Maggi and Craig Cameron of Carol Stream, Ill., may not feel like trail-blazers, but they are.
Yes, they are avid fans of electronic entertainment. They rock out to as many MP3 tunes as they want from Napster and watch about 150 DVDs a year through Netflix. They get their fill of blues, comedy and Green Bay Packers games through Sirius satellite radio and have plenty of bells and whistles with their Comcast digital cable and America Online accounts.
But what makes the Camerons the faces of the future is that their leisure choices come with a monthly fee instead of a one-time purchase price. Life essentially becomes a subscription. It is a trend that is growing as more and more people decide they don’t need the deed to a doo-dad or the hassles that come with ownership. Subscribing to services is a better fit for their lifestyle, say the Camerons, because of the time it saves and the convenience it offers.
“It’s the basis of all of it,” said Maggi, an account representative. “I’ve only got four or five hours a day to myself outside of work during the week. I don’t want to wait in line; I don’t want the hassle. I don’t need the interaction with surly people.”
Maggi said she enjoys art-house films and documentaries, flicks that are hard to find in suburban cineplexes or even video stores. To see them, she’d have to drive to and from the city, pay for parking, and perhaps plan to eat out as well. Instead, she walks to her mailbox and slips a DVD from Netflix ($17.99 a month for unlimited rentals) out of the postage-paid envelope before she settles onto a couch in front of their high-definition television.
“I like the way we have the room set up,” she said. “And I don’t have to worry about watching a movie with somebody on their cell phone behind me or listen to somebody chomping on something.”
And Craig, a shipping manager, gladly pays $12.95 a month for Sirius, the satellite radio provider, which offers him blissful, uninterrupted blues or uncensored comedy as he relaxes on his deck or jumps in his black pickup for long trips to the family cabin.
“There’re no commercials, no screaming (car) salesmen,” he said. “It makes a long drive a lot easier.”
The Camerons are much less likely to purchase DVDs as long as they subscribe to Netflix. Signing up with Sirius shows they’re willing to pay for radio, which used to be free.
But Napster represents a watershed moment in the rental movement: While $14.95 a month gives you all the music you want for your hard drive and your MP3 player, there’s a catch. At the end of each day, the Napster device must be put in a computerized docking station, similar to a cell-phone charger. If you cancel Napster, the songs you’ve downloaded won’t play anymore.
“The consumer doesn’t end up owning anything,” said Napster CEO Chris Gorog. “This is really the huge paradigm shift.”
Why are subscriptions becoming so popular? Dilip Soman, a marketing professor at the University of Toronto, has studied the phenomenon with Harvard University’s John Gourville. Subscriptions, he said, have a way of “decoupling,” or separating, the payment from the pleasure of the experience and make the financial sacrifice less painful.
“The timing of a payment changes the way you experience something like Napster,” he said. “Once you’ve made that commitment, it’s now a part of your monthly payment stream. It’s not a lot of money, and it’s often charged directly to your credit card. So the pleasure of the experience seems, psychologically, free.”
In the past, Gorog said, consumers could point to a tangible object, a CD or a video they had bought and now owned forever. But today’s consumers are less interested in owning hundreds of discs and the storage issues that come with it.
“Instead of ownership, people have instantaneous access to anything, anytime, anywhere,” Gorog added. “We think that’s the model of the future.”
Although the new subscription boom is heavily tied to electronic entertainment, experts say the trend promises to spread far and wide. In India, Soman said, you can buy an annual subscription to a series of restaurants that offer you a meal a month; some Hong Kong eateries are planning to follow suit.
“The rental of tools is a business that Home Depot has gotten into,” added Robert Spector, author of “Category Killers: The Retail Revolution and Its Impact on Consumer Culture” (Harvard Business School Press, $27.95). “In a way, that’s a subscription in the broader sense of the word.”
The Camerons say they shopped around before making their decisions, and Spector said it is that type of behavior that is driving the subscription boom.
“People have a greater allegiance to the deal than to the dealer,” he said. “With search engines, we all know what the best price is. It’s really the consumer having greater control because they have greater knowledge.”
Subscriptions aren’t for everybody, Soman said.
“In marketing we call them the “bargain hunters’ or “cherry pickers,”‘ he said.
“They’ll drive across town and spend inordinate amounts of time to use a $1 coupon on a $4 detergent purchase. I don’t believe that subscriptions would work for these people.”
But increasingly, the harried pace of modern lifestyles means subscriptions probably will find a receptive audience among people pressed for time.
“We don’t want to have to drive back to the store; we don’t want to have to pay late fees,” Spector said. “Whatever company can make our life easier, that’s who’s going to get our business.”
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The outlay: About $200 per month
Here’s the monthly cost of some popular home-entertainment subscription services:
– Napster To Go: $14.95
– XM or Sirius satellite radio: $12.95
– Comcast On Demand Digital Platinum Plus: $84.99
– Comcast High-Speed Internet: $57.95
– America Online: $9.95
– Netflix: $17.99 or Blockbuster: $14.99
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(c) 2005, Chicago Tribune.
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AP-NY-06-22-05 1558EDT
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