Subscription services used to feel like a great deal — monthly fees for music streaming, video content or essential apps that provided consistent value. But today, the subscription model has spiraled into a frenzied race for consumer wallets, with everything from bassinets to fitness trackers adopting the pay-to-use structure.
Despite its downsides, this model continues to appeal to consumers, and companies everywhere are taking advantage of this phenomenon.
“There are both demand-side [customers] and supply-side [funding] factors playing into the rapid adoption of this model,” said Samia Islam, an Economics professor at Boise State University. “For startups these days, valuations can be based on their subscription rates. So there is definitely a signal there that’s been encouraging the adoption.”
Subscription models began with the digital economy, gaining traction in the early 2000s with streaming platforms like Netflix and Spotify. The allure was clear: Unlimited access to movies, music or software for a small monthly fee. It was a convenient and affordable alternative to outright purchases.
However, the model has since crept beyond its digital roots. Retail giants like Walmart and Target now offer subscription perks for shoppers, such as free shipping or exclusive discounts. Brands like Sephora and Lululemon have introduced memberships for beauty and workout enthusiasts.
“Even established companies, from furniture to fashion to food, are getting into the subscription game,” Islam explained. “Walmart, Target, Sephora, even Lululemon — we are seeing the bandwagon effect. And as more and more digital-physical products attached to the ‘internet of things’ come into the market, we can expect investor attention to focus more on subscription rates. So, new businesses will then look to the subscription model as a way to secure funding — a ‘positive feedback loop’ of sorts that will only increase the proliferation of this model.”
And then there are the truly bizarre examples: the SNOO bassinet, marketed to sleep-deprived parents, charges $19.99 a month for use of all the high-tech cradle’s features, aside from the $1695.00 price tag.
The Oura Ring, a fitness tracker, offers basic functionality but requires a $69.99 annual subscription for in-depth analytics. This last-stage adoption of subscription models in conventional retail signals a drastic shift from offering luxury to locking in revenue.
The enduring appeal of subscriptions lies in how they exploit behavioral economics. Influencer marketing promotes the exclusivity or aspiration lifestyle tied to a service, making it irresistible. At the same time, companies use choice-bracketing tactics to mask the true cost. Small monthly payments feel manageable but over time they often become a significant financial burden.
Islam broke down why subscription services are so appealing to consumers.
“Some customers may find this attractive for the convenience it offers — not having to keep track of essentials, like Amazon Prime or Chewy,” she said. “But the so-called ‘curated’ subscription business model — such as IPSY, Bespoke Post, StitchFix, etc. — are tailored for a set of preferences beyond just convenience. Customers may like the personalization, exclusivity and anticipation. Subscriptions are a ‘connection’ to the world as well. Not trivial in our device-connected but increasingly lonely and isolated lives.”
However, modern consumer behavior makes us particularly vulnerable to this model.
“As customers, we are all inattentive,” Islam said. “We have too much going on to be able to spare the bandwidth to read the fine print. We generally assume that all consumers are taking the time to do their own homework before they make a choice in the market — but so much of what we do is peer-driven FOMO. Businesses can also use manipulative language — akin to ‘framing’ in behavioral economics — that plays on the buyers’ emotions and sensitivities.”
Some products take this a step further by leveraging fears and anxieties. Islam pointed to the SNOO bassinet as a prime example.
“For example, the SNOO bassinet is supposed to keep the baby ‘safe’,” Islam said. “When parents/would-be parents see that they may react: Without the bassinet is there a chance that they would not sleep ‘safely’? At least that’s the reaction the business is hoping to induce. Often this is how even high-priced items with unsubstantiated claims about features can get the customer to click that ‘buy’ button.”
Consumers also overestimate how much they’ll use these services. That $10-per-month meditation app or $15 wine subscription feels worth it upfront but often goes underutilized.
Companies rely on this psychology to sustain profits, banking on steady revenue streams from consumers who barely engage with what they’ve purchased.
This proliferation of subscriptions has led to economic fatigue. Consumers juggle dozens of recurring payments, many of which they don’t fully utilize. This wasteful hyper-consumption benefits companies, but it leaves individuals financially stretched and mentally exhausted.
On the business side, the subscription boom creates fierce competition and market saturation. Companies like Peloton have faced backlash for overpriced memberships, while Disney+ recently hiked its fees, testing the limits of consumer loyalty.
Islam summed up the current state of the market: “There are so many signals encouraging companies to adopt this model that it’s unlikely to slow down anytime soon. Until businesses see consumers pushing back — or regulatory action curtails some of the manipulative tactics — we’ll probably only see subscriptions becoming more common.”
Consumers have the power to resist by reassessing which subscriptions provide genuine value and which are just financial noise. However, the power to change this trend ultimately rests with companies. So far, they’ve shown little inclination to stop, as subscription models guarantee predictable income and high profits.
The reality? Subscriptions will likely get worse before they get better. Unless regulatory bodies or market forces intervene, the days of paying once for a product may become a distant memory. In the meantime, our best defense is skepticism — questioning every recurring charge before it eats away at our wallets and patience.
