Growing up I remember being intrigued by adverts for the Britannia Music Club on the back of the Sunday supplements. You could choose four CDs for £1 each – which was a bargain at the time – so long as you committed to buying more CDs at full price in future years.
I did not join – the music choice was too mainstream for my teenage tastes – but the business model was interesting.
The origin of subscriptions is hazy, but stretches back hundreds of years. Club memberships have been sold on a rolling basis since the Middle Ages. Charles Dickens sold his novels in monthly instalments. Magazines, gyms and trade bodies all sell subs.
The web introduced a raft of new subscription services. For a small monthly fee you can be entertained for hours by Netflix and Spotify; store your files with Dropbox; and get all your stuff delivered next day for “free” with Amazon Prime.
Now there is a new generation of businesses selling boxes of goodies on a subscription basis. Graze will help you discover healthy snacks. Birch delivers personalised beauty treats. Origin sends delicious coffee straight to your door.
Even local farmers are getting in on the act, with some offering to deliver a box of seasonal fruit and veg in return for a monthly fee.
For customers the benefit is clear: it takes away the hassle of repeat purchases.
And I definitely do not miss paying late fees to video shops, or buying albums and discovering I only liked a couple of songs.
The advantage to businesses is also obvious. Regular predictable income means companies can plan and commit to growth.
Subscriptions give businesses an opportunity to make their product or service a habit, and habits are hard to break.
There is a reason why many subscriptions start with a 30 day free trial. Once you become accustomed to getting a nice parcel through the letterbox every month, or staying up late to binge watch great TV shows on demand, it is mighty hard to hit the cancel button.
All of which helps explain why Unilever bought a subscription start-up called Dollar Shave Club for $1 billion last year
