Sunday 18 August 2019

Adrian Weckler: 'Is my €200 digital bill normal?'

Amazon Prime and Netlfix show the subscription model is here to stay
Amazon Prime and Netlfix show the subscription model is here to stay
Adrian Weckler

Adrian Weckler

A colleague recently moaned to me that his monthly TV, broadband and tech subscriptions had "gone through the roof". How much, I asked?

"It's at €90, can you believe it?" I said nothing, but inwardly thought: you're getting off lucky.

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In the past five years, my monthly subscriptions - across TV, music, films and online services - have gone up at least three-fold. I can't be the only one.

It's not just Sky or Virgin, or broadband or mobile contracts, which themselves match the €90 my colleague is currently spending.

It's almost everything I watch or listen to.

A brief look through my credit card bill shows the following debits:

- Spotify: €15 (family subscription)

- Netflix: €11

- Dropbox: €10

- Google Drive: €10

- iCloud: €10

- YouTube Premium: €16

- Amazon Prime: €10

That's €82, not including TV, broadband and my phone, which would bring it closer to €200 per month.

Now you could argue that this is a little indulgent. Do I need three monthly storage plans? Probably not. But I don't think I'm the only one to have got trapped in legacy ecosystems that are difficult and messy to untangle.

YouTube Premium is a relatively recent addition. But the advantage to this is that it lets you download videos to watch offline and listen to regular videos when the screen is off.

That's good both for frequent travellers on planes (me) and also for people who use YouTube effectively as a podcast engine (me).

Amazon Prime is a monthly subscription for the video, but also for the free shipping on online purchases. I find that over the course of a year, it more than pays for itself.

But these are just the leisure subscriptions. There's another bundle, mainly in tech and media, that is work-related.

And then there are the slightly exotic subscriptions you might wonder about, like LinkedIn Premium, which costs €30.48 per month.

I usually subscribe to this for about one month of the year, simply to go through a stockpile of work-related items I've been wondering about.

(Otherwise, I find LinkedIn is purely a recruitment form. Its most active users in my network are people who are generally on the make.)

Is €200 per month a ridiculous amount to spend on subscriptions? I don't know.

Before Spotify, I would have easily paid €15 per month (or maybe twice that) on music, either through downloads or CDs.

The same goes for Netflix replacing physical DVD boxsets.

As for things like online storage, there is an argument to be made that some of this is income that would have gone on photo-printing anyway. (A small amount still will, but not as much as a few years ago.)

Of the services listed above, I'd probably survive with Netflix (€11), Spotify (€15) and one of the online storage options.

The TV package, which includes some premium sport, may also be expendable (although I'd probably end up paying some pub a tenner per match in watery beer tolls).

Neither my broadband nor mobile contract is in any way replaceable.

My €200 per month does not include any 'freemium' in-app purchases or upgrades. Yet this is now one of the fastest-growing ways for businesses to monetise things online.

Anyone reading this who has a child that plays Fortnite will know exactly what I'm talking about.

Mary Meeker's recently published Internet Trends report predicts that this will increase steadily.

Does any of this provide any hope for traditional media, most of which sees free online models supported by advertising withering quickly?

A little. The challenge for newspapers (in particular) is that they are not competing with print sales or other online newspapers. They're competing with YouTube, Spotify, LinkedIn and most of the other services I mention above.

Logically, for me to subscribe to a newspaper online means I either have to drop one of my existing subscriptions or take my monthly bill beyond €200.

This environment is both good and bad for media ventures looking for your monthly cash.

On the one hand, there's now a growing, proven market. People will pay for things.

On the other hand, those already in the market with subscription products are way ahead.

Not just in terms of an existing subscriber base and early mover advantage, but in having experience of how to run an online subscription service.

It's quite hard. When I revamped the Sunday Business Post's website in 2011, a fundamental part was to launch its first paywall subscription service.

This was the first mainstream newspaper in Ireland to do it. The hardest thing about it (by far) was managing the customer experience. There were 100 different things we had to adjust, sometimes painfully so. There were always glitches.

I led a very small team. Although we managed to get to 1,000 fully paid subscriptions within about a year, we could have at least doubled that had I known then what I know now. A good chunk of that was in building out a customer experience team.

I suspect that those running the paywalls for The Irish Times and The Times Ireland will have found the same thing over the years.

But I do know that the era of subscriptions is well and truly here.

For all the moaning that luddites and fogies do about internet users 'wanting everything for free', younger people are the ones who are leading the way in paying for things on the internet.

And it looks like mainstream services have figured out a way of striking a bargain for them.

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