Subscription Purgatory
Tags: business, productmanagement, subscriptions, post
Published: 2019-01-20 15:25:58

---
title: Subscription Purgatory
published: true
tags: business,product_management,subscriptions,post
canonical_url: https://horia141.com/subscription-purgatory.html
---

I’ve recently read [Subscription Hell](https://techcrunch.com/2018/05/06/subscription-hell/) by TechCrunch’s Danny Crichton. I’ve _also_ been noticing the trend for media companies to move to a subscription/paywall model, and away from the _traditional_ advertising model. Mostly because it’s very obvious - doesn’t take a great technological seer to notice it. But it _is_ interesting and worth elaborating on it. And I felt that the article focused on a single aspect - how much all of this is going to cost - to the detriment of other negative aspects. Some of which, if they get to play out, would really merit the title of _hell_.

First, as a former AdTech worker, it struck a small cord with me. Principally because one of the mantras of folks working in the industry is that Internet advertising allows _everyone_ free access to the sum of human media - from folks in rich countries to ones in poor countries, and from the best educational channels on YouTube to the worst of British tabloids. Which sounds very noble and a great good to society. It’s also implicit that the ad viewers and clickers in rich countries are subsidizing those in poorer ones in this regard, as the biggest ads budgets are there. So it’s a bit ironic seeing somebody in a rich country complaining about the price of paid media being too high.

It’s also worth spending some time on why this is happening. Cause the common narrative seems to be the increasing weariness of folks about AdTech and its cavalier attitude on privacy, and the big hammer they’ve decided to use to fight it - ad blocking. Which leads to decreased revenues for publishers as significant portions of affluent viewers become _invisible_ to the system.

Now this isn’t wrong, but I don’t think it’s the complete picture. And adding a bunch more details will allow us to draw some interesting inferences later on, based on more than the idea that publishers are just looking for a new business model.

So a second big reason why publishers are moving to this model if that there’s a lot more examples of success in this field, and a _reicipe_ is much more visible. I’m speaking here of the likes of Netflix, HBO/HBO Go, Spotify, Apple Music etc. These are basically TV on the internet and radio on the internet. And while these are primarily advertising supported media, their internet versions have managed to be subscription based and advertising free (to a large proportion at least - radio still has some ads holdouts, but the subscription numbers of Spotify are from another planet when compared to a traditional publisher like the NYT). The only big holdout is YouTube, but it’s owned by an advertising company, and even it has a paid version.

Furthermore, these publishers not only survive, but _thrive_. We’re currently living through what is called [the Golden Age of television](https://en.m.wikipedia.org/wiki/Golden_Age_of_Television_(2000s%E2%80%93present)), and much of this can be linked straight to the fact that you’re a customer of the content provider and their incebtives are perfectly aligned with yours - get _you_ the best conent so that you’ll stay a customer.

So the reasoning is then - if this thing works in some media (film, tv, radio), why not in others?

Finally, a related but distinct reason is that there’s been a growing movement lately of turning regular products into services. It’s very visible in the software world, where most any software aspires to be “as a service” - from games to office tools. But it’s slowly creeping into other industries - restaurants and food delivery (the various startups delivering food/snacks/drinks on a monthly/weekly/daily schedule), car ownership (various luxury brands starting subscriptions - which are different from leasing plans), library access (Amazon Prime), deliveries (Amazon Prime again) etc.

So even without reasons 1 and 2 from above, we might have been seeing publishers move to a subscription service model.

Of course a separate reason for offerings subscription is that your competitors are doing it to. And if they get there first and capture the limited budget of people before you do you might be in big trouble.

This last point ties into many of the issues with how things are going. First up is price, as the original article highlighted. For many folks today media consumption is modulated by a handful of entities - Facebook, Twitter, Reddit, Google (to a certain extent) etc. This has its own issues, but it does allow a great deal of variety of content sources to be shown a user, mostly due to the way the platforms work rather than some high-minded ideal of equity underlying them. Expecting a user to subscribe to all of them, for what might be a very transactional interaction isn’t realistic then. Even at lower prices, and definitely not at the higher prices publishers seem to be asking.

Indeed folks are picky with their subscriptions. The logic by which a costlier purchase is broken into parts which are more manageable seems to not work here. For some reason folks fixate on the “recurring” part. It’s not without reason. The various publishers we visit online have been around for while. So there’s an expectation that you’ll be part of this thing for a long time. Much longer than the various SaaS-es du jour. In any case, I imagine folks at big publishers are pulling their hairs with getting people on board. It might be easier to get a Guardian subscription as a loot box in one of the games kids play these days, than at the end of a well written article nudging you to stop your freeloading.

And this leads us to the big problem in my mind. The same way you don’t want to interact with a small movie studio to get your movie, but rather deal with Netflix, we might get something similar when moving away from advertising. Why get your news from the “small town gazette”, when you can use the NYT instead. These sorts of markets do not favour _a lot of psrticipants_. Certainly not millions. So we’re going to see massive consolidations coming. Granted, this allows economies of scale and golden ages, but it is also a reduction in distinct voices, a uniformity and corporatization of some vibrant parts of the media. And remember that this is still an industry with some very big players and some not so nice consolidation. The prospect of having them even more so is troublesome from many points of view : social, economic, political etc.

The silver lining exists though, and the current crop of subscription companies in music offer insights. Unlike their TV and movies counterparts, these so far only work as aggregators of other content, but are not creators themselves. They are cheap and they do allow a multitude of creators to exist, with many pointing out that they actually even out the field by allowing smaller artists the same tooling as bigger ones, and even dedicated spaces for them - I’m thinking of Bandcamp here for example.

On the other hand, this is an unlikely scenario for several reasons. News and publishing is much more like movies and TV than music. Both focus on the new, with a very short shelf-life for the artifacts they produce. Both require a bunch of capital to deploy (not all web publishing though, but just think what investigative journalism actually entails logistics wise) to construct artifacts. Music had a much longer shelf life in general, and there’s a lot more amateurs creating good stuff than in other mediums. Combined with the zero friction of the internet and the easy access to professional tools, it has led to some grim days for labels and artists pining for the good old days of massive hits and 10x platinum records.

These differences are what make the Spotify model of subscription for news and other media troublesome. Which is sad, because that’s a winning proposition for consumers - cheap news with all the interests aligned. And it’s the reason why we’re not talking about subscription heaven, but about subscription purgatory.

In any case, the dies have been cast and there’s no turning back. For better or worse we’ll see more publishers moving to a subscription model, and then we’ll see where we go from there.