Last week, I sat down after work and turned on the TV, I went straight to the apps section and hit the big red N. Safe to say I was affronted. ‘This TV is not part of your Household’ – how rude! Don’t tell it that. What followed was a conversation on how to get around it. I haven’t watched Netflix on the TV since, I’ve used my travelling device (my phone) to watch the last season of Top Boy – but it’s hardly the same experience. And now, much like any big business with creeping overheads, we’re talking consolidation.
Amazon Prime = £8.99, Apple TV = £6.99/month, Disney Plus = £7.99, Netflix = £10.99, NowTV = £9.99 (or a whopping £33.99/month if you’re sporty!) And these are the standard option costs; for roughly an extra £3/month you could get the premium versions.
So, in case you hadn’t done the math, that’s £44.95/month and £539.40/year, which in a cost-of-living crisis seems like far too high a price to pay to watch TV. Now might be a good time to mention that Amazon Prime gives you access to Prime delivery, but they’ve also recently introduced ads in their shows. So tomayto tomato.
Looking through a myriad of tiered pricing structures got me thinking about the most successful subscriptions, and I’ve narrowed them down to two categories: treat-yourself and need-but-don’t-want-to-think-about. In the treat-yourself category, you’ve got your monthly wine club, your cheeses, your designer bags, your artfully arranged flowers, lotions and potions, cookbooks, watches – the list goes on and on. In the need-but-don’t-want-to-think-about category, you’ve got the less glamourous but vital, household cleaning products, oral hygiene, feminine hygiene, vitamins, shampoo & conditioner.
There is also the in-between. Let’s call this outsourcing; I need to eat a healthy dinner, but I don’t have time to go food shopping and I don’t want to think about recipe planning – enter Gousto, Hello Fresh and Mindful Chef.
Now let’s look in the mirror and consider the optics of what these subscriptions say about you as a person. For example, if you’re a combo-subscriber to Oddbox, Forthglade, Smol, Freddie’s Flowers and Smyle, you might think of yourself as an out-to-combat food waste coffee snob with great oral hygiene, a clean house with always-fresh flowers and a well-fed dog. All that sounds quite nice, it has a certain I’ve-got-my-shit-together appeal and I’d like to meet you and your dog.
Discretionary income is described as the amount that is left for spending, investing, or saving and paying for personal necessities. But do subscription holders deem their subscriptions personal necessities? Some would argue that, yes, coffee is a necessity; you could make that argument for all of the products in the ‘treat-yourself’ category. But brands who fiddle with their subscription models will draw attention to their product and service and in this environment, subscriptions that slip under the radar are safer from the chop.
As soon as your customer starts considering if you’re worth it, you’re in trouble. Worth means something slightly different in subscription land, where there are more variables at play. Customers will put a lens on product delivery, packaging, convenience, frequency (with the option to pause if they don’t need the product now) and overall experience.
My predictions on subscriptions are that they’ll take a hit, providers will come up with more tiers (Bronze+ anyone?) to try and keep a hold of market share and customers will still wonder if it’s worth it if everyone else is doing something different. Loyalty programmes look to be the way to go – reward your customers for being loyal and this might be returned when they’re reviewing their expenses.
Customers seek experience. And with 84% of customers saying they’re more likely to stick with a brand that offers a loyalty programme, they might just change their behaviour – as long as you’ve got the sugar to keep them sweet. As Kelis says: My milkshake brings all the boys to the yard. And that’s where I’d like them to stay…