I have stubbornly maintained a subscription to Sports Illustrated (SI) – the U.S. weekly (now bi-weekly) magazine about the sporting world – for longer than I can remember. If I assume my SI subscription started in college (the first time I could afford such luxuries), I’ve been receiving SI in my mailbox every week for the better part of forty years. That’s a lot of magazines. More importantly, that’s quite a commitment to a subscription.
Subscriptions are exploding. A purchasing mechanism once limited to newspapers and magazines has penetrated nearly every aspect of today’s spending opportunities. Without checking my credit card statements, I can list ten subscriptions I’ve picked up over the last several years: Amazon Prime (package delivery and more), Life Time Fitness (gym membership), Dish Network (satellite television), AT&T (wireless phones), the Wall Street Journal (electronic newspaper), Microsoft 365 (MS Office software), LifeLock (identity theft protection), Harry’s (shaving products), Isagenix (vitamins), and Chewy (pet products).
I’m sure I could come up with another ten subscriptions I’m paying for, but not keenly aware I’m paying for (Costco comes to mind). But that’s life in what the Wall Street Journal (WSJ) calls our “subscription economy”. We’re happy to sign up and pay the weekly/monthly/annual fee. But how much do we use the given product or service? Businesses don’t care about “use”. In fact, many of them bank on “no use” or their business model doesn’t work. Example: my monthly subscription to my gym seems modest in return for a first-class facility that often seems empty.
With the explosion of technology, subscriptions can be listed in several “…as a service” categories. Software as a service (SaaS): Microsoft 365, Dropbox, and Google Apps. Hardware as a service (HaaS): Ring doorbells, Nest security cameras, and the vehicle you drive. Content as a service: Netflix, Spotify, and most of today’s magazines and newspapers. No matter how you classify these products and services, they’re still subscriptions. Often they lure you in with free short-term trials, which more often lead to longer-term subscriptions when a) you can’t live without the product or service, or b) you simply forget about the free trial, after which you’re automatically upgraded to a paid subscription.
My SI subscription is not actually my longest. I opened a bank account in grade school; an account I maintain to this day. Do I pay a monthly fee for this account? No, but the bank invests the money I store in its accounts (until I need it) – for a profit. Sounds like a subscription, doesn’t it? They’re making money off me whether or not I use their services.
A July 2018 report states the average American pays $237/month for subscriptions (which means I am “above average”). The same report claims eighty-four percent of Americans underestimate how much they spend on subscriptions. Finally, with the Millennial generation resistant to ownership of any kind, subscriptions have broad appeal – no real commitment to the product or service; just a fee for the subscription. In other words, take a dip in the pool or stay out of the water altogether. The company doesn’t really care.
Is there a conclusion to be made here? Not really; just observations. The WSJ article says all of us should engage in “subscription spring-cleaning” every year – a thrifty idea. Weed out the ones you don’t really use and hang on to those you do. I like to get exactly what I pay for, but I must concede subscriptions still make sense. They function quietly in the background to make sure products and services are always available, when and where you need them. And assuming you do need them enough, they are cheaper when calculated per-use.
Some content sourced from the 5/8/19 Wall Street Journal article, “Stop Wasting Money on Unnecessary Monthly Subscriptions”.