I've argued that subscription pricing is innately deceptive and, long term, deleterious to the quality of the product. It's a market distortion born of the App Store model, where it's difficult to charge for updates. And that, in turn, is an artificial constraint imposed by OS vendors who have an incentive to keep people on the latest OS (without breaking their apps). There's a full-length rant at https://www.grinchcentral.com/an-open-letter-to-subscription-software-authors https://www.grinchcentral.com/an-open-letter-to-subscription....

burlesona 9y ago
I respectfully disagree, at least that you can't generalize this to all software. For many products, incentives are better aligned for both the customer and the business if usage is based on an ongoing subscription. There are plenty of people who have spelled this out, but the recent switch of Ulysses (word processor) to subscription was one of the nicest explanations I've seen [1]. Sketch App also explained this when they made the switch, though perhaps not as eloquently [2]. [1]: https://medium.com/building-ulysses/why-were-switching-ulysses-to-subscription-47f80b07a9cd https://medium.com/building-ulysses/why-were-switching-ulyss... [2]: https://blog.sketchapp.com/versioning-licensing-and-sketch-4-0-8ad98783e9ba https://blog.sketchapp.com/versioning-licensing-and-sketch-4...