Why Everything Is a Subscription

We tend to think of the sales process as a relatively straightforward affair. You want a thing, so you start shopping for a thing. A company markets or advertises the thing. You express some interest, the sales person tells you how great their thing is, you decide to buy it, and everyone gets on their merry little way. Except, that’s not at all how modern commerce works. Instead, more and more companies are moving toward a subscription model for just about everything.

Here We Are Now, Entertain Us

The most obvious example of this comes from the world of entertainment. While it may still be possible to purchase these sorts of things outright, it’s much more common to pay for a monthly subscription. When was the last time you actually bought a physical CD? Or even paid for an MP3 for that matter? No, just about everyone has a subscription to Spotify or Google Play Music, right?

What about movies? Do you still buy DVDs and Blu-rays? Or do you just watch what comes up on Netflix and Disney+? Even video games have been a part of the subscription world for years. You might pay $60 or more for a AAA title, but then you’ve still got to pay for your PlayStation Plus or Xbox Live Gold monthly subscription if you want to play online.

We some inkling of this from the movie theater world too, with services like MoviePass, though those haven’t quite worked out just yet. Even so, subscribing to entertainment services — especially streaming services — is definitely here to stay. That’s at least one great thing that came out of Microsoft’s Zune.

Patronizing Independent Creators

Netflix and Google are gigantic corporations, but they’re not the only ones to benefit from monthly subscriptions. Flipping the script to the “smaller” creator, Patreon has made a huge splash in how online content creators earn their livelihood. Whereas they may have once been at the mercy of algorithms and wild swings in advertising income, YouTubers can now earn a much more consistent monthly income from their patrons on Patreon. This is true for podcasters, web comic artists, and even bloggers too.

Indeed, beyond affiliate marketing and merchandise sales, Patreon subscriptions are one of the best ways to earn more money on YouTube. The platform and idea have been so successful, in fact, that YouTube has its own version called channel memberships. Selling a branded t-shirt once might net you a few dollars. But convincing someone to pledge a few dollars every month? That’s steady, scalable income.

Expanding to New Areas

A monthly subscription for movies or music sounds so obvious to us now, mostly because they’re digital products. It’s great business for the company. What’s become much more fascinating in recent years is the expansion of the subscription model to physical products where the subscription model may not have been quite so immediately obvious.

Perhaps one of the best examples is Peloton. It used to be that you’d buy an exercise bike and that was the end of that. Now, you invest a lot of money (they even have financing options!) to buy the bike in the first place, but then you also pay a monthly subscription for the classes and community. It’s big business, earning Peloton way more more than if they had simply sold you the exercise bike on its own.

These days, there’s no shortage of monthly loot boxes for just about every interest under the sun. You can also subscribe to toilet paper on Amazon. Or to a monthly grocery delivery from the growing range of fresh meal prep companies. Almost anything can be a subscription these days.

One Conversion, Constant Revenue Stream

In case it isn’t already obvious, the reason why everything is a subscription these days is simple. Rather than going through the difficult task of converting a customer just to land a single sale, companies can now convert a customer one time and have that customer pay them each and every month. The initial “investment” in the sales and marketing funnel is effectively the same, but the payoff is theoretically in perpetuity.

Even when you don’t have a product or service of your own, it’s the same when it comes to affiliate marketing. Would you rather get a one-time CPA? Or a recurring monthly payment because you referred someone to a web hosting provider or some other online service? Yes, you can write and publish a book as a branding exercise, but how are you going to leverage that one-time sale in a recurring revenue stream? What subscription option are you exploring?