Why everything is a subscription

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  • Published on Apr 30, 2019
  • Selling a gadget isn’t enough anymore. Creators need to find a way to keep revenue coming in, even after they sell a device. Companies like Peloton sell the hardware, but also a service to go along with it. Ashley Carman reports on recurring revenue and subscription services, and why they might be the key to keeping hardware businesses afloat.
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Comments • 618

  • The Verge
    The Verge  Month ago +70

    What’s your favorite subscription service?

  • Username
    Username 6 hours ago

    capitalism is getting grosser every year

  • Alex M
    Alex M 4 days ago +1

    0:49 "were able to own the software" - NOPE, we just had long-term license (usually revocable as per EULA that only some read).

  • JC E
    JC E 5 days ago

    People are funny. They rage about paying and not owning while many have done it without knowing. You know the software you use in your iPhone and mac aren't yours at all, they're leasing it to you consumer. Renting houses, even if you own a house you still have to pay for it through taxes, it doesn't belong to you truly. Ownership is an illusion.

  • Graham Bunce
    Graham Bunce 6 days ago

    i personally agree with the closing monologue. can't wait to own nothing but the debt i incur pretending to own things.

  • gerard praetz
    gerard praetz 6 days ago

    What you are saying is that if you are poor and have an I.Q. above 5 and are not willing to put yourself in a position to destroy your life, you can not have any technology!!!

  • axnyslie
    axnyslie 9 days ago +1

    Nobody ever "owned" Adobe Photoshop. You purchased a license to use a product. That being said their subscription is a bad model.

  • axnyslie
    axnyslie 10 days ago

    Those of us who amassed a library of videos, CDs, vinyl, etc and the dedicated hardware players will be envied in our golden years when we pay $0 for endless hours for enjoyment and will never be outdated.

  • Ge mar
    Ge mar 17 days ago

    I was expecting this video to be about every time you try to view a news article how they want you to subscribe and lock you out after 5 views a month. I'm not going to pay for one much less 1000 newspapers online, they are lucky if I am kind enough to turn off my adblocker without closing out the window and telling them F U

  • XY Zhou
    XY Zhou 18 days ago +1

    I am a simple man, I see monthly subscription fee, I buy something else :/ A tiny protest from a non-important nobody

  • Ananta Kr. Roy
    Ananta Kr. Roy 18 days ago

    Subscriptions are for those fluke founders who know they can't make beyond a single product. It is an insult to their own intellect and a surrender to their mediocrity

  • brann
    brann 19 days ago

    O my goosh

  • Artam Studio
    Artam Studio 20 days ago

    The coffee maker analogy leaves out one important detail: cost of production. If they're selling it at $300/unit, it obviously doesn't cost them $300 to make that unit. Probably $20-50 (and that's being generous), so after $100 in ad spends the maker still clears $150. R+D cannot be calculated into the production cost.

  • K
    K 20 days ago

    It's very simple. A while ago, a company continued to increase profit by increasing productivity, innovation, and new inventions. Now, they want to do minimal effort, only making 1 or 2 products, and getting paid for it each month.

  • flare tech
    flare tech 21 day ago

    Does that mean for Android if they guarantee a 10 os support they can charge a subscription plan for it

  • 00midnightcat
    00midnightcat 24 days ago +1

    If this is really what it takes to keep consumer tech. as a business working, it is on life support at death's door.

  • An Alarming Number Of Bees

    Guess what, The Verge? Consider my subscription to your service terminated!
    You capitalist corporate shills!

  • King Daniel
    King Daniel 26 days ago

    sell people liability. Turn them into your cash flow. Basically selling you rentals so you never actually bought anything you just rented it again and again.

  • PJNinja
    PJNinja 26 days ago

    Everybody is taking a leaf out of the Gillette book on business model and it's making tech too expensive. Ultimately all these things tie us down financially with commitments, the same way banks have always done and this isn't good for us as a society. We as consumers need to collectively say no to this practice by not buying subscription services. They are going to tempt us with cheaper offerings at the outset - but we need to hold fast and say no to these types of services.

  • Matthew Bitter
    Matthew Bitter 27 days ago

    My main gripe with subscription services is in mobile apps..especially on the appstore. My gosh they're everywhere. I've been looking for a good translator app and I cant seem to find any that doesnt charge you $10/month and some even $10 a week...something you could get for free with google translate. flawed language learning apps like memrise, or rosetta stone tries to charge you a ridiculous amount/month for gimmicky features and doesnt take you anywhere. they're many other types of apps (sinple ones as well) that do these kinda things and what's worse is that they barely get any updates. I'd rather pay up-front for all the features in an app rather than a perpetual cost every month for no reason.

  • Barded Wyrm
    Barded Wyrm 27 days ago

    We live in a world with all the worst aspects of a Cyberpunk dystopia, but none of the faint glimmers of redemptive possibility.

  • Christy Jones
    Christy Jones 28 days ago

    Nope. No subscriptions for me.

  • Shameless
    Shameless 28 days ago

    This video made me EXTREMELY SAD about everything. Black Mirror incoming.

  • Bassem B.
    Bassem B. 28 days ago +1

    10:36 great video as always, until this bit. This is the very worst conclusion you could have after covering subscription services.

  • galmannmedbart
    galmannmedbart 29 days ago +2

    I hate "recurring revenue," micro transactions and subscription services.
    It's designed like drug dealing and casinos.

  • R Cabreezy
    R Cabreezy 29 days ago

    Screw everything about this video and "subscription models". Peloton being the worse example of this.

  • owenbevt3
    owenbevt3 29 days ago

    yer works grate for compenys - until someone else turns up and offers something similar which won't be a long term drain on there customers and everyone choses them.

  • Prathamesh Parikh
    Prathamesh Parikh Month ago

    Damn,..that dystopian future run by corporate greed is not that far

  • Hayden Bedolla
    Hayden Bedolla Month ago

    Well, you can live without subscriptions. It makes a product seem cheaper but really are just as expensive if not more. That's why do my very best to stay away from the month to month payments other utilizes and rent. Everything else is payed in full. Or no money from me. All in all, subscriptions is like an never ending credit card debt. Take forever pay off. So I have neither, and look at that. I have money. It amazing what you have when you get what you need.

  • cheekoandtheman
    cheekoandtheman Month ago

    Propoganda

  • AnarchoHumanism
    AnarchoHumanism Month ago +4

    F*** evrything about this! Most especially ADOBE!

  • Pieguy And fries
    Pieguy And fries Month ago

    This makes me depressed, I’m a design student and I was really frustrated that I have to get a subscription to use Adobe Programs. I glad I know WHY there are so many subscriptions for everything but Wow....I hate corporate America

  • Spencerianism
    Spencerianism Month ago

    Constant cash flow from my wallet to already megalithic monstrous corporate Vampires. Sounds lovely.

  • Elasticbrand
    Elasticbrand Month ago

    To me, this is the most aggravating trend today. When I could buy 1Password software for 40$ and be done with it, I was a happy customer. Now that it's subscription only ... it's bye bye forever. I don't like you anymore, not your brand, not your company, not your product. Customer irritation is really bad for your brand, trust me. Just so you know Tech Mafia. There is another side to this. If your stuff is not important enough to the customer's life, they will go another route.

  • HotPeridot
    HotPeridot Month ago

    So, in other words, the companies work on finding ways to scam the customers - remember what happened with the landline phones and having to rent them - well, those went by the wayside when people could finally purchase their landline phone and not have to pay rental anymore. We consumers will find every way we can to not give these greedy companies more and more money. So fed up with the greedy companies.

  • elom sithou
    elom sithou Month ago

    This is the kind of thing that empties people’s bank 🏦 account.

  • Guda's World
    Guda's World Month ago

    Because capitalism is broke AF

  • Karl A
    Karl A Month ago +1

    I find it strange that The Verge made no attempt to criticize or question the subscription trend.

  • Nick D.
    Nick D. Month ago

    Love these videos! Thanks for making them :)

  • Marlo Cronin-Tapner

    Just like streaming services if you make buying the product harder people will just pirate stuff. On another note the bike you can legit buy a good exercise bike plus a tablet with TheXvid and save money instead of buying something that only works with an internet connection.

  • Vatsalya Sharma
    Vatsalya Sharma Month ago

    Crack it

  • Mellotronster
    Mellotronster Month ago

    Ashley Carman is my Reporter-fu.

  • Remix culture
    Remix culture Month ago

    I dont do subscriptions for anything but utilities and that is literally because there is no cheap way of having essentials without a monthly sub. 99% of Devices/Services going sub based are not for the benefit of the customer. Its to enrich the investor and business, who do not share the cost savings, but have an increased control over what you do with the product. No thanks.

  • A.S
    A.S Month ago

    Is my life a subscription ?

  • Adalore
    Adalore Month ago +1

    goodness, that ending blurb is all kinds of redflags to anti-capitalists. Ownership is agency, I can see wiggle room for non-necessary things being subscription but goddamn I really wish housing wasn't a "For profit" market.

  • Jose's Planet
    Jose's Planet Month ago

    So we just going to ignore that guy is dressed like Ash Ketchum?

  • GamerbyDesign
    GamerbyDesign Month ago

    Lol I dreamed of a world where I didn't own anything...How stupid. One of the only ways to have any power in this world is ownership.

  • Nathan Surrett
    Nathan Surrett Month ago

    Modern Vampires

  • Edward D'Souza
    Edward D'Souza Month ago +1

    Those spectacles were so distracting.

    • Kevin Rolston
      Kevin Rolston Month ago

      Whole face and demeanour was a distraction for me. Lordy.

  • Sapphiregriffin
    Sapphiregriffin Month ago

    soooo..... greed

  • Forgotten Head
    Forgotten Head Month ago +5

    subscription = Renting.
    buying = owning.
    wake up people

  • CamdenBloke
    CamdenBloke Month ago +2

    I still use the 2010 version of MS Word because I don't want to subscribe to use it.

  • Salil Jakhadie
    Salil Jakhadie Month ago

    Wish the audio was synced with the video, irritating af to see such deterioration of production quality

  • allluckyseven
    allluckyseven Month ago

    Having a single product also isn't really "sustainable". Why don't a dozen of these hardware making companies get together under one umbrella company so that all of them can keep making products?

  • AsellusPrimus
    AsellusPrimus Month ago

    I pretty much have zero patience for silly gadgets at this point. We know very well the environmental (and social) impact of creating tech products. Computers and phones have become necessary to participate in society, but how many new doodads do we need to invent?

  • Jae duk Seo
    Jae duk Seo Month ago

    oh that why TheXvid also started subscription

  • YoshiPeach Mario
    YoshiPeach Mario Month ago

    when I look at a product, I always calculate the final asking price (if any). The low initial cost + recurring fee always makes me think twice, compared to a more expensive one off charge.

  • beta pro
    beta pro Month ago

    Ashley Carmen is hot af

  • Mic k
    Mic k Month ago

    So in summary took over the end-user .. Thanks

  • LagiNaLangAko23
    LagiNaLangAko23 Month ago

    Coz in their ideal world, people DON'T own anything.

  • Martin 'teadrinker' Eklund

    TL;DR because venture capitalists have a lot of power in our society and they are pushing for it...

  • Gerrit Harteveld
    Gerrit Harteveld Month ago +2

    My favorite subscription is a VPN subscription.
    It helps me circumvent a lot of subscriptions.

  • Reke Onamusi
    Reke Onamusi Month ago

    Yeah... its a no from me

  • Action
    Action Month ago +1

    I"m just here for Ashley Carman.

  • TwoBitColorPencil
    TwoBitColorPencil Month ago

    Recurrent User Spending anyone?

  • Samarth Narladkar
    Samarth Narladkar Month ago

    God...I love this Series!

  • Shloeb
    Shloeb Month ago

    She is so good. Great job!

  • vickimon
    vickimon Month ago

    Do not support these subscriptions. Companies DO NOT need subscription based services to survive. If they do, they need to go defunct.

  • Tomáš Jozífek
    Tomáš Jozífek Month ago +3

    But still, I am not gonna buy a coffee maker that uses pods, or anything that requires subscription as long as I have the option not to

  • Ross B
    Ross B Month ago

    a subscription for updates is one thing but i dont want anything where i can't use it if i can't pay my bill that month.

  • JayMike Willingham
    JayMike Willingham Month ago

    great conversation video!!

  • No One
    No One Month ago

    In my opinion, Sketch, the Mac-only vector design software popular with UI designers, has found the happy middle ground on this. You pay $100 and you get the program on one device at a time, and you own the software. You get a year of updates. And then the updates stop. for each additional year of updates, it costs $70. In this way you have much more control as a consumer, and you can save money by not paying for a while until there's some new feature or features that make it worth your while. Sketch gets recurring revenue for putting more into developing the software. If they quit adding great new features or make a poor UI change. they'll stop making money.

  • Ross
    Ross Month ago

    You only have to look at the comments to see that the general consensus is that customers don't like the subscription model. It will work for a while, but as more and more companies want to tie you in, people will rebel and I am sure they already are starting to.
    I hated it when Adobe introduced a subscription model. I never started a subscription with them, instead I use a version of their software before they switched over. It still works just fine and I am effectively giving them the middle finger! I also moved away from Adobe Lightroom to an alternative where I could buy the software outright. Lightroom was dog slow anyway!
    I don't even have a music subscription anymore because I just wasn't using it enough, but I was still paying for it every month exactly the same!!
    Companies need to stop being so greedy, people don't have bottomless pockets! Just look at how mobile phone prices have gone up and up with innovation that hasn't matched the price tag.

  • Fakhri A
    Fakhri A Month ago

    It's like printer business, the real money is from ink buyings

  • DARK KNIGHT WITH AN IDEA

    The ULTIMATE turn off in business. Subscription based ‘anything’. Where you pay & your information sits on their server & when you stop. It shuts out your access & history. Corporate ransom. There are two worlds at play here. One the Silicon Valley day dream bubble. The other a stark reality that people just need to get to work & pay bills. Never mind an exercise cycle that’s a few K + 50 PM with subs ...... To do what exactly? I find this whole logic at a mass disconnect to the REAL WORLD most people live in.

  • Raheel Lakhani
    Raheel Lakhani Month ago

    I think there is recurring customer maintenance cost as well. There is nothing as forever.

  • Stuey Griffith
    Stuey Griffith Month ago +4

    why get their money once when you can get it ONCE A MONTH?! 😉

  • Joel Victoria
    Joel Victoria Month ago

    Sad 😞 only milking the poor people out of there few pennies for bull

  • jmckinno
    jmckinno Month ago +4

    This is an outline for the end of capitalism. Nothing made, services distributed, till the next crash.

  • Dung Nguyen
    Dung Nguyen Month ago

    The coffee maker example remind me of a machine call “Juicero”.... great business model lol

  • Cathy Swinton
    Cathy Swinton Month ago

    "what's your favourite subscription service? owo" I HATE THEM ALL, it's just more bills and instability, exploiting the consumer and generating profit that will not be passed on to the already exploited workers manufacturing these products - only the shareholders. Infinite growth from your capital may get you off, Jack, but it's disgusting and harmful. The only thing more hellish than this is in-built obsolescence.

  • Dattucha
    Dattucha Month ago

    pretty soon you'll subscribe to a robot which works (instead of you) and pays for all your subscriptions

  • Jonathan Bignoux
    Jonathan Bignoux Month ago

    This is really interesting! I would never think of subscription services this way.
    I think that subscription-based services/products are only profitable for the users/buyers if they find it really useful in their life. No company forces you to pay every month for the product or service, there are a lot of options out there.
    For investors, it's simply a good business strategy and tactic :)

  • Dael Ra
    Dael Ra Month ago

    Feel so good that I just my new phone outright and not on contract.

  • MrMagnaFarce
    MrMagnaFarce Month ago +1

    Who the hell rents clothing? Is that some hipster city slicker sort of thing?

  • Candy C
    Candy C Month ago +4

    Here's a challenge for you as a content creator, instead of defaulting to the walking and talking scenes, perhaps find a different way to engage us with what you're saying without always going to that type of scene. The ambient noise is a bit distracting and it just feels too scripted to me that I don't want to focus on what's being said. That's just my thought, other than that it was an interesting take on subscriptions, would've liked more of the consumer perspective and long term cost to be explored

  • Jesse Lieberman
    Jesse Lieberman Month ago +3

    Printers have been using this model for years

  • CRMcGee2
    CRMcGee2 Month ago +3

    The rental comparison is a bad analogy. Renting is not the same as subscriptions. Renting's is a limited time or one-off kind of usage. Subscriptions are recurring monthly charges.

  • Lewis Harding
    Lewis Harding Month ago

    I remember the family guy where Carter had the cure for cancer and refused to give people a 'one time cure' when he could provide treatments for a lifetime and bill them the whole way.. basically, why sell your product for a one time purchase when you can forever bill someone for the same product and create much more money and reliable income?

  • canal canal
    canal canal Month ago

    Nah nah bro, I love to keep my stuff

  • Anubhav Bhatnagar
    Anubhav Bhatnagar Month ago

    Subscriptions may be good for generating reoccurring revenue for the company, but the problem is sometimes it acts as a burden on the users of that service or product. I would rather prefer paying full time for a product/service, while a subscription for getting little perks that come alongside with it, so that I can enjoy the main product with it's key features without worrying that I had to pay to use it next month.

  • hbarudi
    hbarudi Month ago

    I am with the comments on reducing the growth of subscriptions in our daily lives. Now you are tied to paying $/month forever to be able to buy something? This is contributing to the worsening of the DEBT crisis given that you need those $ to pay off your loans and get rid of them especially student loan debt and car debt.

  • ProlificSwan
    ProlificSwan Month ago

    Feels like she's walking down an infinitely repeating street.

  • Thomas Hofmann
    Thomas Hofmann Month ago

    The biggest problem with subscription based businesses is that they will soon be back to square one because we reached subscription saturation. At the end of the day be it in business or personal live there is only so much money available. Once you hit the ceiling people will start making choices.
    The Adobe subscription model I think is a very good example. When they first started they won over customers because it was slightly cheaper to do the subscription than to regularly pay the upgrade price. However since then the cost of Adobes subscription has nearly quadrupled. It now almost costs as much per year to subscribe then it cost in the past to buy the product outright. What's worse once you stop subscribing you can no longer access all the assets you created with the software subscription due to zero backward compatibility. To top it all off Adobe has been adding feature after feature to it's product line up without focusing on stability or considering wether users actually need those new features. Every update brings new bugs and problems and usability gets worse.
    For many smaller design studios the pricing has reached a critical level were they rather learn a new product that is purchased outright (often for the same of a single monthly subscription payment) rather than continue buying into a subscription model. I think the same will happen for other subscription services unless they offer something unique such as the Sphero.

  • AwSam Weston
    AwSam Weston Month ago +2

    You guys are playing this up as this really awesome "Woo! Future" kind of thing, but the whole idea of everything becoming a subscription sounds horrible to me.

  • Waitwhat469
    Waitwhat469 Month ago +9

    The line "I might soon live in a world where I don't own anything" , in a system where ownership is literally power, is dystopian to me.

  • ktktktktktktkt
    ktktktktktktkt Month ago

    5:48 revenue would be $300? $200 would be maybe the contribution margin depending on how costs are assigned. source: Canadian accounting student

  • TheFluffyDuck
    TheFluffyDuck Month ago

    So a future citizen won't own a house, land, computers, phones, content, cars, or anything. Worse still a lot of us will lose out to automation and need a UBI to survive. Hmm. So where is our leverage for rights and representation?

  • Synergi Lund
    Synergi Lund Month ago

    Just don't subscribe. If no one caved in they'd have no choice but to go back to selling again. The software should speak for itself, if it's good people will buy it but I shouldn't have to float a companies for the rest of my life for one piece of software. It's only a matter of time before people will start getting sick of it and pick maybe one or two and get rid of the rest and look for alternatives they can own. Like Procreate vs Adobe products.
    Other than streaming services, I don't see the point to pay a sub to take notes. Everything is a subscription because these companies want an on going cash cow to milk you every month.

  • Mr. W
    Mr. W Month ago

    Because "creators" don't create anymore. Our Consumer Capitalist system is on life support, with everyone scrambling for more pieces of the pie, and we're slapping bandaids on everything and unwilling to admit the free market failed us big time and will bring about its own very violent downfall. Meanwhile we celebrate those who manage to succeed by bringing about the end. Look to your heroes. They're probably going to eat you.