The subscription economy: a toxic experiment went horribly wrong during the pandemic. Software and streaming services masqueraded as “as-a-service” just so companies could milk our bank accounts. Toothbrushes, printer cartridges, iced tea, lipstick, and avocados joined the subscription club, a dystopian nightmare.
Thanks to the pandemic, we were unwittingly trapped in this perpetual loop of payment plans, unable to break free from the shackles of monthly payments for everything from fitness apps to dating services. The honeymoon is over; the hangover is setting in.
Subscription-focused companies are underperforming the wider stock market; some have even abandoned the model in favor of more traditional business practices. Logitech International’s CEO recently suggested introducing a subscription mouse, which sparked a global backlash. The company quickly backtracked, claiming it had “no plans” to introduce such a product – and rightfully so.
Yet, despite this, the subscription economy continues to expand, projected to reach almost $1 trillion by 2028. It’s time to sound the alarm. Firms are tweaking their models, trying to squeeze more revenue out of cash-strapped consumers who can’t afford to cancel. It’s a vicious cycle: overpriced services, price hikes, and the constant pressure to consume. Almost three-quarters of subscription businesses intend to raise prices this year, further punishing consumers.
The ‘forever transaction’ – a myth exposed
Proponents claim the subscription economy is a “win-win,” where both buyer and seller benefit from the recurring revenue stream. But what a myth! Consumers are coerced into paying for services they’ll never use, like gym memberships and unused software. The reality is, they’re trapped in a perpetual cycle of payments, unable to break free. The Netflix equivalent is scrolling through an endless list of shows, never to return to the comfort of Seinfeld.
Regulators must step in to protect consumers. The US Federal Trade Commission is suing Adobe, alleging the company failed to disclose cancellation fees, while consumers in Europe are fighting back against exploitative subscription practices. Consumers, for their part, must demand accountability from these companies. A world where consumers are unaware of their subscription spending is a world ripe for exploitation.
For too long, we’ve been passive observers in this subscription economy experiment. It’s time to take control. Let’s hold companies accountable for their actions and fight against the exploitation of our hard-earned money. The future of commerce hangs in the balance.
