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Almost everything is reconditioned as a service based on the subscription these days. These are not just streaming services or magazines. From razor blades to clothes and imperfect productsMore and more companies transform the occasional sales of ordinary products into subscriptions.
For users, the subscription economy promises convenience. For companies, these automotive renewals are a source of regular and recurring income.
However, there is a big difference between companies that have evolved to provide infrastructure to people's lives and those who aim to deliver things regularly.
The tastes of Netflix, Spotify and Disney + successfully tested the inelasticity of demand for their services, pushing successive price increases without losing subscribers.
At Amazon, the number of American members Prime increased from 112 minutes in 2019 to 194mn in 2024, according to the Awards Consumer Intelligence Research Partners analysis company. The $ 14.99 per month they paid contributed to the $ 44.3 billion in Amazon subscription income made last year.
Selling ordinary products regularly is much more difficult to do. Blue Apron, the New York -based meal kit service which became a public in 2018 during an assessment of just under 2 billion dollars was acquired two years ago for only $ 103 million. The actions of Hello Fresh, a competitor, are negotiated less than a tenth of their summit in 2021. Bark, a toy organized and treats the service for dogs, and Stitch Fix, a personalized clothing service, is both down around 95% of their summits.
The problem with the sale of “stuff” is that the newness factor is lowering, and the low barrier at the entrance means that there is a lot of competition. High Churn maintains the cost of acquiring and retention of customers. Neither Stitch Fix nor Bark have made profits in the past five years. In addition, the economy of packaging and delivery of physical goods is much more difficult than that of streaming music.
The greatest streaming services should have a lot of power. Between them, they have more than 750 million members who pay monthly costs. This is reflected in their premium assessments, 43 times the term gains for Netflix and 58 for Spotify. Their size and vast content libraries should put them downwards the list of things that consumers would choose to cut, especially if they end up spending more time at home because they cannot afford to go out. But the gap between the winners and the losers can only widen that consumers in financially refused their list of submarines.
