Subscription-based models have taken over the business world. The Subscription Economy Index (SEI), which tracks the performance of companies that offer subscription-based services, reported in 2023 that the subscription economy had grown by 435% since 2012, at 3.7 times the rate of companies in the S&P 500, which predominantly comprises traditional product-based businesses. The subscription economy is expected to reach a market size of USD 1.5 tn by 2025.

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They’ve also taken over our lives. We now pay monthly fees to watch movies, listen to music, and play video games. Depending on the products you use, you might also find yourself paying to use all the features on your sewing machine, your toothbrush, your fridge, or your car.

But we’re losing more than money — subscriptions are changing our relationship with the things we use and rely on in a dangerous way. Now, consumers are expected to buy an expensive physical product and then keep paying to use it. Perhaps the most egregious culprit is HP, whose printers now simply do not function without an ongoing subscription to Instant Ink, their refill service, even with full ink cartridges. If the owner’s payment method expires or the printer loses network connectivity, HP remotely bricks your device.

If what you bought can be legally taken away from you at the whim of the company, you don’t own the product, you’re licensing it. Cough, Microsoft Office, Playstation and Ubisoft, cough.

But to point the finger at any one company, we’d have to go back to the 15th century. The subscription model has been around at least since the invention of the printing press. People interested in regularly receiving issues from newspapers or magazines signed up by writing their initials at the bottom of an agreement document. In fact, that’s where the term subscribe — sub (under), scribe (write) — comes from. By entering this agreement, the publisher earned customer loyalty, and therefore a predictable steady revenue, and in return offered their customers a convenience and/or extra value. In this case, it was the latest issue being delivered to their doorstep.

Media subscriptions as we know them were born in 1948. Cable TV offered paying customers higher quality signals at an affordable price. But people were bound to TV programming. In 1997, Netflix was born, and extended that concept to on-demand media. Going an extra step beyond video rental stores, Netflix offered their customers free doorstep delivery and no late fees. When they relaunched as a streaming service in 2007, they provided an invaluable service — unlimited movies and TV shows on demand that you don’t have to store or return, all for an affordable monthly fee. And through the 2000s and early 2010s, the balance of consumer convenience and monthly fees held.

So how did we get here? The new category of subscriptions where we pay to keep using something we already own all started with Salesforce. What kind of software they sold isn’t important — it’s how they sold it. Since the introduction of purchasable software, if you wanted to install it, you’d buy a CD-ROM and use it for as long as you’d like. Back then, technology was advancing so rapidly that new versions of the software would be released each year with a ton of new features, prompting existing customers to shell out for newer updates.

And then, in 1999, Salesforce pioneered downloadable or cloud-based software. No manual install, no big upfront costs for software that would be obsolete in a few years — just a small monthly fee, and you’d always have the latest version. Software was no longer a product that you buy in a box, it was a service that you paid a monthly fee to use.

It was a huge success. Salesforce went public in 2004 and was the top performing IPO of the year. And everyone followed suit. In 2010, Microsoft launched Office 365, the Office suite to a subscription-based offering. Since then, Microsoft has seen a 187% increase in revenue, from USD 73.7 bn in 2012 to USD 211.9 bn in 2023, much of which was driven by cloud and subscription services. Adobe went subscription-only with Creative Cloud in 2013. Most people still consider Apple a products company, but lately, their fastest growing revenue stream is their USD 25 bn subscriptions unit, which grew 12% last year.

But people are sick and tired of having to pay subscriptions for everything, says the Wall Street Journal. Well, we assume — the WSJ article is locked behind a subscription paywall. Investors love software as a service, but where’s the customer value? Today, Adobe Photoshop costs USD 276 a year, which is a cheaper upfront cost than the USD 600 you would have paid for in 1990, but in less than two years, you will have exceeded the cost of software that you would have only needed to upgrade every 2-3 years.

What additional value are you getting for the increased cost? Not much. The software isn’t really improving drastically enough to warrant a continuous payment. Word also hasn’t evolved that much since 2006 except for a few stylistic changes. RIP Clippy. “Over time, companies have seen this as a new way to squeeze some extra money out of consumers,” law professor Aaron Perzanowski told More Perfect Union.

And so, subscriptions crawled out of our screens and into our physical belongings. “It became really cheap to introduce network connectivity and embedded software into devices,” said Perzanowski. “So we see all sorts of things that don’t really need software, that don’t really need a WiFi connection, that now have them.”

When manufacturers advertise smart products, the software is a selling point, promising all sorts of flashy features. But smart appliances have shorter lifespans than regular “dumb” ones, and turns out people don’t even use all those fancy features. Plus, software gets buggy and needs a lot of maintenance. If you’re relying on something important and the software glitches, it’s actually making our lives less safe, less durable, and weirdly hostile.

All by design. HP CEO Enrique Lores told CNBC’s Jim Cramer (watch, runtime: 7:30) in no uncertain terms that this business model is a shameless cash grab. “Our goal was to reduce the number of what we call ‘unprofitable customers.’ Because every time a customer buys a printer, it’s an investment for us. And if this customer doesn’t print enough or doesn’t use our supplies, it’s a bad investment.” By Lores’ admission, subscriptions hope to make money off of you just because you own their product. “Those kinds of subscription offerings aren’t adding new value,” says Perzanowski. “They’re imposing a tax on using the things that we [have] already paid for.”

Computer everything: Section 1201 of the US Digital Millennium Copyright Act (DMCA) was passed in 1998 to prevent piracy, and it applies to anything with a computer in it. When the law passed, that meant PCs and DVDs, but now it’s everything we own. And companies use copyright as the legal covering to lock us out of our own stuff.

You’re not paying for convenience anymore, you’re paying to not get inconvenienced. Subscription-based companies don’t care how miserable our experiences are as long as they make a profit. Now, companies don’t have to earn our loyalty to get that predictable revenue, they can just force it with their software locks, legally protected by our outdated copyright laws.

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