Design Services as a Subscription Model? w/ Ron Baker
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- Опубліковано 28 вер 2024
- In this video, Chris Do and Ron Baker discuss the power that brands have to attract customers via subscription models, and how these subscription models, if leveraged correctly, could mean the future for all consumer relationships!
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IMO, subscriptions typically do damage more the poorest groups of society. Rich and mid-high class can buy whenever (the poor only can have the tactic to use some money to purchase whenever they can in the year, and if they can), pay every month on top of whatever. The poor are already immersed in bills (specially gas, water, electricity, and rent, this year). Indeed, many of them unable to pay any recurring payment for being already in debt, etc. Subscriptions make you pay every month, whether you need the service that month or not. Again, an efficiency loss in money terms that the wealthier don't mind much, they don't need to make every penny count, at all, and can afford in exchange of more comfort (the 'hassle free house' mentioned is an example of this: most people in lower classes will change the bulb themselves... if they can afford a new bulb, that is), speed of the service, etc. This enlarges the gap between the two groups, and helps in the destruction of the middle class as such. Which, BTW, is a bit the "way of the dodo", as countries' economies survive and even thrive mostly thanks to the middle class consumption, not the richest people's (contrary to what many think...). But as the middle class gets poorer and poorer, it just ends up melting with the lower classes.
Also, this helps monopolies, as they have the market inside their fist, versus small companies, whose only option remaining is to try to actually grab the clients not willing to pay subscriptions. But the gap is eternal, and even more, it typically increases in favor of the huge companies, again reducing competition, which is terrible for the consumers (and for the market, as well). In a time of enormous global crisis (Europe, US, etc, and the third world in worse conditions than ever) , the increase of this system, in my opinion, is not good news. This is why I support companies like Serif (Affinity Photo, Designer, etc), or BlackMagic (Davinci Resolve), and open source movements (Blender, Krita), versus the monopolies in our field: Adobe (the Adobe Cloud), or how the 3D world has gone TOTALLY to a _very_ premium side, 3D apps to just become tools for the big companies and high class society: 3DS Max (270 euros/dollars per *month* ), Maya, the same.
And yes, even while you then get to taste some "premium" products with this system, you get to _own nothing_ , as many others are saying. Of course, for the wealthy, this is a very smart operation: they keep owning the super premium product, but make even more money instead of letting the expensive car taking dust in the garage (for example).
I can understand how very established design firms can be eager to get on the wave, though... But, besides those being a minority in the total number of designers and artists, imo, it ain't pretty.
Perfect summary
Wow, loved your view point
I think there is a time and place for subscription services, no doubt the future of transportation and even utilities are adopting the subscription model. What was it the world economic forum said "you'll own nothing and be happy" Personally, I don't buy into it and for several reasons. As a consumer and a creator, I find it very irritating trying to keep up to date and managing all the vast arrays of subscriptions. I prefer paying for something outright, upfront and with no hidden costs. This way I know I own the product or service I purchased, and if I want to upgrade at a later date I will buy it. Subscription services can create customer loyalty with it's subscribers which means they are invested into the product or services of the subscription, and thus preventing their customers from buying from competitors. But if you are like me which many are, subscription models can actually reduce your target market. For example, I do and I'd rather voluntarily donate £50-£100 per month to Blender Foundation than pay a subscription service to Maya or 3ds Max even though in some cases it can cost a lot more. The reason why is because it gives me the freedom of choice, having that freedom to choose rather than finding myself heavily invested / locked into a product/service. Another issue is that if I am subscribed to a service and making good money from the service in a particular month, and then the following month I make nothing, I then loose my ability to pay for subscription charges and in turn loose access to the tools I was heavily invested into. By paying upfront, or financially supporting opensource projects prevents this from ever happening, it gives me a peace of mind and freedom to develop at my own pace. I wouldn't adopt a subscription model for my specific creative services, it wouldn't fit with me or my clients. That said, and as I mentioned before, no doubt there is a time and place for subscription services, but it is still a service model I try to avoid at all costs both as a consumer and as a business owner.
Aye there’s the rub “you don’t own anything” we’re actually experiencing this with entertainment. Yes you may have your fav movie “on tap” but eventually the server serving that media can one day remove and or change the thing you always liked. Since you don’t own it, it changes and probably not in good ways. This is why I don’t update Adobe. Yes Because of the sub service it gives me the latest and the greatest, but it inevitably breaks with third party services and troubleshooting Adobe these days after an update is almost a full days work before I get any work done. Compare that to the sub model of Canva. Templates with out the fuss, Almost instant graphics on tap. If the world is heading that direction then creativity and innovation becomes stymied and removed. But that’s not important right now.
I don't think that realistically applies to design services as a subscription.
You still own the end products the service provider provides (in a normal scenario), even if you cancel the subscription.
"The idea about subscription economy and its recurring value..."
Brilliant; amazing conversations👍!
So as an example of how this plays out, pre-subscription the Adobe Creative Suite upgrade was about $600 every three years. Now with subscription it's that much every year. That's why companies love this, it's a lot more money and it's coming in at a predictable rate. And for the customer, you get a little more for three times the cost.
Time to cut the cord and stop the rip-off.
Exactly, but people can’t tell they’re spending more because it’s in small increments over a long period of time instead of one or two payments over the short-term. It’s why credit card companies and banks stay in business. People are willing to commit to purchasing a big ticket item when the cost is spread out over time rather than having to pay for it all up front. & thanks to interest, you wind up paying more for whatever you purchased.
I recall it being much more expensive than that. The creative suite was $1500 and wasn't as extensive as it is now with pretty much everything Adobe makes.
@@thefutur It wasn't as SLOW as molasses and BUGGY either. Apparently subscription solved none of the issues plauguing apps like After Effects - why would they? They have your money already.
@@sargonassarg4356 Actually, I remember many more new features with each launch of a new AE version (they had to "wow" customers, I guess). And between, say, AE 2019 and 2022? Barely any new meaningful features. Though AE 2023 should indeed introduce new fundamental improvements. Took them 3-4 years..
@@thefutur The first time you purchased the Adobe suite, it was some crazy number like 1500. Once you purchased it, the upgrade cost every few years was at least 600 dollars. Usually there was very little improvement to justify the upgrade cost even at that time. I remember waiting for every other upgrade to pay for a new update. Adobe usually filled their updates with shiny but useless "upgrades" to sway purchasers - didn't work on me. Now I have rejected Adobe entirely and use other programs instead.
In B2B, we are already seeing a shift from subscription to consumption based pricing. You pay for what you consume instead of paying for the whole portfolio whether you use it or not each month. Consider zipcar's higher tiers. The fee you pay each month goes towards your driving credits. The alignment comes in the vendor needing to provide such great value that the customer is happy to consume more.
Transactional to relational? Yeah... a bad relationship where you are being forced to pay for something that was conveniently a one and done. Absolute crap in my opinion.
This is not a new idea btw.
20 years from now, the market may do a 180. Imagine a marketing campaign where you look back at everything you DON’T own. Stop paying for a subscription and OWN what you buy.
This is actually a bad pitch. Not everything works well with a subscription... just like there are many areas that CAN benefit from subscription.
you will own nothing and be happy...
- WEF
This spreading Subscription ideas honestly makes most customers feeling trapped and drained of money. At least transactional business made it clear what the client get and what the business will deliver and brand trust and services MAKES it a recurrent thing. not this sombre contract trapping you into spending more than you know you would have paid 5 years ago.
Don't force the recurrence of a service to someone by adding dozen on add-ons we will never need want or use. It only massively benefit the company and actually damage the trust of happiness of a customer.
It works in entertainment as its a ever evolving unit of product given. Small swappable products. not tailored unique services.
if you don't like it, why buy a subscription?
@@thefutur since it becomes the single only option to get a lot of services, customers are forced into it. Works well for a certain class of product services, but saying everything will have it pushes the idea of trapping a customer with endless loan like payments with gimmicky add-ons for the sake of the business revenue safety.
It will work with balance. Claiming all of it will work being subscription is the problem
Excellent point of view.
Awesome, love the clarity on relational versus transactional relationships. Can you point me to the FULL interview?
Where can I find the complete podcast?
on the Futur podcast.
Our mentality switched after the 70's.. We went from commercial, to too commercial. Look at for example old electronics, that we can still use.
This guy is selling 21st century snake oil.. ugh..
Q: what about subscription based on performance instead of a fixed fee.
Let's say I have a software which goal is to increase youe compant sales and instead of charging a fixed 25 dollars a month for a SaaS I charge 1% of total GMV which pass through the system.
Don't know what GMV is but this is genius. If you are promised your next salaries to come no matter how you perform- of course you will get lazy and take your customers for granted. If companies have to work for it and come up with a product launch that Wows everyone- then they actually work to improve the product.
With subscription - there's no performance dread.
Well, my takeaways from this video are:
1. Porsche has a subscription model, so my business should have a subscription model as backup
2. Subscription is a flexible model for customers as they can switch easily
3. Businesses can use the subscription model to gather data about customers and improve their experience
4. Subscription model will make the market more competitive and the profit margin will depend on the volume
Subscription = believe what we tell you or we will cut you off from society.
Unfortunately this
Subscription models, in their current form, are no more than fanciful racketeering. Beyond that the companies focus shifts from creating better product to getting more recurring charges. Look at Adobe if you need an example of how a product will use 20 year old junk code but charge you monthly so they can run ads with Billy Eilish and convince kids subscription models are great for them. Meanwhile the products stagnate.
This will contribute further to the collapse of society. "Relational" is superficial.
It’s giving Klaus Schwab, “You’ll own nothing and be happy.” Honestly, everything doesn’t need to be subscription-based, especially if it’s not continuing to add actual, lasting value. Rich people got rich by taking ownership of things. Renting leaves you with nothing at the end of the day because if you stop producing (making money & spending it) for ANY reason, you’re literally left with nothing for yourself and nothing to pass on to the next generation. You’ll never be able to amass wealth. This subscription-based living is essentially just borrowing everything. Even the Bible says that the borrower is a slave to the lender. & That’s exactly what we’re becoming, generations of slaves to the people that actually own everything.
Bravo!
Exactly. Subscription is a way of control, because it ain't yours really. And so there could be conditions set for you to even have the right to use that service/product. If you owned it- you could use it as you'd like more or less. But, if you borrow it, and the owner/company doesn't like your face-then you can get banned/canceled.
Problem is, we don't have control over this. If all companies will go that route- this will be the new way of living, as our buddy, Klaus, loves.
Look at the whole Netflix scene. People have gone crazy. I bet there are people subscribing to Netflix+HBO+Disney+Amazon paying 4 companies each month. This is insane. You won't have enough left for food :) I wonder if companies will lose from that model if the middle class won't be able to afford it.
Well said. In many cases it definitely makes sense. But this is just hype. And you really do have to wonder who is influencing this. “You’ll own nothing...”
@@eladbari guess what? here in New York state the middle class will disappear especially with the $15 dollar amount hour artificial increase. who's going to pay for that? the middle class.
We live in an age of fast fashion, fast car live expectancy and fast products. We consume more, nothing lasts forever. It make sense to use that approach when the clothes you wear falls apart in a year and your Mercedes needs a full engine replacement in 3 years. It's not like Klaush Shwab invented it. The game was rigged from the start.
The wide-spread use of subscription models has become more predatory than helpful. There isn't an argument against this, period.
in some cases but not all
Subscription models actually allow us to access various services at a reasonable price, giving us the flexibility to only pay for what we need or want. It's not all predatory.
It is interesting to you chose ", period" in that way, though 🙂
You will own nothing and be happy, but people that are sleeping think this is "the future" as if it is a good thing
Kinda glad to see these comments mentioning this, this is exactly what is being forced upon us all.
Gen-Z will swallow everything they advertise at them. These companies basically own the new generation's brains. Kids don't know how it's used to be so they can't tell good from evil
"The Subscription Economy" is just a euphemistic framing of rent-seeking behavior by businesses and corporations.
subscriptions makes me angry
"You're covered if you need this" LOL. Thing is I don't ACTUALLY need this 24 hours a day. . . so I'm basically throwing money at something. . . IN CASE I MAY. . . NEED it sometime in the future. . . that's basically throwing money at something. This works for insurance but it doesn't work really for everything else. . . I also have issues with the insurance model.
Insurances in the US are broken. Especially health insurances.
I am not in the US and I'm glad that I pay insurance even if I don't need it that specific month, because I know that when I will need it, they'll cover more than I would pay them in my whole lifetime.
@@KiraFriede where I am from you cannot operate a vehicle without insurance. Its a legal “scan” to keep the insurance companies with a guaranteed income protected by the government. So yes in one way it protects the individuals after an accident but the paypits are jever enough to cover the whole thing, you’re still never covered by vehicle insurance. But thats for another discussion
I've been a freelance videographer for the last 7 years. I use 2 different editing programs. DaVinci Resolve uses a one-time purchase model. In 7 years it's cost me a total of $300. Adobe Premiere Pro uses a subscription model. In 7 years it's cost me $6300. Needless to say, I'm not a fan of subscription-based businesses.
in this example Jordan, sounds like a fixed one time purchase was a better value for you.
Exactly. Subscription is good for the service provider to yank more out of a customer. Out of the right to use the service, because, what if you don't use it daily or weekly? Waste of money.
One time purchases are almost always better than subscriptions. It’s only clueless rich people and Americans working for big companies that peddle the subscription model that will tell you otherwise. It makes sense, cause it makes them a ton of money so they’re big advocates for it. Personally, I’ve saved so much money by ditching Adobe Creative Cloud rubbish and switching to free/one time purchase software. I’m also an avid user of DaVinci Resolve, Blender, Affinity… I’m only waiting for a Lightroom alternative by Affinity then I’m ditching that hot garbage of an Adobe app too. The thing is the one-time purchase software is actually way better and more well rounded than the rubbish subscription software because the devs know they have to deliver an amazing product or risk failure. I don’t subscribe to streaming services anymore, I just buy stuff on Apple TV directly or I try before I buy via other methods.
@@JacquesCoetzerAU There are alternatives to Premiere [Davinci], but for After Effects? That's the problem. With all the nice scripts/plugins and community, I don't see alternatives now.
And, yea, the rich class doesn't care how many subscriptions they have. They probably don't even bother checking how much it all adds up to each month
We truly are in the worst timeline, guys. This is the proof.
Rancid American capitalist culture. I'm in the UK and hopefully we can do enough to keep it at bay.
how?
Consumers are backlashing against subscription for everything.
they are? how so?
@@thefutur I posted a reply with a link to a verge article but my post seemingly got removed. BMW now has subscription heated seats, there was a huge backlash to that. I think subscription works for some things, but not everything.
@@thefutur Look at the success of new design programs like Affinity and Vectorstyler and others. one of their main selling points is that they are not a subscription
This is why I'm taking steps to move towards a simpler life where amongst other things I'm not dependent on subscription services (where possible), digital worlds such as social media, the cashless society (again, where possible).
I'm currently transitioning away from the creative industry for various reasons including cheap outsourcing, Fiverrr culture, Canva, etc. To one that can't be outsourced to someone in India, and is more hands on. I'm not going to live in a hut with no electricity, but have decided I'll have more value by reverting to a traditional hands on skill that will always be needed.
I think its all part of a backlash to what Covid created and I feel better for it.
If you think you'll be able to escape what's coming, you're sadly mistaken. Subscriptions will extend to every facet of life; including skilled trades like plumbing. Automation is also coming for you.
@@sargonassarg4356 Imagine how many companies/services you'll have to pay each month -just for the right to use them, even if you use them 2-3 times a year. It's insane.
People won't have money for food. Or maybe food will also be via subscription...god help us.. :\
Here's the problem. The subscription model works great for services that scale fast and efficiently. Design does not scale fast, nor efficiently. It still involves a lot of human capital / labor.
Subscriptions also inherently devalue the service provided. This is why value pricing works so well. Value pricing lets me solve your specific problems based on what it's truly worth and build a relationship at the same time.
The only place I can see a subscription model working effectively in design is in a niche you've identified to have a common re-occurring problem that you can gauge the cost to resolve for repeatably.
Nassim Taleb calls it and rent seeking behavior. A better definition is parasitism
Subscriptions are ideal for luxury markets. Here's a mind blowing observation: health insurance can be replaced by actual hospitals and medical professionals! No insurance necessary. No subscription. Because everyone has this fundamental relationship with democratically accountable govt guaranteeing basic public infrastructure. It transforms a strictly transactional relationship into one where the relationship itself becomes the focus😇
Yikes.
True and insightful forsure. But not a groundbreaking idea. Renting, leasing and monthly payments have always been a fixture of the consumer economy. The subscription model is just popularizing what banks have been doing for centuries
were you expecting it to be ground breaking?
@@thefuturI’m constantly surprised :)
I think subscriptions could be beneficial depending on the service and the demand an individual has for that demand.
For example, the Porsche subscription makes no sense to me cause I have my car which I know and fix when necessary so it would be a waste of money when I think of how much I actually go out.
I think it depends on target audience really
Good for business, bad if you have any moral compass at all.
you don't subscribe to Netflix? you prefer buying DVDs and storing them? you prefer buying CDs vs Spotify or Apple Music?
@@thefutur I think we'd prefer buying films and music as a digital file we could easily store ourselves, in the highest possible quality DRM free. I don't subscribe to Netflix or any streaming service because I don't watch 99% of the stuff on there. I value having immediate offline access to my media, and I'd prefer to host my own media on my own media server if I need to access it on the go (my internet connection is fast enough for 4K video upload). I do also own physical copies of 4K Blu Ray movies, and Warner Brothers/Universal Studios/etc. cannot knock on my door and remove access to my physical media like they can with streaming services.
The dystopian “you don’t own anything” future is getting closer and closer. 😕
digital crowd is living as if there is no tomorrow.
as if all stocks will end today. as if all clients will stop working tomorrow.
everyone is running so fast.
It’s a scam. With subscriptions I buy what I want and a lot of junk I don’t need with it. Plus it’s hard for me to keep track of expenses.
do you have an example of a subscription that is full of junk yet still pay for?
This reminds me of something i saw in cyberpunk 2077 edgerunners : they don't treat you if you don't have a subscription with them. It scary stuff
That’s what Amazon’s goal has been for sometime. Get everyone on Prime.
Commies are back and Chris is so exited about it! Hehe, cheers from Poland!
Not everything but sadly a lot of corporations are falling to subscription models just to satisfy infinite greed. but hey, by 2050 "we will own nothing and will be happy"
Any examples?
@@thefutur Adobe, Corel, EA.
'they know everything about you' ... yeah thats a great idea!
Dead giveaway :)
I was listening to this, recalling similar encouragement a few years back from another source, and I've been trying to think of ways to mold my model into a subscription. Interesting topic!
Me too
Apologies, but I'm not here for *any* defense of "Every aspect of your life will require a rental fee." This is already bad enough with things I don't strictly need for life; Netflix, Hulu/Disney...Adobe. Tesla is now charging you to "unlock" features already built into the *&@%!ng car. This whole "it'll be relational" spiel, is, again with apologies, horseh*t. Everything is converging towards hegemony and monopoly, and these Megacorps will have ZERO incentive to be nice to you when they know you have nowhere else to go(or their "competitors" are engaged in the same lunacy). Embrace FOSS, support locally, and reject this garbage in it's entirety.
What’s the gist of this video ?
Trying to spin the worst, most predatory business model in the history of human existence somehow as a positive thing... Typical American corporate greed.
that some people are REALLY out of touch with the common man
Jacques got it. Subscription models are predatory and anti-progressive to the industries they infect.
Idk this guy has some positive great stuff then they come up here with this stuff it's like they got bought out by WEF this is extremelly predatory and awfull, and artsy people make mental gymnastics to justify this awfull thing, I'd rather pay 5x and own something, imagine that they want you to vote for the left and if you don't they will just simply take away your subscriptions, this is a comunist nightmare
In a way, did this come full circle back to selling time? Just by the week/month as opposed to hour?
I actually really like the relationship focus of it. I guess I’m just wondering how scope would be managed. I’d have to charge a massive subscription fee for a “here for all your needs” service.
I’m going to interview someone who has a subscription design service to see how it’s done.
@@thefutur I’m curious to hear/see. I’ve been thinking on it.. The idea is cool, but just seems sketchy at scale.
How is this scalable for a construction company ? Especially when clients are here for a one time thing such as a kitchen remodeling once every 20y or if a multi property owner would abuse the monthly service to get the maximum done and getting a bang for his buck ?
Subscriptions are great if it makes sense to have one, but yeah, not everything needs to be or should be a subscription.
not everything needs to be.
MOST things should not be subscription
I sell digital content on a marketplace that turned into subscriptions a few years ago. What I can tell is that the only ones profiting from this business models are: the owners of the marketplace, and subscribers. Authors are paid peanuts compared to the service they provide.
Wait, so with that move to subscription- this means you also get a steady stream, but instead of a random 20$ sale of your product- you get 2$ each month?
@@eladbari yes it's a steady stream, but who knows how many downlads it takes to generate 20$ from one item via subscription.
@@TheRickyloca Exactly, so it's like they dumbed down your 20$ product into a 2$ value one. Insane, seriously. And without them- you don't have the means to market it yourself. Damn...
@@eladbari I call it digital slavery. People have been investing years in developing a portfolio, just to see all the agencies turning to subscription almost overnight. Now, why people should spend 30$ on one item when they can subscribe for 30$ and have free access to millions of items?
@@TheRickyloca I see it clearly now. It all comes down to whos the owner. Beforehand you were the owner of your digital product and you got the major cut (how much did the hosting website got btw from each deal?).
But, now with subscription - they became the owners of everyone's products, so the 30$ goes to them and not to you. This smells like theft, man.
too tiring to listen to such a heavily edited video; you got rid of all the normal authentic gaps.
Chris, where is the full version 😂
I’m dying to know it
It’s out now.
@@thefutur ok that’s great
Thank for your sharing
Now I started my channel to share something that I have learned too
All of because of your inspiring.
I watch your videos everyday. At least one a day
Every time I watch I always learned some new
Subscriptions can be leveraged depending on your perspective and the service
How does a subscription plan differ from a retainer plan?
Probably one of the most interesting and thought provoking interviews to date.
I recommend this crack
So businesses complained for decades about taxes, to allegedly be able to make their products or services more affordable, and now are implementing a taxes-like system for their products or services.
how so?
@@thefutur Theoretically a State is an organization that provides citizens with basic services paid via taxes, very much like a subscription fee. This switch of companies from one-time transactions to a subscription model is more a kind of decentralization of what a State does/should do, with single companies providing for specific services. My provocative thought is about the private sector's demonization of the very concept of taxation, while the point probably should have been to improve efficiency rather than to condemn the model.
I love this idea. Just last month I proposed this concept of business engagement with my recurring client, though they haven’t agreed with it but they can see the value of how efficient and stable the economy of it. I think for a startup company, this concept is very helpful to scale up the business. More content on this please 👍🏼
Btw, I work in design consultant
People are overconsuming information. Pefect time to pivot to a subscription business model.
This would really lock in those touch points discussed earlier with another guest. Long term value translating into long term profitability. We've all gotta step it up!
Totally agree. I just started a membership and see that people are really wanting this type of offer over a huge lump sum. (Of course, there are still clients who want the 1:1, hand-holding, more custom solution and will pay for it). I already landed a 1:1 client from the membership so I think this model can be really effective.
Genius actually. Thank You!
That was a treat🔥
this is so amazing, I already listened to the whole podcast, soooooo fu....... great, insightful and helpful-THANKS
Did i say i fuxking love your channel already? I'll say it again
That's how I got my business to survive Covid, when everyone was dropping prices, I changed my business model to a subscription and it works like a charm.