Subscription Fatigue: A New Economy, or a Bubble?

At what point do we tire of the subscription model — or at least pare back that chunk of our income we set aside for subscriptions?

I’m of course not the first person to ask this, and the term ‘subscription fatigue’ is already a common one. But with the launches of HBO Max, Apple TV+, Disney+ and Peacock in the next few days and months, it’s likely to be the video streaming world that gets hit first. At what point do we end up back at the point where we have to effectively subscribe to a lot of stuff we don’t want, paying more than we want, just to get the stuff we do?

I already feel I’m in that place, taking Amazon Prime in Singapore (which is rubbish, useful only for the Amazon-created content), Netflix (also a pale imitation of its US, Australian and UK cousins), Apple TV (UK edition) and things like Curiosity Stream, which posts to its Facebook page programs which often aren’t available in my neighbourhood. I’m already taking more subscriptions than I’d like.

So it seems the most likely winners from the launch of these new services are going to be those that bundle other services with them — Jeff Baumgartner of Light Reading quotes a report by MoffetNathanson and HarrisX that Hulu could get a bump in subscriptions (this is in the US, of course) thanks to Disney’s plan to bundle Hulu’s ad-supported service with ESPN+ and Disney+.

But there’s likely to be some pushback. There are some 300 video streaming services available in the US, according to Deloitte, while GlobalWebIndex found that expense of subscribing to multiple services was the biggest (36%) frustration of users in the UK and US. Their second frustration — content being pulled from their services (as Disney is about to do with Netflix.)

There’s a school of thought that says folk will suck it up. a Harris poll found that that there may be some short-term pushback, but people will get used to it so long as they get high quality content. (That the poll was conducted on behalf of Zuora, which er, lets companies “in any industry to successfully launch, manage, and transform into a subscription business” probably should give you pause. See graphic above; the industry is expanding rapidly; and I’m guessing in part it’s because people haven’t yet figured out how to budget for all the subscriptions, and realised that all these nickels and dimes add up.)

My take? I don’t buy the idea that there’s no limit to what people will subscribe to. The point about these subscription OTT models is that they can be easily subscribed to and, at least in theory, just as easy to unsubscribe to. Gone are the days when you’d sign up to a long-term contract. So expect people to shuffle between subscriptions if they feel something’s not worth it. (It’s called cancel culture, apparently.)

The Deloite survey found that “with three subscriptions services as the average, many say having to piece together a variety of services is a source of frustration. What bothers them? The total number of subscriptions, the time spent searching for shows they want to watch, and when shows on streaming networks expire.”

And expect this fragmentation of the industry to get worse. If there’s even a sniff that Disney and HBO’s bids pays off, it’s not hard to imagine aggregators like Netflix and Amazon quickly hollow out. (And Spotify and Apple might go the same way with music.) People will subscribe to these services only for the original content, and they’ll expect to pay less for it. Quartz reckons that this content will veer towards the ‘product-based’ — think Marvel over Mrs Maisel. In other words, these services will become studios.

The bigger problem: none of this takes into account how we perceive content. We don’t think “I want to watch an HBO movie or a Netflix documentary tonight.” We don’t think in terms of who created the content, we think in terms of the content. We want everything within easy reach, and nowadays, though our forebears who had to get in a car and go to Blockbuster to rent their analog equivalents, we don’t want to have to cycle through lots of apps on our screen to find something. It’s hard enough to find what you’re looking for on Netflix; imagine 300 apps on your screen — it’s like channel surfing again, dumping us back where we started.

My longer view: the subscription model will eventually be replaced by a pay as you go model. We’ll get smarter as consumers, and either by default subscribe and cancel each time we watch a show, or services will pop up that do it for us. Eventually companies will get wise and offer us, effectively, VOD, but at a price that makes sense. That impressive graph Zuora came up with will disappear. You heard it here first: the subscription model is a bubble, that will eventually burst.