Subscription Services can be a form of Price Gouging

The video article shared below is a pretty good breakdown of the increasingly ubiquitous subscriptions for EVERYTHING we all have to deal with these days.

In my opinion, the problem is not with the concept of a subscription model. It is with the execution. I am not entirely sure they are separable.

I am going to suggest that when abused, this is another model of imposing price gouging when they bias Profit over Performance.

If a company makes a good product, or provides a valuable service, I actually prefer to support the developer to encourage continued improvements, or the creation of new similar products.

However, most of these companies are driven by a profit motive to cut corners and provide sub par service and then charge more than the feature or service is actually worth. In the eye of the consumer anyway. Profit for the stockholders should be a consequence of good business practices, not the driving force for those decisions.

For example, I do not NEED to monitor my clothes dryer with an app, and would prefer not to do so. Maybe an alarm notification when things are done or stuck, would be cool, but that is about it. Linking required operational device commands or settings to an app that then often has a flaky connection, and is usually unreliable… Yeah, no thank you.

I imagine some younger consumers might grow up expecting more app related features, but I also damn well know they also expect those features to work well. So we agree on that, even with the generation gaps.

There needs to be a balance.

The HP Printer example in this video article really hits the nail on the head. HP does not sell “printers” any more, they want to forcibly link the consumer to consumables. It is about marketing, not engineering.

All of this subscription stuff is easy to be opted in (automatically by default usually “for your convenience”), and hard to stop. They do not give an easy cancel button, and usually require a consumer to call, write, or otherwise jump through hoops to get away from the thing you never asked for in the first place.

One way you can tell a better company who stands by their product, is that they do not try to sucker you into a lifetime subscription, or a hidden opt in process. And they are also easy to stop. Good guys don’t try to trap you.

These practices are essentially bait and switch, which is, I think, fraudulent even if it is typed up somewhere deep in the fine print. Also, the pricing for these services are often out of bounds with the value added. E.g. $9.99/month to monitor your whatever device. No, just no.

Any pricing should be commensurate with the consumers perception of value, not the desire of the manufacturers stockholders for higher dividends. The profit motive is a fact of life. But it is also a fact that even otherwise good corporate executives tend to become corrupted by greed over time as they face innumerable pressures to produce profits. That pressures leads to increasing numbers of unfair business practices until there is a big disconnect between the needs of the corporation and the needs of a consumer. Both are human needs, but if they get out of touch with one another, it ends up gnarly.

Unless the pricing and business practices are regulated by active competition, and without that, we need regulation. If one is not sufficient, then the other is definitely needed.

We need standards for how to identify price gouging. It cannot simply be based an emotional belief that it is “too much.” The days of emotional appeals having equal footing with objective criteria should also be put into a box and put away. Cry babies have had their decade. Now it is time to grow up and make things better for real.

Whatever solution we come up with for preventing price gouging, it needs to be something that can be investigated with some objective criteria. They the penalties should impact the manufacturer or distributor, and not be simple fines and penalties they can pass through as higher costs to the consumer… Maybe rebates or refunds… e.g. If you screw people, and you will have to pay them back at least some of what you took.

So that is my rant for the day…

Here is the article:

What do you think?