Beating Subscription Fatigue

My household hit our personal limit with subscriptions when our baby monitor suddenly requested a $120-year subscription to continue our access to “invaluable sleep data.”

Considering that this monitor costs between $250 to $400 to begin with, we felt like we had already invested enough, and that the timestamps of when our baby falls asleep and wakes up should just be part of how the product works. We ended up coming up with our own “freemium” system of texting one another “baby zonk timestamp” to remember when she fell asleep.

A decade ago, subscriptions were a trend catching fire. Spotify solved the file sharing economy (or lack thereof) with one tidy, unlimited streaming subscription. Apple even followed suit by creating many of its own monthly subscription apps, and now rents out its hardware as a subscription, too. Subscriptions offered access to seemingly limitless content or services, packaged in user-friendly, well-branded tech platforms.

Fast forward to 2024, and the amount of subscriptions we all juggle monthly is staggering. 4-5 streaming services. Exercise apps. Games, magazines, news, recipes, personal organization systems, meal kits, photo storage, smart home, content creators, etc. etc. And those are just personal subscriptions. When you add in the ones you need for your professional life (aka B2B subscriptions) it adds up even faster. Accounting, design, editing, file sharing, signatures, hosting, the list goes on. Coupled with the recent invitation to “add AI” for an additional fee, it starts to become a long and expensive list.

I’ve spent the last few years specializing in branding for the SaaS segment, otherwise known as “software as a service.” In this realm, countless tech companies mainstreamed the subscription model and became an integral part of business with a strategy known as “land and expand.” Offer a free trial, build a relationship and then grow with customers as they scale. Replace outdated systems, creaky old spreadsheets and faulty on-premises products with cloud-enabled, insights-rich alternatives. (You can tell I speak the language.)

This model is objectively superior to its predecessor, which was buying a product with a perpetual license. For example, when you had to buy Adobe Illustrator as a disc (remember that?), it came with a high price tag and then you were stuck with say, Adobe Illustrator v3.4 for several years. In contrast, Adobe Creative Cloud gives you a low monthly fee for more products, with built-in access to new features and improvements. 

As wonderful as it is to tap into a subscription vs. insert a disc in a computer, these companies are facing more competition for the dollar than ever before. Adobe must now compete with Figma (who they tried to acquire), as well as lower-fidelity design services like Canva. As for TV, last year, streaming subscriptions faced over 140 million cancellations. Now, young people are apparently starting DVD and CD collections to avoid losing access to media. (Right when I just “thanked and released” my own.)

I don’t think subscriptions are going anywhere, or that this is THE END OF THE SUBSCRIPTION ECONOMY! I just think that companies will need to be more judicious and strategic about how they build their subscription business model if they want to stay afloat.

To do that, there are a few different levers to pull. I like to think of them as the four “P’s.” If these are set up well, then it’s likely that your subscription will maintain a fair amount of loyalty. The problem is, figuring them out takes a lot of research and analysis, thus why consultancies like McKinsey are often tapped to offer (very expensive) guidance.

Paywall: What is included in the free version of your product vs. the paid version? Is the free version enticing enough to completely hook a user, so they can’t live without your product? And then, once that’s established, are the paywalled features even more necessary? This sounds simple, but it’s actually quite a puzzle to solve. 

Price: Is the price remotely tenable for the audience you’re targeting? Thinking back to our baby monitor, I would consider paying $1-2 a month for sleep data and insights, but $120 a year seems incredibly steep. Considering that parents don’t use baby monitors for the rest of their lives, you only have a few years to capture them as paid subscription users, so you might as well make it worth their while and then expand what you offer once you have them (see Product Strategy).

Promotion: Speaking of free, subscription-based products need to offer free trials. Some of them choose not to. It’s highly unlikely that someone will sign up to give you $5-$60 a month without knowing what your product is or does. While the free trial rules in this world, it can also mean an over-reliance on performance marketing. (Demand generation is the be-all, end-all for many subscription companies, with ruling metrics of “cost per user,” “cost per conversion,” etc.) But this tactic can lead to myopia, as every piece of communication is overly tested and optimized, losing the ability to drive broader awareness sand relevance in culture with unique storytelling and engagement. 

Product Strategy: This one is the biggest, most nuanced and most complicated. It demands that a company look beyond what they set out to do, and plan for the future. It means thinking about not just their current user, but the wider market they could address, and how they could serve them outside of their existing roadmap. Once this work begins, it may require some difficult and interesting moves, like acquiring an adjacent company and its products, and integrating them to offer not just point solutions, but comprehensive platforms. 

Thinking about my baby monitor again. If they truly want to be an insights solution for new parents (vs. a hardware for sleep safety), they might need to think more broadly about what parents want to understand beyond sleep in the newborn months. Product strategy involves carving out a wider category definition, and then figuring out how to expand into that new, uncomfortable space, and how to do it well. 

Solving for paywall, price, promotion and product strategy is a lot of work. If it was easy, Netflix and its streaming subscription peers would be in a much better place than they are now. But they’re at the front of the wave of subscription saturation, and many companies will need to think through these elements in the coming months. Until then, it may be a bubble about to burst.