Subscriptions
Thinking of purchases as subscriptions can be just as good for consumers as it is for marketers, suggests Damon Darlin in the New York Times (9/11/09). The beauty of subscriptions from a marketer's perspective is well known, of course: "Convince someone to take a subscription, and the revenue flows in for months to come ... Anyone who has signed up for a gym membership that is paid for but not used understands the genius behind subscriptions." Same for anyone who has rationalized paying $30 a month with Netflix without ordering any movies.
"It is amazing how inertia takes over," says Peter S. Fader of the University of Pennsylvania. But sometimes we adopt a subscription mentality even when there's no subscription involved. During the housing bubble, some people bought homes "with little or no money down, with the intention of holding onto it for two or three years before upgrading to a better home ... They were treating an investment in real estate as though it were just another consumable product, to be disposed of with the same emotion one shows in recycling a monthly magazine." That idea worked for some, for a while.
But Erica Mina Okada of the University of Hawaii sees some benefits to viewing purchases as if they were subscriptions, because frequent upgrades make us more efficient. For example, "upgrading to a more fuel-efficient car or ... buying a computer that crashes less often or boots more quickly" are tangible benefits. "People don't upgrade as frequently as they should if they were acting rationally," she says. Of course, this attitude would also "expand our disposal society." However, it might also provide a solution for web publishers seeking an escape hatch from "the free business model." As Professor Fader comments," It's hard to initiate subscriptions ... But once you get them over that hurdle, great things happen."








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