Subscription Fatigue: The Burden of Choice
The luxury of claiming complete and direct ownership is waning, replaced by pervasive subscription services for seemingly everything. Across entertainment, software, and creative tools (not to mention features in some modern cars like seat heaters…), the modern consumer is inundated with choices that come with monthly or yearly fees. The status quo has undeniably shifted from game ‘rental’ platforms like Xbox Gamepass and PlayStation Plus (PS+) to creative powerhouses like Adobe demanding recurring payments for standardized software. No longer can an artist buy a tool or software; now, they must continually invest in it. The same applies to gamers, movie enthusiasts, and virtually every digital consumer.
This landscape has its merits, don’t get me wrong: the promise of consistent updates, added features, and a sense of continued support. On the business end, there’s access to a loyal audience, easily predictable monthly and yearly income, and a more direct route to consumers. I’ve recently been thinking more about the consequences of all this, as there are undeniable challenges and frustrations not just for consumers, as we’ve started to see more and more businesses hurt their bottom line by pursuing subscription models losing immediate access to those benefits. As these subscriptions accumulate, weighing on wallets and decision-making, the industry stands at a crossroads.
The State of Subscription Models
The subscription model’s ascent can be attributed to various factors, both from the perspective of companies and consumers. We likely all remember when Netflix took off, and the concept of “cutting the cord” from cable was new enough to be the subject of dinner table debate. This model began to grow for businesses, with it the promises of a consistent stream of revenue, a deeper engagement with their user base, and an opportunity to nurture brand loyalty over extended periods. Netflix grew from a tech startup to a household name, garnering so much familiarity with the public that whole dating cultures formed around “Netflix and Chill.” It’s no surprise that various sectors have embraced it with open arms.
Film and TV streaming platforms were among the first to popularize this model. Unlike traditional cable packages, platforms like Netflix and Hulu initially provided vast content libraries for a single monthly fee. Importantly, they filled different niches. At its origin, Netflix focused on movie rentals, while Hulu offered significantly more television. This trend quickly made its way into music with platforms like Spotify - dethroning iTunes’ purchase-based model (.99 cent songs would certainly stack up on my 1000+ song playlists!) - and then to gaming with services now known as Gamepass and PS+.
But it’s not just entertainment; even essential tools for creators have transitioned. Adobe’s shift from a one-time purchase software suite to the Creative Cloud subscription model significantly changed how professionals access their essential tools. Now, Unity’s move to charge developers per game install is just another testament to how deep-rooted this trend has become. Revenue share is a more traditional model that generally makes sense regarding software licensing and usage. Still, Unity is transitioning to charges on a per-install basis, which is another beast entirely. More on that later.
With this saturation also comes a paradox of choice for consumers. The allure of endless content or continuous software updates can quickly become a burden as monthly charges accumulate, turning the boon of ‘unlimited access’ into a decision-making nightmare. Where businesses once benefitted, they now see more discussion of a waning consumer base. Why pay for 3 battle passes if I barely have time to finish one? What if Netflix has nothing I want to watch this month, and Hulu does? While one service may come out on top, the others will all lose, and there’s a potential for these industries to cannibalize their purchases. How many subscriptions can one juggle before they become untenable and people don’t renew?
The Benefits: Case Studies
A shining example of subscription services done right is the Xbox Gamepass. Microsoft has strategically designed Gamepass to benefit both developers and gamers generally. Developers, especially those from indie studios, find a platform where their work can reach millions, eliminating the need for massive marketing budgets. On the other hand, gamers get access to a diverse library, from indie gems to blockbuster titles, all for a relatively low monthly fee. For example, Starfield launched day one on GamePass, a $70 title. In other words, if you plan on playing that game, it’s significantly cheaper to purchase the service for three months than to buy the game outright. Plus, the consumer gets access to hundreds of other games as well.
There’s been speculation about how beneficial this can be on the developer’s end. Are you ultimately losing out on sales by catering to a subscription-based crowd? The “Sea of Stars” story stands out here, a relatively niche game featuring pixelated graphics, turn-based combat, and a traditional story inspired by classic JRPGs. These types of games can become fan favorites or niche successes, but it’s safe to say most of them don’t achieve massive sales compared to other, more mainstream genres. Launching on Gamepass and PS+, Sea of Stars used clever marketing, great word of mouth, and a fantastic product to achieve an entire year’s sales projection within just one week. Despite being available on streaming services, people bought and supported the game in droves. While not every game can share this fate, it is a clear example of how these services can boost games, indie studios, and publishers while providing actual value to players.
Procreate Dreams’ Promise:
Procreate Dreams has chosen a different path in an ecosystem increasingly favoring subscriptions. Their upcoming app, geared for animation, sound design, and movie editing, is available for a one-time fee of $20. This move is a breath of fresh air in the creative tools space. Not only does it make high-quality editing tools accessible to a broader audience, but it also ensures users aren’t bogged down with recurring payments. The commitment to never transition to a subscription model speaks volumes about their understanding of the market pulse and the desire to democratize access to creative tools.
What’s fascinating about Procreate Dreams is that several years ago, this hardly would have rocked the boat. It used to be the norm. Cleverly using a standard subscription model to market their product, they stand out and make major headlines. By eschewing recurring payments, creators and artists have come out in droves, saying they are ready to drop $20 without hesitation and support Procreate. By zigging when others have zagged, they’ll likely achieve the same net benefits - a loyal user base, a passionate internal market, and the ability to provide years of support while maintaining goodwill. They’ll likely make significant money off the product without the risk of losing users who can no longer pay in the future.
Both these examples highlight the dual nature of the subscription world. While Gamepass exemplifies the potential of a well-curated subscription model in the gaming world, Procreate Dreams showcases the power of a one-time payment model in the realm of creative tools. It’s evident that there isn’t a ‘one size fits all’ solution. The approach must be tailored to the audience’s needs, the industry’s nuances, and the more significant market dynamics. Banking on the idea that people will ‘keep paying’ no longer works heading into 2024 and beyond, and we’re starting to see shakeups to these norms, with clear benefits to the companies taking said risks.
The Pitfalls: Case Studies
Unity’s New Charging Model:
Unity’s recent decision to monetize its platform by charging developers per download at first glance is a forward-thinking business move. It’s a strategy to capitalize on the popularity of games created with Unity, presumably targeting behemoth mobile games like Genshin Impact. But as previously mentioned, there’s a flip side, and I fear it won’t just hurt developers and consumers but Unity themselves. As a baseline example, picture a low-budget indie game that joins Gamepass to get exposure and becomes one of the lucky titles to turn into an overnight sensation. There’s a very real possibility that the game could reach millions of downloads and wind up owing Unity significantly more than they earned from the game. Becoming a success could mean tangibly losing money here.
Independent developers, often operating on shoestring budgets, will feel the pinch the quickest. For these creators, every cent counts. The sheer volume of downloads, instead of only bringing joy, might bring financial stress due to this new model, and that’s just the tip of the iceberg. The impacts stretch significantly further. Unity’s layered monetization — charging for using the runtime during development, based on downloads, and the game’s revenue — will impact previous releases. If this change goes into effect, we will see many games, potentially hundreds or thousands, taken off storefronts permanently.
The developers for Cult of the Lamb, a smash hit by Devolver Digital, ‘jokingly’ tweeted (side note: what’s the new term we’re using here, X’d?) that they’ll be removing the game the moment this model goes into effect. That same publisher, Devolver Digital, tweeted that they need to vet what engine a dev is making their game in before publishing it, as this could majorly impact their deals. Indie studio Aggro Crab shared how their upcoming game is launching on Gamepass, and they’re debating whether to throw away years of internal experience with the engine since the impact of this policy could potentially financially ruin them. Adding salt to the wound, Unity has yet to share any upsides coming from this new model, such as added support or new features, which could’ve been sold as an up-charge and would have avoided all this drama. There’s a possibility Unity will change the model soon, but for now, many people are proudly voicing their discontent.
PlayStation’s Subscription Hike:
Prices are also significantly ramping up on the consumer end. Multiple subscription services have made recent moves to increase pricing and get their audience to pay more, with increased prices coming to services like Disney +, the notorious recent account crackdown made by Netflix, and a significant increase in the cost of PS+. Sony’s recent decision to increase the price of its online subscription service has been met with frustrated reactions, to say the least.
Historically, price hikes are a tricky territory. They can alienate a user base if not done right, and many have pointed out that nothing about the service is changing for the better; users are being asked to pay more for arbitrary reasons. Their Essential and Premium tiers are rising a whopping 33%, and Extra is increasing 35%! Even more intriguing is their strategy to lock essential features, such as cloud saves for games, behind this subscription wall. For a casual gamer, this is the last straw. Companies like Sony must remember that a loyal user base has been at the heart of their success. As more and more companies make similar moves, we see players willing to step away from companies they once held fierce loyalty with.
Unity and PlayStation’s moves signify a delicate balance that companies must strike. It’s a balance between monetization and maintaining trust within their communities. Between the good and the bad, one thing is clear: companies need to be constantly in tune with the pulse of their audience.
Balancing Act: Proposals for a Win-Win Scenario
The game of subscriptions isn’t a zero-sum one. When executed thoughtfully, subscription models can offer invaluable returns to both companies and their consumers. There is plenty of innovation left to be discovered in these models; companies have to take the first leap. But how? Let’s explore.
Non-Competing Platform Collaborations:
Envision a future where platforms collaborate rather than compete — not direct competitors, but those operating in different realms of entertainment. As my most recent article discussed, imagine receiving bonus in-game content for your favorite video game because you watched a related series on a streaming service. Or unlocking early access to episodes of a show based on buying merchandise at a collaborating store. By fostering these cross-industry alliances, companies can amplify user engagement, offer value-added experiences, and generate multiple audience touchpoints. Such collaborations can redefine how we consume content, recontextualizing the subscription model from paying a monthly fee to participating in fandom, offering a more immersive, interconnected ecosystem.
Limit Subscription Saturation:
Subscriptions are everywhere. Almost every digital experience comes with a monthly fee, from your morning news to your workout routines. This influx has its pitfalls. Subscription fatigue is real. There’s a looming danger of audiences feeling overwhelmed, leading to them abandoning multiple services altogether. Studios and platforms must be reasonable about their offerings. Bundling services, offering family packs, or giving discounted annual plans might ease this burden. Perhaps offering a discount on next month’s payment cycle if you binge X amount of original shows on the platform could be a unique solution, seen as a kindness while encouraging even deeper brand loyalty.
The democratization of tools is at the heart of the digital age. Companies can foster a whole new generation of creators by providing affordable or even free access to students, beginners, or those from underprivileged backgrounds. Adobe could offer free comprehensive classes bundled with a basic version of its suite for students or those just starting. This would encourage new users to hop in and experiment and create a whole new group of people who are experts with their platform, ensuring its continued usage and a dedicated user base for decades. By ensuring that budding talents have the resources they need, we not only level the playing field but also ensure a continuous influx of fresh perspectives and ideas into the industry, all while getting more and more people to use the said platform.
In the vast and varied world of digital subscriptions, it’s clear that one size doesn’t fit all. Companies must remain flexible, continually reassessing their strategies to cater to evolving consumer needs and market dynamics. The end goal? Creating a lucrative system for businesses while being fair, accessible, and valuable for the consumer.
The world of subscriptions is intricate, constantly evolving, and presents both challenges and opportunities. Studios and businesses are notoriously tricky when it comes to sharing their numbers, so it’s hard to approach this outside of the consumer perspective. Still, it’s clear that subscriptions are reaching their first chapter’s end. While they’ve become ubiquitous, companies must ensure their models remain consumer-friendly, innovative, and valuable. By finding the balance between profit and accessibility and nurturing cross-industry collaborations, we can usher in a new era where creators and consumers thrive. The call to action for the studios and platforms is clear: keep innovating, stay adaptable, and always prioritize the user experience. The future of media lies in the delicate balance between business aspirations, opening the gates for upcoming artists, and consumer satisfaction.