How Everything Became A Subscription.

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Why is everything a subscription?

Subscription services are everywhere effecting personal finance the average person is now spending $273 a month on subscriptions and at the same time less than one third of them could afford a $1,000 expense without going into debt…

This only includes software services like netflix, disney plus, hulu, spotify, adobe, apple music, xbox games pass and others. it does not include other recuring expenses like gym or club memberships.

Service companies are doing this to attract venture capital investment. These investors favour subscription businesses because they provide consistent cash flows and can be scaled rapidly before being sold through a traditional IPO, a SPAC or to a private equity fund.

But these businesses are not always perfect and there are some products that just make more sense to sell through a one time direct sale.

So it’s time to Learn How Money Works to find out how everything became a subscription.

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#finance #howmoneyworks

Edited By: Andrew Gonzales

Music Courtesy of: Epidemic Sound

Select Footage Courtesy of: Getty Images

All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.

[InvestorCenter]

When tech bros get into real estate, tenants no longer pay “rent” instead it’s “housing as a service”

[joshnabours]

always remember: If they cant cancel the subscription you can cancel the card it draws from in at least 4 different ways. You can use a cancelable virtual credit card, you can report the card as lost (because it got "lost" in the trash after you cut it up) and have them issue a card with a different number, you can have the bank cancel the card entirely, or you can have the bank put a stop payment on the card for that specific business.

[farmersonly]

"Could a company ban you from your house?" Bro, rent already exists and it is a nightmare

[jasonlib]

I avoid subscriptions as much as possible. I would disagree that they are what people want, otherwise, they wouldn't need to be pushed and marketed so heavily. They're what businesses want because they create a larger continual revenue stream which shareholders love. Take Microsoft office, for example, until recently you could still pay a one-time fee. However it was so difficult to get to it, and on every page was trying to push you to use 365 subscriptions instead. There is no tangible benefit to Office being a subscription. other than minor changes and bug fixes, Word for example hasn't changed much since 2006 except for a few stylistic changes, the fundamentals of a text editor haven't changed.
But yet MS pushes it extremely hard as a subscription. Why? because they make far more money, just 2 years of a subscription will cost you more than the upfront cost would have, and I can guarantee you have been using MS Office for more than 2 years. now when you have a product that doesn't really change much, I could still be using the 2006 MS word and it would still do 95% of the things the newest version can, only difference is 16 years of cost. This is the goal, making you pay more, via the long term than you would have been willing to pay upfront.

[KoRnholio]

The big problem with content services is that every piece of media can disappear over some copyright licensing disagreement and potentially never be seen again. It can also move to a new service etc. This is not a huge deal for very popular mainstream content, but can be a very real danger for more niche media.

[electrobob]

I am perfectly happy to pay for a subscription service that gives access to more content than i could ever buy individually.
I am however refusing to pay X/10 per month for software which used to cost X and which i could keep for years and years if I wanted to.

[GodlessCog]

Pro-tip, attach all subscriptions to a throwaway digital card that you can transfer money in and out of at ease, that way every time the service attempts to charge you would literally have to add money to the card. If you don't use the service any longer, you just won't add the money and either cancel it or it will be suspended on its own.

[adhdhobbyist]

I disagree with your photoshop example, most of the time I don't need any of the new features and just wouldn't upgrade so I would have saved money compared to the expensive subscription model. I liked the fact you could choose not to upgrade and still have a functional product that is still suitable for business use. Now they got rid of that option so they can continually extract money from you whether you use the new features or not.

[Salimaleikum]

The most annoying type of subscriptions is the phone apps specifically the ones that charge a yearly fee after a trial period. I recently found out that I purchased a yearly subscription for a mushroom recognition app, but I can only use it during a couple of month in late summer because there are no mushrooms during other seasons!

[hansihintersoos]

Remember the words: "You will own nothing but you will be happy."

Ownership and property is the key to freedom. Don't let them take it away from you.

[LarsHaendler]

Everybody has to do the maths for themselves. We completely moved back to DVD / Bluray because it is cheaper for us in the long run. You also have items you can actually sell if you need to. Same goes for music. As a 40+ I found my music style and have no issues making mp3 from my occasional CD buy or get direct mp3 downloads from artists I like. Books, DVDs and audio books are (almost) free at my local library. Having a simple analog timer for my coffee maker and living room lamp is also much cheaper than any smart home subscription.

[danycashking]

I don't inherently dislike subscriptions, it has it's advantages, especially with people with limited but regular income. BUT my pet peeve is that they make it the only option, if they always provided both the option to buy outright or to subscribe perpetually and left that decision to the individual consumer i wouldn't be against it, then everyone gets the plan that fits them best. Flexibility is key.

[Radhaun]

I'm not inherently against subscriptions, but I wish it wasn't so hard to *own* copies of things too. I don't like that a lot of digital media can't be easily (or at least legally) downloaded anymore, it all has to be kept on the product holders servers. Which is fine as long the servers stay up, but if anything happens, all our stuff is gone through no fault of our own. No ability for us to make backup copies. I like subscriptions for trying things out, but if I really like a movie, book, or song, I'd prefer to have an offline copy for myself and I don't mind buying it by itself, but currently even if I buy a digital copy, I won't actually get a digital copy. I'll have access to it only so long as I have access to the server it's hosted on for as long as it's hosted.

Also, in all honesty, renting a living space (room, apartment, or house) *is* a subscription and people *do* lose their housing if they don't make their payments. Even mortgages are subscriptions until you pay them off (if you ever do).

[boyscout]

This is why I only subscribe to services that I actively use and enjoy. Been testing this with virtual cards that expire automatically within a certain time period. If i sign up for a trial membership, I use a virtual card and if I forget about it, nothing happens because the card will terminate and the service can't charge me. If I think it was an actual benefit in my life then I can choose to pay for it. Works great 👍

[kacktustoo]

Subscriptions are one of those things that works extremely well with certain things, but businesses gotta follow those trends and now there's so many bloody subscription packages that have no reason to be one and now cost way more and are way more inconvenient.

I find business software is a big one, used to provide perpetual licences, but there's been a big trend of large companies buying up smaller ones and making their products all subscriptions, really annoying.

[jonathan]

What I really dislike about subscriptions is that when you cancel you are left with nothing. No music, no movies, no car, no software.

[neutral]

I do think, generally, people are not used to *managing* subscriptions and more and more people will get better at it. The only reason most subscriptions are so consistent is because you forget to pause/cancel on the regular. I am sure it'll become more normalized and automated somehow.

A big issue with subscriptions is, like with Adobe, when they're structured as a year long thing paid monthly which makes it just "pay over time" and that actually really sucks.

[defilerzerg]

“A job is a monthly subscription on you for your employer”
(Can't recall where I heard that)

[ngi_]

"You will own nothing and be happy".

[ProjSHiNKiROU]

The "You will stop owning things" is more related to than subscription: (1) how ownership contracts are becoming less pro-consumer and (2) how products are becoming more expensive requiring loans to pay off.
When I see a $5/month subscription, I'm conditioned to see the infinity dollars rather than the $5, so I almost never get into new subscriptions.