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The Monthly Subscription Era
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Ian D.
Certified Credit Union Financial Counselor
Posted January 11, 2019
Who doesn’t like the idea of receiving regular gifts in the mail? What about access to some of your favorite TV shows, movies, and games at your fingertips? In the age of instant gratification, subscription service providers have capitalized on our interests and emotions to provide us with exciting memberships that secretly drain our accounts.
Subscriptions to what?
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Subscription companies offer options for people in all stages of life. Music, TV, and movie streaming services were some of the first to enter the market. People now pay monthly to access all forms of entertainment, including dating apps, online newspapers and magazines, electronic books, internet gaming, and computer software. Additionally, people have been persuaded to pay monthly for cloud storage, home security, diet and fitness apps, gym memberships, grocery and meal delivery services, and memberships granting access to discounted online shopping and free shipping. More recently, there has been a massive uptick in the availability of subscription boxes catering to children, men, women, beauty and grooming, lifestyle, pets, fashion, and more.
Too small to notice
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With subscription and membership models, companies have been able to extract larger amount of money spread over a longer timeframe. This relies on people forgetting about the charges coming out of their accounts automatically each month. Sometimes there are contracts with minimum subscription periods and others allow you to cancel anytime.
How they get you
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According to the website Hitwise, social media has become one of the largest targets for subscription advertising. The people most active on social media are often the most likely to sign up for a free trial or monthly subscription to something they view as new and exciting. Additionally, there is almost always a coupon code, a free gift, or trial period. With social media advertising, they can personalize the ads to your previous internet searches or your listed interests and ‘likes.’ According to Hitwise, the number of people visiting subscription company websites increased by over 800% from 2014 to 2017 (this amounts to 37 million visitors in 2017).
What you can do
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While the total of all subscription costs can get away from us, doing a regular audit of these monthly service charges can help you control the amount you’re spending. Every couple months, look at what you’re paying for and compare it to how much you’re actually benefitting from the service. This can also help you identify when the terms of a subscription have changed or when there has been a price increase. Next steps may include cancelling some subscriptions, reducing the frequency of deliveries, or rotating which memberships you subscribe to at different times of the year.

Source:
“Hitwise Blog - Why the Subscription Box Industry Is Important to Your Brand.” Hitwise | Competitive Intelligence & Consumer Insights, 23 Mar. 2018, www.hitwise.com/gb/blog/2018/03/why-the-subscription-box-industry-is-important-to-you-brand/.

 
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