If it seems as if much of your life has a subscription now — your TV, your car, even your white noise machine — you would be correct.
Take Eleanor Lewis, a 35-year-old software engineer in Brooklyn who is paying for a video game she is no longer interested in. She has subscribed to D&D Beyond — an accompaniment to the original role-playing game — for what to her feels like “forever.”
“I haven’t played Dungeons & Dragons in like five years,” Ms. Lewis said. “I literally do not even like Dungeons & Dragons, but I’m stuck with this stupid Dungeons and Dragons Beyond on a subscription I can’t figure out how to get rid of.”
That is but one example of products or services that can take up long-term residence in credit card statements. There’s your streaming channels. Shopping sites, like Amazon Prime. Wholesale clubs for household goods, like Costco. The ink for your printer. Cloud storage and the tools that make your computer useful, like image-editing software.
It could even be your underwear. Car washes. The bed where you sleep. The networks where you watch professional sports. Earthworms to feed your salamander. Dating apps. Exercise bikes. Your child’s math games. Fitness trackers, like Oura rings. Pet cameras. Your pet robots. And don’t forget the subscriptions to particular products, like toilet paper from a company called Who Gives a Crap.
Some of your subscriptions have subscriptions — there’s Hulu and then there’s Hulu Premium. And, of course, there are subscriptions to manage your subscriptions.
Subscriptions have become so ubiquitous that they have become a target of lampoonery from the likes of Joe Fenti, a Boston-based comedian. On a recent trip to New York, he tried to use an exercise bike at his hotel. The bike, a Peloton, required him to create an account to use it.
In a sketch, widely shared on Instagram, he sends up the new way of doing business. He portrays a modern-day salesman who shouts, “This product is for a subscription that’s just ads and you have to pay to make it stop. You have no choice.”
In an interview, Mr. Fenti, 29, added, “More and more, I’m seeing that things are becoming a service product that really should just be hardware you purchase and then get to use.”
The average American has 5.2 subscriptions and spends $69 per month on them, according to new research from Bango, a British subscription platform provider — though other research places the figures higher. In some of those analyses, including one by the Chicago-based firm C+R Research, the average subscription bill per person might be more than $200.
A significant number of products — including physical merchandise, software and everything in between — have moved to a subscription model. According to a 2023 Harvard Business School study, almost 75 percent of companies that sell directly to customers offer subscriptions.
Subscriptions have been around for decades — for cable, newspapers, car leases and cell phones. (And, yes, The New York Times, too, relies on readers’ subscriptions.) The explosion of this model is a more recent phenomenon.
A seminal moment in subscription history was the success of Netflix’s model, introduced in 1999, and Amazon’s launch of Amazon Prime in 2005. The moves helped make those companies into corporate behemoths, and other companies have been bundling subscriptions since: Phone and internet companies like Verizon now offer packages that include Netflix.
For some customers, the fatigue is setting in.
“I don’t think there’s a single thing you can sign up for at this point that isn’t trying to give you a subscription,” said Shonit Kaluri, 27, who works in New York as a lender for a bank that specializes in health care. “You end up wasting a lot of money through subscriptions because you think you’ll save money up front.”
Mr. Kaluri purchased a subscription to Club Pret, from the cafe chain Pret A Manger, paying $50 a month for up to five Barista-made drinks a day.
“If I was buying three dollars of coffee, twice a day, I actually come up on top. But at the end of the day, I didn’t actually get the $50 worth,” Mr. Kaluri said.
For companies, subscriptions bring reliable cash flow, building a steady stream and reassuring investors. Also, a customer is more likely to stay loyal with a subscription. Both factors bolster a company’s measure of customer lifetime value, an assessment of how much money each customer generates, marketing experts say.
Customers may feel more at ease with smaller payments, rather than the upfront cost, said Giles Tongue, a vice president of marketing for Bango, which runs a platform to manage subscriptions.
“If you turn it into a subscription product and you’re imagining you’re going to get a recurring payment over a number of months, that reduces the initial feeling of commitment,” Mr. Tongue said.
Some car companies have been seeking ways to make more money after the point of purchase. Tesla once placed a one-time $10,000 price on its Full Self-Driving capability. In 2021, the company introduced a monthly subscription for the package. Earlier this year, as Tesla’s profits shrank, the company moved some of its basic auto-piloting features behind a paywall.
In recent years, BMW attracted derision for offering subscriptions for heated seats, though the company later questioned that decision. (That feature was mocked by “The Daily Show.”) In 2022, Mercedes-Benz began offering a subscription for improved horsepower, and the company continues to sell data packages that offer some of its cars’ features as subscriptions. (Volkswagen also offered a horsepower subscription, beginning last year.)
“If I could go into the supermarket and sell you only the plain yogurt and then in a different stand send you the fruits to put in the yogurt and all these components apart, I would love to do that,” said Gil Appel, an assistant professor of marketing at George Washington University. “You can’t do that in the supermarket. You can do it in any other app.”
As technology has advanced, so has the ease of tracking consumer behaviors. Subscriptions allow companies to collect more information over a longer period. And they represent a greater opportunity for brand loyalty, and an increasingly crucial avenue for revenue. A study from Capital One Shopping last year found that 87 percent of consumers will pay more for products from a brand they trust.
“If I am a subscription or a membership model, I have access to data that those customers are intentionally giving to me,” said Jennifer Cline, the chief marketing officer at SubSummit, an annual conference for businesses in the recurring-revenue industry. “I’ve got first-party data that I’m collecting from them passively through their behaviors and their buying habits and the items that they’re purchasing.”
Another reason for this shift is a generational one: Older customers were more used to owning things and more afraid of being overleveraged. Millennials and Gen Z-ers, not so much.
“A baby boomer would want to own a car. They would wait to buy a car until they had enough money to pay for it,” said Scott Fay, a professor of marketing at Syracuse University.
There is another frustration related to subscription models for consumers: the difficulty of canceling some of them, as Ms. Lewis, the software engineer, discovered with D&D Beyond. It can mean long wait times on the phone or navigating dense websites just to get out of a dormant or unwanted subscription.
In response to grumbling from consumers, the Federal Trade Commission under the Biden administration proposed a rule that would have made it easier to cancel memberships. It was blocked by a federal appeals court last year, citing procedural issues.
In the meantime, consumers will have to watch out for those monthly withdrawals in their statements.
Sopan Deb is a Times reporter covering breaking news and culture.
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