Subscription models till the last penny

sub1Paying full price doesn’t belong in this era and micro transactions are annoying. Let’s welcome subscription models. Or do we rather want to see them leave?

The trend in entertainment-land seems to be subscription models. From HBO and Crunchyroll to sportschannels that charge a monthly fee for their service. You give a ‘small’ compensation for their service, until of course all those small fees become a big fee and you can’t pay your rent anymore.

Of course not being able to pay the rent is a bit exaggerated, yet all those seemingly small prices can sum up to a large amount of money. When everybody decides to handle this payment plan many entertainment products will not be available to the public. The complete opposite when you want to reach as many consumers as possible with your fantastic product. But how did subscription models arise?

To answer this question we have to look back at how media was consumed years back. In the mid 20th century media wasn’t as widely available and a small amount of sales was good enough to become break even. Record stores, video stores and the likes were able to remain profitable because people needed to buy their media in actual concrete stores.

After some time, at the end of the 20th century and the beginning of the 21st century, internet and services such as Napster started to arise. Entertainment companies were flabbergasted and so began the ‘piracy propaganda’ we still face today. Copyright laws were adjusted and new ones came into place or proposed, to halt the massive exodus of the consumer to the internet stealing all those products. And despite everything, a lot of those entertainment companies still exist today, still making many millions. I will not propagate that they don’t deserve a fair share for their efforts.

Yet, the undeniable truth is that physical/traditional sales are not as profitable as before and companies are searching for other business models. Creating blockbuster products is a risky deal as there is no guarantee the product will become profitable or even reach a breakeven point. A subscription model guarantees a minimum amount of money that the companies can use to create content.

A great solution you would say, but when every publisher is implementing this model and they each charge 10 dollars a month and I want five channels I would end up paying 50 dollars a month. Excluding the fee I pay for the standard TV-subscription and online services such as Netflix or for anime Crunchyroll.

I see subscription models as a trend in which entertainment publishers try to find a fitting business model. They are testing ways that work out for them. Some will succeed such as HBO, but not all will make it to the finish. Entertainment publishers have to see for themselves that times are changing and the wallets of consumers aren’t filled with money all the time.

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6 thoughts on “Subscription models till the last penny

  1. Overlord-G says:

    Indeed. Micromanagement, free to pay, subscription fees. Internet purchasing will probably become the new wave of the future…for better or worse. We’ll see how long monthly subscriptions will last before changes need to be made to the payment model, like $10 for 6 months or an entire year.

    • ninetybeats says:

      Paying seperately for everything doesn’t seem like a profitable business model. You should get an ‘one-fee-get-all’ account or something. To seperately create accounts and contracts is confusing and inconvenient. A whole one year fee might scare people off. 15 dollars a month sounds cheaper than 180 dollars annually.

  2. spitzsoapbox says:

    It’s a bummer how Cable tv packages work, and if you look at services like Netflix or Crunchyroll from the perspective of paying X amount of money per month for shows you aren’t watching (as I’d assume most people only feasibly have enough free time to watch a few shows a day if that), it can seem like a tremendous sham, yeah.
    But on the other hand, if you pick and choose the services you know you’ll use a lot and just live without the rest, I still think the service is well worth the money.
    In Crunchy’s case especially, paying 7 bucks a month to watch any series they have available as much as you want (to me personally at least) seems like a very good deal. Especially when you take into consideration how expensive anime series can be to purchase on disc. (But a Crunchy subscription doesn’t look awesome on a bookcase, so physical copies are still valid imo.)
    I dunno. It’s weird. I’m certain these services will continue to change in both good and bad ways, much like video rental establishments have pretty much died off completely.
    (I apologize for the novel. Whole lot of words that say very little no doubt, lol.)

    • ninetybeats says:

      Haha no problem, thanks for your reply. Well Crunchroll and other services such as Netflix are still heavy reliant on Copyright and regional codes. Meaning you’ll always get another set of shows anywhere in the world. The only way this would be great for everybody to enjoy, is to stop using outdated copyright laws.
      Plus not all countries have super fast internet speeds to rely on and consume a lot of online media, so traditional sales still have to be available for the time being.

      • spitzsoapbox says:

        Ah internet speed is a good point. Even in the U.S. it can be difficult to find a provider that offers sufficient speeds for online streaming in some areas (I’ve been there).

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