The Cost of Ownership For Subscription Services

Subscription based services put you at the mercy of the subscription service. (Courtesy of Twitter)

By Joseph D’Amato 

There is no denying that we live in an on-demand economy. Consumers demand immediate satisfaction, and when a product or service is no longer able to provide this, we are quick to find a replacement. We are able to effortlessly negate the externalities that come with ownership because we mistake ownership with access.

Remember the days of buying music? The estranged relative who knew nothing about your interests figured you like music and bought you a $25 iTunes gift card. We have all been there. I for one loved buying music on a cost-per-song basis because it provided me with a sense of ownership. I was free to listen to a song regardless of my device’s reception, and there were neither added data costs nor was I paying a monthly fee to access my music library.

Today, very few people buy songs individually. Instead, most lease music through a streaming platform such as Spotify, Apple Music, Pandora or SoundCloud. These services are subscription-based, and so for a monthly fee, consumers gain access to said service’s catalog of music.

Sure, convenience is great and plenty of these services are cost-efficient relative to traditional purchasing, but in adapting subscription-based commerce, ownership is lost. When ownership is lost, people become negligent to consequences and anything beyond the interim.

To depend largely on multiple subscription-services without physically owning anything is shortsighted thinking. One’s reception of service is only as strong as his or her compliance with subscription rates.

In the event of a subscription cost increase to where the offer is no longer deemed attractive, the consumer is left without service or any semblance of a redeemable good.

Because these are streaming platforms, the consumer is not permanently acquiring the music. Rather, the consumer is granted access to the catalog for as long as he or she is subscribed. While some may argue that such purchases constitute ownership, what cannot be argued is that this access is both temporary and contingent of continued payment. In a society that is fixated on the short-term, it is easy to see how access may be mistaken for ownership. This non-committal, “I want it now” mentality, is shaping far more than the landscape through which we buy and listen to music. In fact, we are seeing social media platforms take initiative in allowing user content to exist transiently because permanence is so clearly frowned upon in today’s world.

The love for all things now and temporary is perhaps best illustrated by the success of Snapchat. What was once proprietary to Snapchat is that user content and messaging are ephemeral. Messages can be opened once and viewed for a few seconds, whereas “stories” posted by users last only 24 hours. Parents always tell their children to be cognizant of what they post on social media because of the “digital footprint” that is left behind, but Snapchat has seemingly erased that fear, in addition to everything else that is posted through the application. The reason I say this technology was once proprietary is because the other social media giants have since caught wind of the trend and introduced similar concepts such as Instagram Live and Facebook Story, to promote provisional content.

The rise of subscription commerce and ephemeral social media allude to a larger, societal shift which favors access as opposed to ownership.

What consumers are gaining in flexibility, they are losing in virtue. Collectively, there is no longer any sense of patience, no pride in ownership and no concern for the long-term. Though it is no crime to live in the moment, those who do often negate responsibilities that exist beyond the interim.

Add this non-committal attitude with the fact that we are enabled to trade ownership for access, and the perfect storm is created for a mis-mortgaged future.

Joseph D’Amato, GSB ’19, is a finance major from Wyckoff, New Jersey.


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