We took digital services for granted. Now it’s time to pay

As the world adopts digital solutions at a rapid pace, companies offering these services are moving to maximise their profits in every way possible.

Luxury automaker BMW recently announced that it would charge a subscription for heated seats, driving assistance and high beams.

What seemed like a joke initially was actually reality.

While it might seem absurd for a car company to charge a subscription for its features, the future seems to be full of it.

From what can be guessed, GPS, sunroof, entertainment systems and infotainment systems could soon be behind paywalls.

Initially, this move can usher the automobile industry into a new era of subscriptions and microtransactions. For a consumer, the car would have all features, however, some would be pay-to-use.

From a company’s point of view, this would enhance earnings but at the same time, the firm would need higher amount of software engineers to ensure that the service does not malfunction and that the system does not crash.

Given that a consumer is expected to use heated seats on a cold freezing day, a system crash could mean that the consumer would not receive the desired service in time of need.

Moreover, companies operate subscription services on cloud platforms, which tend to crash when they are in high use.

One example is Netflix. The movie and TV series website crashes when a new season of a blockbuster show drops -most recently, when season 4 of Stranger Things was released.

This can very well happen for BMW as well where the company would need a targeted strategy to resolve this.

In addition, such services usually require an internet connection such as Wi-Fi.

However, if a car were to travel to areas which would be devoid of internet then the company needs to know how to tackle that.

Cross industry analysis

While these practices can be perceived as anti-consumer, a lot of industries are implementing them in order to inflate their profits.

Take media houses for example. Most international news websites have put their news/articles behind a paywall and demand a monthly subscription. This is no different than a monthly payment for physical newspapers.

Along the same line, cable television is now being replaced by streaming-services based on a subscription model.

For books, there is Audible and Kindle. Even the video gaming and fitness sectors now depend on subscriptions.

It is not difficult to imagine that the future would be pretty much subscription-based for any service, even the ones that we enjoy for free at present.

In January, Instagram allowed few content creators in US to charge subscriptions from fans, allowing popular users to dabble with a way to make steady money as the platform competes for online stars.

Social media users whose posts draw large audiences help digital platforms generate revenue, hence they are introducing subscription models.

"Subscriptions are for creators," Instagram chief Adam Mosseri said in January. "Creators do what they do to make a living and it's important that is predictable."

He hoped to expand the features overtime and shared plans to integrate subscription in the entire Instagram experience.

In May 2022, TikTok also permitted popular accounts to charge subscriptions for live streams.

Similar money-making tools have been added to Facebook as social media platforms compete for online personalities that attract audiences.

Hacking

One bane for firms offering digital subscriptions is hacking or piracy. Just take Netflix for example. Its content is freely available on select streaming websites or on webpages specialising in content piracy.

Netflix subscriber numbers drop two quarters in a row

Similarly, what BMW is trying to move towards might be easy to hack and may not provide the revenue jump it is expecting.

Take the example of Adobe. Ever since it moved to a monthly subscription model, people either moved to cheap or free alternatives or resorted to use the pirated version.

It is not difficult to predict that soon hackers would get to work and somehow manage to bypass the subscription.

The future is costly

As capitalism intensifies around the world, tech giants are looking to make money in every imaginable way. It is not hard to imagine a future full of microtransactions. They have already penetrated into the automobile sector.

Now, even free digital applications are coming up with payment models by offering some unique features to those users who pay.

Slack, for example, is free to use but premium features are only available to paid users. Similarly Microsoft Office 365 is a subscription version of its office suite which the company is promoting.

Google is selling Google Drive space. Previously, photos used to be stored on it without taking any space but that changed recently.

Therefore, whether consumers are ready for it or not, companies are now increasingly looking to move to subscriptions for applications that we took for granted for a long time.

Maybe now it's time to pay for all the free digital/technology services we have enjoyed. Back then, we allowed them to gather data. Now, we will have to allow them access to our wallets.

The article does not necessarily reflect the opinion of Business Recorder or its owners