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Spokane, Washington  Est. May 19, 1883

Forget owning stuff: The growing subscription economy

Maria Fehl packs a monthly subscription box with bottles of strawberry lemonade and blackberry mint lemonade at the Simple Times Mixers headquarters and production facility in Gahanna, Ohio, on Friday, July 19, 2019. (Tribune News Service)
By Kevin Stankiewicz Columbus Dispatch

COLUMBUS, Ohio – Matthew George and his girlfriend, Lauren Biller, had made up their minds: “Doctor Strange” was the movie they wanted to watch.

George thought it was on one of Biller’s subscription video-streaming services. He just couldn’t remember which one it was. Netflix? No. Hulu? Nah. Amazon Prime? Nope.

“You just had to go through all these different buckets,” George, 33 of Columbus, said. “It just gets overwhelming, in general.”

Instead of buying DVDs and storing them on a shelf, Biller and millions of other people subscribe to video-streaming services that bring films right to their television, computer, phone or other device.

It’s all part of an ever-growing subscription economy that shows little signs of slowing. For some, like George, it might already feel overwhelming.

But it’s a trend that, for many reasons – including shifting consumer preferences and the benefits it affords businesses – experts predict will continue expanding its reach.

It’s gotten to the point where there’s an app called Truebill that will help you track monthly subscriptions. You can subscribe to the premium version for $3 a month.

Subscription services for products are particularly appealing for younger people, according to recent research from consulting firm McKinsey & Company. Subscribers are more likely to be ages 25 to 44 and live in urban areas, and the median number of e-commerce subscriptions people had was two, the research shows.

Not all subscriptions are the same, despite their widespread presence. There are those for digital content, where traditional ownership of movies, music or software is forgone.

Digital subscriptions can be attractive because they limit clutter, said Mike Mueller, 33, of Columbus. For Mueller, the music-streaming service Spotify, which costs $9.99 a month, “is a life saver,” he said.

“If I had the same interest in music that I do now, but was living in the ’80s, I’d have crates of stuff,” he said, but that stuff wouldn’t fit in his tiny apartment.

In other instances, it’s about the possibility of trying something new – a new recipe, a new clothing item, a new plant.

That’s why Julie Miller, 31, of Grandview Heights, Ohio, subscribed for two years to Birchbox, which ships four or five makeup and beauty-related products each month, and Winc, a wine subscription.

“It was interesting to get wines that you cannot just get at the grocery store,” she said.

A recurring payment also gets you a product such as ethically raised meat shipped monthly through a company called Moink.

Or you can get two just-add-alcohol cocktail mixers in a box each month from Columbus-based Simple Times Mixers, which just moved production to Gahanna, Ohio. Dog toys and treats from BARK, which has a Columbus office, can show up at the doorstep, too.

Even well-known brands such as Jeni’s Splendid Ice Creams have added subscription programs.

For businesses, monthly subscriptions allow for easier revenue forecasts, and the continuous customer contact increases feedback, making it easier to adjust products or services to fit evolving needs, said Daniel McCarthy, a professor at Emory University’s Goizueta School of Business who studies subscription services.

For consumers, the allure is sometimes predicated on convenience, like Dollar Shave Club, which delivers razors and other grooming products.

While some may decry the growing popularity of subscription services as a sign of laziness, having essential products delivered routinely to your door isn’t a new concept. After all, before refrigerators, the ice man brought ice to homes. It was common for milk to be delivered, too.

The glut of streaming services –which will only intensify as Disney and NBCUniversal prepare to launch their own – aren’t the only subscriptions causing people to feel overwhelmed.

McCarthy said sometimes the physical products being offered come too frequently, causing the goods to pile up. It’s a reason why some people unsubscribe, he said.

“They’re not consuming the product as quickly as it’s being shipped to them,” he said, using a drawer full of razors as an example. “Now when they’re getting them, they’re going, ‘ugh.’”

As both types of subscription services continue growing, it’s important to consider how reasonable it is financially to have a dozen of them, for example.

McCarthy said be believes there is a “non-negligible” amount of people who don’t check their bank statements each month, leaving them slightly unsure how much they spend on subscriptions.

But the more subscriptions people have, the less likely they’ll be able to operate that way, McCarthy predicted, saying it’s easier to spot hundreds of dollars gone each month than $40.

Miller agreed, though she said she watches her statement closely. She canceled both Winc and Birchbox when she was between jobs, a time when she said cutting back on spending was important.

“It’s something to be aware of, because it could get out of control,” she said.