The economy of subscriptions
The author is an industry team reporter of the JoongAng Ilbo.
Subscriptions are booming everywhere. YouTubers never fail to ask viewers to “subscribe,” and news and content on internet portals all comes with the option to subscribe. Subscriptions are not only for newspapers and magazines. Products and services can be subscribed to as they charge a certain fee to users for regular supplies. A good example is Netflix, which offers various content, including movies and TV series, for about 10,000 won ($8.60) a month.
The so-called subscription economy has become a trend, starting with content to almost all other areas such as food, supplies and luxury goods. The subscription economy is said to be the new blue ocean. Companies find it attractive as it can cover many areas and provide a regular income. However, it is also very unstable. Users can change their minds and unsubscribe anytime easily. It also lacks the concept of customer loyalty or frequent patronage. The subscription economy is different from existing deliveries or paid services, as it conveniently provides what customers like. It offers “curated” recommendations based on big data analysis by artificial intelligence (AI).
What is important here is value. There should be something that makes users feel happy or special beyond the level of simply interesting, convenient and affordable. The subscription economy works when value is greater than the price that customers pay and when the price is greater than the costs of the providers. Sometimes, traditional good deeds and nice messages give value, and strong conviction and sincere delivery add values. AI still cannot imagine and read the complex individual desires and psychology and translate them into value. The “like” button always found next to “subscribe” may be a sign that the value of the subscription economy depends on people’s hearts.
JoongAng Ilbo, Nov. 6, Page 31