Aardvark DailyNew Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.
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For a very long time people used to own stuff.
You worked, you saved, you selected, you purchased and you owned almost everything you needed.
Cars, houses, bicycles, washing machines, clothes -- almost every single item in your life became an acquisition, something you could claim ownership of.
That model works fine when societies and economies are growing and expanding but not so well once a point of equilibrium is reached. What do manufacturers and retailers do when everyone has already bought all the goods and products they need?
Well over the years there have been a number of strategies developed to ensure that the cash registers keep ringing and production-lines keep rolling.
The first one was designed obscolesence.
Instead of designing things to last a reasonable amount of time, manufacturers quickly worked out that they could build stuff more cheaply by cutting corners and even deliberately shortening the functional lifespan of their products.
This model means that instead of your washing machine lasting 10 or 15 years, it breaks after less than half that. What's more, because the focus is on reduced cost to manufacture rather than easy repair, once that washing machine breaks it is simply cheaper to buy a new one than have the old one repaired.
Bingo... another sale! This keeps the production line in action and the retailers happy.
This strategy can now be seen in action throughout your house. Products are often cheaper to replace than repair, even when repair is an option. A great deal of our smaller appliances are simply "disposable". Who's going to pay someone $40 an hour plus parts to repair their $19.95 toaster or electric jug for example?
Then there was the styled obsolence that we've seen for quite some time.
By creating an aura of desirability around products such as smartphones, cars, etc., manufacturers are able to make new sales simply by bringing out prettier and stylier models, year after year.
Yes, last year's smartphone might still be working perfectly well but you just have to upgrade to *this* year's model or you'll become an outcast in a world where being "up to date" is now so important. Anyone seen using last year's phone model is clearly a failure and a second-class citizen.
Those strategies have served industry very well for quite some time but there is a newer method of keeping the revenues flowing that is getting set to take off.
Well it's not *that* new actually. It's been slowly creeping its way into our lives for a while now.
I'm talking about the subscription model.
When I was a little younger I used to buy my favourite music on records, then tapes, then CDs. I owned these recordings, or at least I owned the copies of that music that I paid for when I bought those bits of media. Everyone had their own collection of recordings made by their favourite artists.
Now, thanks to Spotify and a raft of other subscription-based services, the concept of "owning" a copy of an album or recording seems to have all but vanished. It's only old fogies like me who have a collection of such things in physical form. Younger people are already happy with the concept of paying in perpetuity to listen to their favourite tracks. Not for them, the concept of paying once for "ownership" of those recordings.
The same goes for movies and TV shows. I have a library of DVDs and BluRay disks that I bought with my hard-earned cash. I can watch them any time I want without having to pay another cent for the privilege. Contrast that with more contemporary methods of consuming this content and you'll see that subscription-based services such as Netflix, Disney+, Amazon Prime and others have found a better way to lighten your wallet -- in perpetuity.
And now this subscription-based model has begun to move into areas that we'd never dreamed of even a few short years ago.
Toyota has announced that some of the features in its cars will only be available by subscription.
You might have bought and paid good money for your new Corolla but if you want the remote-start option to work after a few years you'll have to stump up with a monthly or annual payment to keep that feature working.
No, it's not because it uses any of Toyota's resources. There is no server handling remote-start requests. There's no internet or cellular connectivity involved that might merit some kind of fee.
Toyota's key-fob, like most others, talks directly to the car -- but you'll need to stump up $10 a month to make it work for no reason other than it seems like a great way for Toyota to increase its annual revenues without any extra input-costs.
Unless there's a huge degree of pushback from customers, which there probably won't be, then we'll increasingly see this "no added value subscription" model being rolled out in many other areas. What manunfacturer isn't going to leap at the chance to earn regular annual income from hardware that you've already bought and paid for?
There are just so many other ways this model can be used to separate you from your hard-earned cash on a regular basis.
Perhaps your next washing machine will only give access to cycles other than "basic" after the first year unless you subscribe to retain the "delicate" and "heavy duty" options.
Maybe your smart TV will start pasting ad banners on the bottom of its screen while you're watching your favourite show -- unless you subscribe to their ad-removal option.
Who knows how far this will go but, since there's a huge amount of money to be made, I'm expecting that the sky will be the limit.
What do readers think of this trend and do you think there will be enough push-back from consumers to stop it? Personally I doubt that. People have become so yielding and unwilling to stand up for themselves that I think the subscription model will be accepted without a wimper.
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