Subscription Fatigue: Overwhelmed Consumers Push Back Against Monthly Fees

On Apr 21, 2023

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Streaming services have become essential and have yet to lose their luster in the “gotta have” category of entertainment essentials. People increasingly stay home with overworked exhaustion and the ever-popular working-from-home options. The resulting popularity of streaming services has led to a significant increase in subscription costs and usage of many streaming services.

The trends in great programming and high demand for these streaming services catapult its popularity — but, as with all things, there is another side to the coin. For example, there is growing concern that the sheer number of such services could cause consumer fatigue and rejection. But is that true? We’ll look in-depth at subscription fatigue, how it affects the media industry, and what mistakes companies make that could end their sweet ride.

The Secret of Subscriptions

The concept of subscriptions goes beyond regular payments. It becomes essential to understand how it differs from other recurring revenue models like leases, rentals, and memberships. A subscription is a payment for the future delivery of a product or service that includes some variation.

While many businesses may use the term “subscription” to describe their model, it’s vital to distinguish it from other types of recurring income. For example, loans, leases, and monthly payments provide people access to a predictable product or service that doesn’t qualify as a subscription. A true subscription model can only garner success depending on the habit strength and usage pattern it creates in its customers.

Nir Eyal, a writer who has studied habit-forming products, has identified four key steps that successful companies incorporate into their customer experience, which he calls the “hooked model.”

Trigger: encourages people to use the service
Action: habitual behavior
Variable reward: satisfies the users’ need for the service
Investment: makes the service more helpful when used.

Mistakes of Companies

Upon closer examination of the “hooked model,” it becomes clear that many companies make common mistakes when launching subscription services.

1. Too many steps

A subscription service that is more complicated than other solutions is likely to fail. For instance, people are often deterred from such platforms and apps because it can take time to find a suitable movie. Sometimes, the time it takes to search for a film exceeds the time it takes to watch it. Netflix, for example, has a vast selection of options, which is quite different from the DVD rental service that initially brought the company success.

In the early days, customers had to open the red envelope, remove the disc, and insert it into the player. There was no need for decision-making or choice since you watched what you had already selected. Netflix has since capitalized on ease of use as a competitive benefit and is now experimenting with a “Play Something” feature that allows users to start watching something quickly. The service also allows you to line up shows in a queue saving valuable thought processes.

However, Netflix differs from offering a curated selection that meets the viewer’s preferences. Ultimately, consumers want to watch content that appeals to them, and anything that makes it difficult will negatively impact the subscription service’s success. That’s why they should combine quality content with maximum ease of use to avoid provoking user fatigue from subscriptions, which we’ll discuss later.

# 2 Reduced variability and lack of novelty

The primary reason people discontinue subscription services is a reduction in variability. When the number of exciting offerings declines and mundane options increase, customers lose interest and seek alternative services, often cheaper ones.

The good news is that a solution exists to maintain interest in a subscription service and increase the variability ratio. It can be achieved by encouraging users to enhance the service through their usage, which brings us to the investment phase.

# 3 No accumulated value

Although many companies neglect this step, it remains crucial to the subscription service success. During this phase, users add something to the product that enhances it. This increases the likelihood of returning to the platform repeatedly. This principle is known as retained value and can manifest in various forms, depending on the nature of the service.

Examples of how subscribers can add value to a product over time include providing data, publishing content, attracting new users, building connections, and establishing a reputation. In…