Wine Friend co-founder Debbie Sutton says the
company’s service is the closest customers will
get to having their own “personal wine tutor”.to which people can contract out their
buying decisions and essentially rent every-
day goods.
Why buy a CD when you can access 30
million tracks from any device for the same
price? Why buy a car when you can hire
one by the hour?
Kym Niblock, chief executive of TVstreaming service Lightbox, says the trend
is about viewers feeling in control. “People
are taking more ownership and control of
their ‘me time’, and choosing how to spend
it,” she says. “The interesting behaviour we
see is binge viewing: people might choose to
watch three episodes of the same show – it’s
what fits in with their lifestyle.
“We also see multiple viewings in
the household at the same time- people are choosing to use
their time to watch their
own shows.”
Lightbox has a
customer relations
programme that monitors
subscriber behaviour in a bid to
keep viewers engaged.
“When people get inactive, we start
emailing them, saying such things as ‘Here’s
the new season of Suits, were you aware it’s
on?’ and ‘We noticed you loved the last
season of Outlander, it’s coming back on
Tuesday and we wouldn’t want you to miss
out.’ We’re letting them know what they
wanted to see,” says Niblock, who is step-
ping down as CEO at the end of the year.
At the forefront of this shift away from
a pay-per-product model to a subscription-
based one are the oft-discussed millennials
- those born from 1982 to some time in the
early 2000s. Younger people tend to be more
technologically savvy and open to “disrup-
tive” technology, and having less cash to
spend makes the prospect of a lower barrier
to entry attractive.
DIFFERENT ENVIRONMENT
A report commissioned by California-based
Zuora, whose next-generation commerce
platform allows businesses to launch and
monetise subscription products and ser-
vices, points to consumers aged 14 to 25 as
early adopters. About 60% of those surveyed
in Australia and New Zealand by research
house Ovum had subscribed to one or more
services in the past five years.
“A lot of young people are growing upin a very different environment compared
with what it was 20, 30 or 40 years ago,” says
Bodo Lang, a University of Auckland senior
marketing lecturer. “It’s a form of voluntary
dispossession, not wanting to own any more
because you can’t see the point in it, and the
entry cost is so high, whereas the entry cost
in a subscription model or the equivalent is
much lower.”
A music subscription service such as Apple
Music or Spotify will set you back $12.99 a
month and a new album costs about $21from the iTunes store. Signing up for Netflix
costs $14.99 for a standard monthly sub-
scription, roughly the same as a movie ticket
or half the price of a new-release DVD.
Dispossession has its positives, Lang says- for a relatively small fee, you can get access
to products, media and ideas you otherwise
might never have seen.
However, it’s not necessarily all good.
“We define ourselves through the
ownership of items, and that goes back
many hundreds and thousands of years to
tools, cooking utensils and weapons in the
Dark Ages, and now it’s iPhones, sunglasses,
shoes and cars,” Lang says.
“If you don’t possess things any more,
you’re just renting them, it’s going to be
different. You’ve lost the ability to seem spe-
cial and to deck out visually your life with
your possessions.”
Successful subscription services rely on
making the experience more personal – they
won’t keep suggesting death metal if you
listen almost exclusively to Taylor Swift.
Personalisation stops consumers feeling
commoditised and ensures they keep paying
for platforms that feel designed for them
even though millions of others use them
too.
Service users are also paying to hand off
decision-making in the confidence they’ll
still get what they like, especially in areas
where they don’t have expertise.MASSIVE CHOICE
Debbie Sutton is the co-founder of Wine
Friend, which home-delivers cases of wine
matched to your palate and preferences.
Launched last year, the business is growing
rapidly and taking on new investment.
People are faced with a massive choice
when buying wine, Sutton says. “In the
modern grocery store, there’s something
like 48,000 items, but the largest category
is wine.”
It’s quite a complex subject, too, and
she says Wine Friend’s service is the clos-
est customers will get to having their own
“personal wine tutor”.
The desire for expertise goes hand-in-
hand with a lack of time, Lang says. Most
people like researching their purchases but
the large number of options available can
be overwhelming.
“Subscriptions take some of that away –
they say here’s a simplified or synthesised
version of something we think is going to
be pretty amazing for you, and most of the
time they’re right.”
You can now get everything from pet
treats to razors to mascara through a
subscription service in New Zealand.
Although under-25s were early adopters,
the Ovum research report shows Generation
Y, aged 26 to 35, and the “silent generation”,
who are aged 71 and over, are fast catching
up as the dominant customers for subscrip-
tion-led goods and services platforms.
Almost a third of those surveyed from
those age groups had bought such a service
in the past year, with fitness and clothing
subscriptions particularly popular.
The disruption has happened – are
companies ready for it? lPersonalisation ensures
consumers keep paying
for platforms that feel
designed for them
even though millions of
others use them too.
NOVEMBER 5 2016 http://www.listener.co.nz 31