Flock is great for flexible insurance for drone pilots – “Download the app for free to get a real time quote in seconds. Puts you in control.” Subscriptions – Pay to use, when you use. It’s the Uber model – a simple and convenient app to access what you want, on the fly, pun intended. Who wants to buy something when you can pay for it when you want it, and only when you want it and for as long as you want it?
You can see signs of this in many places, including the world of work. The gig economy is taking us to exactly the same place – do what you want, when you want and, actually, where you want and with the people you want. Fashion trends among the younger are centred on lower costs for apparel that is here and now, not lasting. The zeitgeist points towards convenience and flexibility, arguably towards less commitment and the freedom to be fickle.
Although there’s some debate about the timing, there is a growing acceptance that the Western World has passed Peak Car. Millennials and others are much less interested in ownership of a chunk of metal that was seen buy their predecessors as the crucial status symbol that marked passage from childhood to freedom.
In a world that is rapidly changing, with new options and possibilities arriving all the time, you can hardly say that this all is an irrational attitude. Who knows what’s around the corner, so why get yourself committed and locked in, when you might discover something different and enticing or hear that a friend has found some new service that you want to try and might use? It’s almost competitive. Attitude trends are taking us towards experiences, not ownership.
Media, that is Big Media, is responding. A series of episodes used to be released one by one – “Tune in next week for the next exciting episode of…”. No longer. Even the BBC now puts out a whole season in one go on iPlayer. What’s a “season” now, for heaven’s sake? That’s an old concept now, and it’s not the only old concept you can spot if you look carefully.
Just staying with Media, subscriptions are an old model – it’s just rental by another name, and doesn’t bring flexibility or convenience – it simply spreads the cost of buying. Arguably, the whole point is to deny flexibility, which is why investors love anything sticky that gives forward visibility. Where do subscriptions fit into this new world? Well they don’t, and you can see early signs of the wheels coming loose.
In April this year, Netflix statistics showed that growth was continuing apace internationally, but slowing in the US. By June, the company reported for its fiscal second quarter 2019 that overall growth for paid subscribers climbed by 2.7 million worldwide, but it actually added 2.83 million new subscribers around the world — while losing around 130,000 net in the US.
Not scientific, I know, but as I talk to people I run into, I discover a growing dislike for and impatience with the number of subscriptions people feel that they have to pay for, to get what they want. iTunes tries to get me to subscribe, but I don’t want to – I have already subscribed to Spotify, although I really wish there had been an alternative to that. No, I don’t want to pay a shed load each month to Sky for things I’m not going to watch, just so that I can see F1 – I’ll buy a weekend pass for each race, thank you, even though I know I’m paying through the nose. I just want what I want, only what I want and when I want it, for as long as I want it.
Where’s this going to go? Well, subscriptions are going to go – it’s just a matter of time, because they’re so middle aged and the market isn’t. That gap will be tapped by someone, just as soon as someone with the right energy and ability applies themselves to innovating a solution.
In our industry of Cloud? I see the same desperation of big business trying to lock people in. Just talk to a startup who’s succumbed to AWS “Free Credits” and found themselves unable to extract themselves without undue cost and complexity, or even to mould what they do around changing needs and the growing range of options. We’re setting out to change that and offer flexibility and convenience, but that’s something to write about at a different time.
For now, just look around and you’ll see the winners and losers emerging, with the innovations flocking around convenience, flexibility, and freedom.
Originally published on: Seeing Over the Horizon
Peter Osborn, Chairman, Flexiion
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