Think about your favorite movie. A long time ago, if you wanted to watch it, you would go to a store and buy a plastic disc called a DVD. You paid for it once, and it was yours forever. You could put it on your shelf, lend it to a friend, or sell it at a garage sale. Today, things are very different. We live in a subscription economy. This means instead of buying things, we pay a small fee every month just to use them.
Netflix and the Death of the DVD
Netflix is a great example of how this change happened. When Netflix first started, they actually mailed DVDs to people’s houses. You would pick a movie, wait for it to arrive in a red envelope, and keep it as long as you wanted. Eventually, Netflix realized that sending physical discs was slow and expensive.
They switched to streaming. Now, you pay a monthly fee to log into an app and watch thousands of movies. It feels like you have a giant library, but there is a catch. You do not own any of those movies. If you stop paying your bill, your access disappears. If Netflix decides to remove your favorite show, it is gone, and there is nothing you can do about it. You are basically renting your entertainment forever.
BMW did it too with Heated Seat Fees. BMW made a big headline because they wanted to charge people a subscription for heated seats.
The strange part was that the heaters were already built into the car. The wires and parts were there when the person bought the car. However, BMW used software to keep them turned off. If the owner wanted to stay warm in the winter, they had to pay a monthly fee to “unlock” the feature. People were pissed because it felt like they were paying for something they already bought. While BMW eventually stopped this specific plan because of the complaints, it showed that companies want us to keep paying for things even after we take them home.
Companies love subscriptions because it gives them predictable income. Instead of hoping you buy a new car or a new movie every few years, they know exactly how much money they will get from you every single month. For us, it can be convenient because we do not have to pay a lot of money upfront. But over time, those small monthly payments can add up to much more than the original price of the item.
In the future, we might see subscriptions for even more things, like the software in our fridges or the features on our bikes. It is important to remember that in a subscription world, you are often just a guest using a product, not the owner.
