Subscription payments very quickly became the new normal and the question as to whether it’s the right payment procedure is one that hasn’t been thoroughly answered. In this day and age you can pretty much pay for anything through a subscription model, which begs the question, is this the best payment model out there. The short answer is yes. In most cases subscriptions offer us the opportunity to enjoy a wider range of products at a fraction of the price, however, this kind of reward does come with a risk.
While some of the older generations have struggled to get to grips with the idea of owning very few things, to the younger members of society this is more of a blessing than a curse. When it comes to streaming services whether it be music or film, we simply have access to quality content at affordable prices. With the tide changing on the subject of ownership, the likes of Netflix and Spotify have been able to capitalise. From a consumer perspective this has been fantastic. Putting this into numbers, for £120 a year you can listen to as much music as you want on Spotify, if you compare this to how much music £120 a year would have got you 15 years ago, it would have been about 12 CDs. Streaming services are clearly more beneficial to the consumer than previous modes of buying music.
Quite clearly the subscription based model isn’t a new payment service, magazines and gyms have been using a subscription service for decades. The point to be made here is that more and more companies are leaning towards this form of payment. Music and Film aside, we are now seeing a number of companies adopting this method. This has birthed the food box delivery industry, the likes of Hello Fresh and Simply Cook, deliver fresh ingredients and easy-to-follow recipes straight to your doorstep, all paid for on a subscription basis. Do you get value for your money with these food box companies? Well it pretty much depends on how you value your time and your ability to cook. The meals are considerably more expensive than if you were to go to the supermarket, but if you want to remove the hassle of shopping for food and the stress that comes with not knowing what to cook, then this could be a valuable use of your money. It’s not just the home cooking industry that’s being influenced by subscription models, the floral industry has also come under this umbrella of change. Freddie’s Flowers is an online florist that is doing exceptionally well at the moment. For £24 a week they will send a fresh batch of seasonal flowers on a weekly basis. Freddie’s Flowers are doing a damn good job of taking over the floral game. The subscription basis is the key behind Freddie’s success as it ensures its customers will always have fresh flowers delivered to their door, something very few traditional florists can offer.
Over the next few years we are definitely going to see a rise in subscription payments, particularly in the fashion and tourism industry. Fashion subscription companies are starting to pop up and there is a fair bit of buzz surrounding them. For example ‘Lookiero’, a subscription based clothing line from France raised just under $24 million in two rounds of investment. Subscription payments haven’t meaningfully reached the tourism industry, yet there is one company called Be Right Back (BRB). At BRB you pay £50 a month subscription fee and with that you get three holidays a year with flights and accommodation included. While BRB are the first company to follow this subscription model I am sure they won’t be the last.
The major issue with this payment model is that it can sneak up on you in a way that one time fees can’t. For example I created an Adobe account and didn’t realise that I had signed up for a yearly subscription, as I was paying on a monthly basis I thought I could cancel my subscription at my own doing. However, because I signed up for the yearly subscription I cannot cancel my account when I want to. I have to either pay for the whole year or pay a £60 fee to cut it short which is ridiculously annoying. You have to be careful with hidden fees as well. It’s very easy to sign up to a company on a one month free trial and end up getting charged for forgetting to cancel your subscription. It causes me great pain to say I have fallen victim to this too, ITV plus, amazon prime and Borrow my doggy, are all apps that I have downloaded on a free trial to then be charged without knowing. Of course it’s my fault, but these companies do a stand up job of making it difficult for you to cancel your account.
In conclusion, always be aware of free trials that charge you as soon as your trial period ends. It’s a dangerous game. But all in all, subscription culture is heading in the right direction and ultimately this model is doing a mixture of saving people money (the likes of Netflix and Spotify) and time (Amazon Prime, Hello Fresh, Freddie’s Flowers). Personally I like the way subscription models are moving.