The Subscription Trap:

In today’s digital era, subscription services have become a tool of convenience. From OTT platforms to meal subscription, these auto renewal payment models promise to make your life easy. But behind these alluring promises, lies a very dark reality. They are draining your pocket and ruining your financial stability.

Let’s learn more about how meaningless subscription affects your financial well being and how to regain control again over your subscription choices:

The problem is not about impulsive spending but loosing control. Subscriptions are designed to slip under your radar and automatically renewing without your notice. This creates a relentless payment cycle which is hard to escape.

What actually is a “Subscription Service”?

Basically, it is a business model where the customer pays a recurring fee for accessing products or services on a regular or periodic basis. I hope that you have heard about popular “Digital streaming platforms like – Netflix, Amazon Prime, Disney etc.” or “Music streaming platforms like – Spotify, Apple Music etc.” or “Gym & Health subscription platforms like – CultFit, HealthifyMe etc”, they all work on subscription model.

Common Subscription Type:

Some of the common subscription types are-

• Digital Subscription: Streaming Platforms, Software, Cloud Storage etc.

• Product Subscription: Meal Subscription Kit, Skin Care kit etc.

• Service Subscription: Gym, Wellness, Medical etc.

Global subscription economy is projected to $1.5 Trillion by 2025 as per a recent report from UBS Wealth Management. This implies that these services are nearly attached in every aspect of our life.

The Evolution of Subscription Economy:

Previously the culture of subscription was not well known and it was limited to very few products like newspapers and magazines. With the transformation of technology & innovation, most of the businesses are adopting the subscription model to drive up their revenue and ensure recurring income. Some of the famous industries that leveraged the use of subscription-based model are – entertainment, e-commerce, health & wellness, telecommunication etc.

Why Subscription Model Became Popular?

• Recurring Revenue: Businesses like predictable revenues.

• Consumer Convenience: On demand access to services.

• Technology Integration: Apps & Websites made subscription easy and seamless.

The Psychological Trap of Subscription:

• Free Trial Trap: Lot of time subscription-based services prompt you to take free trail days to understand the value of the product or services they offer. If you don’t like it then you can cancel it anytime. But the free trail days are not that simple. You have to sign-up with your credit or debit card to unlock the free trial days. If you forget to cancel before your trail expires, you are automatically charged with the fee that the product or service demands from you. In this way, you can be charged with a hefty fee even though you might not have wanted it.

• FOMO or Enticing offers: Limited time deals or exclusive offers creates a sense of urgency. These marketing traps makes it hard to resist even though the product or services may not be relevant for you.

Subscription Addiction: Why it’s hard to let go

• Peer pressure: When everyone around you is using some latest product or services, it feels enticing to follow even though it might not add any value to our specific needs. We often end up taking these services without having any specific goals in mind. This leads to financial drain on our pockets.

• “I will surely use it” trap: The belief that “I am going to use it soon” keeps us hanging to unmeaningful subscriptions which can be idle for months. The fear of missing out mostly leads to such kind of dilemma.

• The exclusivity factor: Subscription gives a sense of exclusivity and status symbol. Cancelling it can feel like missing out on convenience, comfort, exclusivity and the status that comes with it.

• Emotional Attachment: We often continue paying for subscriptions that no longer add value to our lives, simply because of emotional attachment or nostalgia, even when they’ve become irrelevant.

• FOMO: Sometimes we don’t want to let go of an obsolete subscription due to fear of missing out on future benefits that they might offer. We believe we will use the subscription as and when the release offers to subscribers.

• The Freebies: Many subscriptions come with additional perks and free offerings to their members. These extra benefits entice many customers to subscribe to the services and products that the company has to offer.

How to take ownership of your subscription?

• Audit your subscription: Make a list of all your active subscriptions. Identify the ones you use regularly and which can be stopped or cancelled.

• Set Reminders: Create a separate list of all free trial services and their expiry dates. Set a reminder ahead of time to review each one and decide whether to continue or cancel before the trial ends.

• Pause Subscription: Nowadays many platforms allow you to pause your subscription for any specific period you want (eg- Newspapers, Magazine, Digital Streaming, Health & Nutrition etc). This gives you the flexibility of availing services as per your need. You save money by not paying for the days you don't use the service, helping you manage your finances more efficiently over time.

• Determine the value: Ask yourself honestly whether the subscription that you have opted for is genuinely adding value to your life or not.

• Bundle Services: Take combines subscription of multiple OTT’s (Netflix, Amazon Prime, Disney Hotstar etc.) or other services as it reduces the price than purchasing them on an individual basis.

The subscription economy is here to stay but it need not to drain your finances. By monitoring your subscriptions and assessing the value they add to your life, you can take more informed decision and improve your financial budget significantly. Remember, it’s not about cancelling your subscriptions but using them mindfully.