Subscription-Based Business Models: The New Era of Consumerism
In the grand circus of modern commerce, subscription-based business models have emerged as the ringmaster. A slick, smooth-talking operator that promises not just convenience, but a regular stream of content, goods, and services delivered straight to your door. It's a slick illusion — one that’s turned the act of consumption into an ongoing, passive experience. What once required careful decision-making, exploration, and the occasional moment of joy now comes pre-packaged in a monthly or yearly subscription.
But are we really better off? Are we merely becoming pawns in a well-oiled consumer machine, our tastes moulded and controlled by algorithms and recurring payments? Or is this truly the future of retail, the holy grail of business models that capitalises on both our convenience and our willingness to commit?
The Rise of the Subscription Economy
Subscription models aren’t exactly new, of course. Magazines, newspapers, and even milk deliveries were subscription-based long before Netflix and Spotify reshaped our digital world. But somewhere along the line, subscriptions evolved from niche offers to an all-encompassing force that dominates industries ranging from fashion to fitness. It’s now entirely possible — perhaps even the norm — to subscribe to almost anything. You can sign up for a streaming service to provide a never-ending supply of movies and TV shows, or even receive a curated box of snacks, books, or beauty products at your doorstep every month. You can subscribe to your gym, your vitamins, your video games, your pet food, and — at the cutting edge of modern retail — your razor blades.
At first, it seemed like a stroke of genius: give consumers the ability to get what they want, when they want it, without the hassle of making yet another purchase. The subscription model promised endless choice, flexibility, and convenience, all neatly packaged into an automated transaction. What's not to love? For businesses, it's a steady stream of predictable revenue; for customers, it’s the comforting certainty of not having to make another decision.
However, before we settle into our subscription-driven utopia, there’s a darker side to this model, one that’s less about flexibility and more about the addiction to consumption. Subscription businesses thrive on one simple fact: the more you subscribe, the more you consume. The more you consume, the more businesses can profit from your laziness to cancel that subscription or think twice before the next delivery. There’s an underlying assumption in this business model: that we’ll always be hungry for more, always ready for the next hit of content or convenience, and always willing to pay for it — whether we use it or not.
This dynamic creates a paradox. While subscriptions offer convenience, they also encourage overconsumption. How many of us have unused gym memberships, forgotten streaming services, or unopened subscription boxes gathering dust? The ease of signing up, combined with the hassle of cancelling, means that many subscriptions go unused, quietly draining our bank accounts month after month.
For businesses, this is a goldmine. The subscription economy thrives on customer inertia. The harder it is to cancel, the more likely customers are to keep paying, even if they no longer use the service. This has led to a proliferation of “dark patterns” in user interfaces — design tricks that make it easy to subscribe but difficult to unsubscribe.
Moreover, the subscription model shifts the burden of ownership onto consumers. Instead of buying a product outright, we rent access to it, often at a higher long-term cost. This not only locks us into ongoing payments but also reduces our sense of ownership and control.
The rise of the subscription economy reflects a broader cultural shift towards convenience and instant gratification. But it also raises important questions about sustainability, consumer rights, and the ethics of exploiting human behaviour for profit. As we embrace the convenience of subscriptions, we must also be mindful of their hidden costs — both financial and psychological.
The Psychology of Subscriptions: A Relationship Built on Trust (and Fear)
When we talk about subscription-based models, we're not simply talking about products or services. We're talking about an entire emotional landscape. Subscription services work because they tap into an ancient desire: convenience. We crave simplicity, and what’s easier than being able to press a button and have an entire lifestyle delivered to us, on demand? There's no searching, no decision-making, no risk. All we have to do is commit — and not just once, but on a recurring basis.
But this commitment isn't always based on rational thought. Often, it’s built on a subtle emotional hook that’s just as deep and powerful as any branded advertising campaign. This is where the subscription model finds its power: it doesn’t just give you the product; it builds a relationship. One where the consumer is slowly but surely conditioned to expect, and even depend on, their regular dose of whatever service they’re subscribing to. From a business perspective, it’s a masterstroke in customer retention: keep the customer in the system, and the system keeps them hooked.
A classic example would be gym memberships. It's easy to sign up — just a few clicks, a promise of transformation, and an enticing first month at a low cost. Suddenly, you’re locked into a contract for 12 months. But even as you neglect the treadmill in favour of the couch, you continue to pay, convinced that you’ll return at some point. The gym wins, regardless of whether you actually work out. According to a 2023 survey by Statista, 67% of gym members in the UK rarely or never use their membership, yet continue to pay an average of £40 per month. You might feel the pang of guilt as the gym continues to deduct your membership fees, but that’s exactly what they want you to feel. Guilt leads to commitment; commitment leads to further consumption.
This psychological dynamic isn’t limited to gyms. Streaming services like Netflix and Spotify exploit our fear of missing out (FOMO). By offering an endless library of content, they create the illusion that cancelling a subscription means losing access to something essential. Even if you haven’t watched a film or listened to a playlist in months, the thought of being cut off from the possibility is enough to keep you paying. A 2023 report by Deloitte found that the average household subscribes to four streaming services, yet only actively uses two regularly.
Similarly, subscription boxes — whether for beauty products, snacks, or books — tap into our love of surprise and novelty. The anticipation of receiving a curated package each month creates a sense of excitement, even if the contents often end up unused or forgotten. Over time, these small moments of joy become a habit, and the subscription becomes a non-negotiable part of your routine. The global subscription box market is projected to reach £10 billion by 2025, according to McKinsey & Company, highlighting the growing appeal of these services.
The psychology of subscriptions also plays on our aversion to loss. Cancelling a subscription feels like losing something valuable, even if we’re not actively using it. This is why many companies make it deliberately difficult to cancel, burying the option in layers of menus or requiring phone calls with customer service representatives. A 2022 study by Which? found that 42% of consumers found it difficult to cancel subscriptions, with some companies requiring up to 10 steps to complete the process. The harder it is to leave, the more likely we are to stay — even if it’s out of sheer inertia.
But perhaps the most insidious aspect of the subscription model is how it shifts the burden of responsibility onto the consumer. Instead of making a one-time purchase, we enter into an ongoing relationship with the brand. This relationship is built on trust — trust that the company will continue to deliver value — but also on fear: the fear of missing out, the fear of losing access, and the fear of making the wrong decision.
For businesses, this is a win-win. They not only secure a steady stream of revenue but also create a sense of dependency that keeps customers coming back. For consumers, however, the consequences can be costly. The convenience of subscriptions often comes at the expense of financial prudence, leading to wasted money on unused services and a creeping sense of disempowerment.
The rise of the subscription economy reflects a broader cultural shift towards convenience and instant gratification. But it also raises important questions about the ethics of exploiting human psychology for profit. As we embrace the ease of subscriptions, we must also be mindful of their hidden costs — both financial and emotional. After all, the relationship between consumer and brand should be built on trust, not fear.
The Cost of Convenience: Is It Really Worth It?
The key selling point of subscription models is their inherent convenience. No more deciding what to buy, no more worrying about running out of things, no more hassle. But beneath the surface, this convenience comes with a cost, and I’m not talking about the price tag. I’m talking about the hidden costs — the psychological toll, the environmental impact, and the sense of obligation that comes with subscribing to something you don’t really need.
I’ll admit it: I’m guilty of indulging in Mubi's algorithmic selections. Yet, as I scroll through endless rows of content, most of which I’ll never watch, I can’t help but feel an overwhelming sense of choice paralysis. I’ve paid for this endless library of shows and movies, but how many have I actually watched? According to a 2023 report by Deloitte, the average household subscribes to four streaming services, yet only actively uses two regularly. It’s the illusion of abundance, and it’s exhausting. Subscribing has somehow morphed into a subscription to stress, with the promise of more content ultimately leading to more indecision.
This paradox is at the heart of the subscription economy. While these models promise to simplify our lives, they often complicate them instead. The sheer volume of options can be overwhelming, leaving us feeling paralysed rather than empowered. And because we’re paying for access rather than ownership, there’s a subtle pressure to “get our money’s worth,” which can turn leisure into a chore.
On the other hand, the environmental cost is also detrimental. The rise of subscription-based retail, with its constant shipments, packaging, and returns, has turned consumption into a relentless conveyor belt. The fashion industry, in particular, has turned the subscription model into a nightmare. Clothing subscriptions send people “curated” outfits that end up being returned, generating waste on a massive scale. In the UK alone, 23% of online fashion purchases are returned, contributing to an estimated 750,000 tonnes of CO2 emissions annually, according to a 2022 study by WRAP. What was intended to be a sustainable model is often a more polished version of the same consumption habits that led us to fast fashion in the first place.
The environmental impact extends beyond fashion. Subscription boxes for beauty products, snacks, and even pet supplies often come wrapped in layers of plastic and cardboard, much of which ends up in landfills. A 2021 report by Greenpeace found that 91% of plastic waste generated by subscription boxes is not recycled, despite claims of eco-friendly packaging. The convenience of having products delivered to your door comes at a significant cost to the planet.
Then there’s the psychological toll. Subscriptions create a sense of obligation, a feeling that we must continue paying for something simply because we’ve already committed to it. This is especially true for services we rarely use, like gym memberships or streaming platforms. A 2023 survey by Statista revealed that 67% of gym members in the UK rarely or never use their membership, yet continue to pay an average of £40 per month. The guilt of wasting money can weigh heavily, even as we struggle to find the time or motivation to make use of what we’ve paid for.
For businesses, this is the beauty of the subscription model: it thrives on inertia. The harder it is to cancel, the more likely we are to keep paying, even if we no longer derive value from the service. This creates a cycle of dependency, where convenience becomes a trap rather than a benefit.
So, is the convenience of subscriptions really worth it? The answer depends on how we define value. If convenience comes at the cost of our mental well-being, our finances, and the planet, then perhaps it’s time to rethink our relationship with these models. Instead of subscribing to everything, we might be better off being more selective, prioritising quality over quantity, and reclaiming control over our consumption habits.
Ultimately, the subscription economy reflects a broader cultural shift towards instant gratification and endless choice. But as we embrace this new way of living, we must also be mindful of its hidden costs. Convenience should enhance our lives, not complicate them — and certainly not come at the expense of our planet or our peace of mind.
The Business Behind Subscription Models: A Cash Cow in Disguise
On the surface, subscription models appear to be the ideal way to build a loyal customer base. And for businesses, they are. The recurring nature of the payment stream is a dream come true, providing predictable revenue and a buffer against the often unpredictable ups and downs of market conditions. As consumers, we’re told that this is for our benefit — our convenience, our comfort, our satisfaction. But the business behind it is an entirely different animal.
For businesses, the real trick lies in making sure customers stay subscribed long after the initial appeal has worn off. This means creating an experience where the thought of unsubscribing is more painful than paying for a service you no longer use. It’s a game of psychological attrition, and it’s working. Subscriptions breed loyalty, and loyalty breeds complacency. The average consumer, faced with the overwhelming ease of a recurring payment, will often continue their subscription just out of habit, not realising the toll it takes on their wallet and their sense of autonomy.
In the battle for consumer attention, this model is an absolute winner. Subscription services don’t just offer a product; they offer an experience. Whether that experience is as innocent as a snack box delivered to your door or as pervasive as an endless barrage of content on your TV, it’s designed to keep you coming back. Even when you know, deep down, that you might be better off unsubscribing.
The numbers speak for themselves. According to a 2023 report by McKinsey & Company, the subscription economy has grown by more than 350% over the past decade, with industries ranging from entertainment to healthcare adopting the model. Streaming services like Netflix and Spotify have become household names, with Netflix boasting over 230 million subscribers worldwide as of 2023. Meanwhile, subscription boxes — ranging from meal kits to beauty products — have become a multi-billion-pound industry, with the global market projected to reach £10 billion by 2025.
But the success of subscription models isn’t just about the numbers; it’s about the psychology. Businesses have mastered the art of creating frictionless entry points — low introductory prices, free trials, and easy sign-up processes — while making it deliberately difficult to leave. Cancellation processes are often buried in complex menus or require lengthy phone calls, a tactic known as “dark patterns” in user experience design. These strategies exploit our natural aversion to effort, ensuring that inertia keeps us subscribed.
The financial implications for businesses are staggering. Subscription models provide a steady, predictable cash flow, reducing the volatility of traditional sales cycles. For example, Adobe’s shift from selling software licences to a subscription-based model saw its revenue grow from £2.5 billion in 2012 to over £15 billion in 2022. This stability allows companies to invest in growth, innovate, and weather economic downturns more effectively.
However, this financial boon for businesses often comes at the expense of consumers. The average household subscribes to four streaming services, according to a 2023 survey by Deloitte, yet many admit to using only one or two regularly. This “subscription fatigue” is a growing concern, with consumers increasingly feeling overwhelmed by the sheer number of services vying for their attention and their money.
For businesses, the challenge is to balance profitability with customer satisfaction. While subscriptions are a cash cow, they rely on maintaining trust and delivering value. Companies that fail to do so risk losing customers to competitors or, worse, sparking backlash that can damage their reputation.
The subscription economy is inherently a double-edged sword. For businesses, it’s a lucrative model that promises stability and growth. For consumers, it’s a trade-off between convenience and control. As the market becomes increasingly saturated, the question is not whether subscription models will continue to thrive, but whether they can do so without exploiting the very people they claim to serve.
The End of Ownership?
Subscription models also herald the death of ownership in its traditional sense. We're moving away from the notion that we need to own things, to instead subscribing to experiences, services, and content. But is this a step forward or a step into a more sinister form of consumerism, where we don't own anything but are constantly tethered to a system that profits off our convenience? The line between ownership and access is becoming increasingly blurred, and I’m not entirely convinced that it’s a change for the better.
In the long run, what happens when we subscribe to everything? When we no longer buy a book but simply subscribe to a service that allows us to read it whenever we want? Is the future of consumerism one where everything is on-demand, and ownership becomes obsolete?
There’s something deeply unsettling about this shift. It feels like the more we subscribe, the less we actually possess. And while businesses are undoubtedly benefiting from this, I can’t shake the feeling that we’re being stripped of something vital. The ability to truly own something, to cherish it, to take pride in it — these things matter. Perhaps it’s time to pause and ask ourselves: in this new era of consumerism, have we traded something valuable for convenience?
A Balanced Perspective: The Other Side of the Coin
While the critiques of subscription models are valid, it’s important to acknowledge that not all subscriptions are created equal. Some offer genuine value and convenience that ownership cannot replicate. For instance, software subscriptions like Adobe Creative Cloud or Microsoft 365 provide regular updates, cloud storage, and access to cutting-edge tools that would be impractical to purchase outright. Similarly, educational platforms like Coursera or MasterClass offer affordable, ongoing access to knowledge that might otherwise be inaccessible.
Moreover, subscriptions can promote sustainability in certain contexts. For example, car-sharing services or clothing rental platforms reduce the need for individual ownership, potentially lowering overall consumption and waste. These models prove that subscriptions, when designed thoughtfully, can align with both consumer needs and environmental goals.
Solutions and Alternatives
To address the downsides of subscription models, both consumers and businesses can take proactive steps. For consumers, being more selective about subscriptions — regularly auditing which services are truly used and cancelling those that aren’t — can help regain control over spending and consumption. Tools like subscription management apps can simplify this process.
For businesses, transparency and ethical design should be priorities. Simplifying cancellation processes, offering flexible plans, and reducing packaging waste can build trust and loyalty. Additionally, companies can explore hybrid models that combine the benefits of subscriptions with the option for ownership, giving consumers more choice and control.
The Future?
The subscription economy is here to stay, and its impact on modern consumerism is undeniable. While it offers unparalleled convenience and benefits for businesses, it also raises significant ethical, financial, and environmental concerns. By critically examining these models and advocating for more sustainable and consumer-friendly practices, we can ensure that the subscription economy evolves in a way that serves both businesses and consumers — without sacrificing our wallets, our planet, or our peace of mind.
Ultimately, the choice is ours: to subscribe mindfully or to let convenience dictate our lives. The future of consumerism depends on the decisions we make today.
S xoxo
Written in London, England
14th March 2025