Larry Magid: Paying forever? Subscriptions are taking over tech

There was a time when you only bought things, and once you owned them, there were no additional fees. For years, I owned my copy of Microsoft Office and got to use it indefinitely, only upgrading when I decided I wanted a newer version. Now, for most users, it’s a subscription model. Although there are discounts for teachers and students, most individuals typically pay around $70 a year for Microsoft 365 Personal. Families can subscribe to Microsoft 365 Family for about $100 a year, which covers up to six people. If they stop paying, they can no longer use the software. Before about 2011, people paid around $200 for a perpetual license. Technically, you didn’t own the software, but you owned the right to use it indefinitely. When Microsoft issued a new version, you could decide whether to pay for the upgrade or keep using your old version.

Subscriptions

The same is true for Adobe products like Photoshop, Illustrator and Premiere Pro. Instead of paying hundreds of dollars at once, you can now subscribe to all or some of Adobe’s products for between about $23 and $60 a month, depending on what products you need.

There was a time you could buy a Quicken CD for between $60 and $80, but now you subscribe for between $3 and $8 a month, depending on the version and any discounts being offered.

The same applies to security software from the likes of Norton and McAfee. Instead of buying it, you pay an annual fee.

Streaming, storage

It’s not just software. When Apple introduced the iTunes Music Store in 2003, you could buy music for 99 cents a song or $9.99 an album. I still own and listen to some of those songs in my car, where I can store music on a USB drive and listen even if I’m in the middle of nowhere with no cellular access.

But, with the exception of occasionally buying CDs at concerts to support artists, I haven’t purchased music in years. Instead, I pay about $10 a month for a streaming service like Spotify, Apple Music, YouTube Music, or Amazon Music.

Even data storage has shifted from owning external drives, DVDs, SD cards and other physical storage systems to cloud-based services like Dropbox, iCloud, Google One and Microsoft OneDrive.

Leasing

And it’s not just software and apps. There’s a growing tendency to lease physical items. Car leasing has been around for decades, but it’s growing in popularity not just because it can sometimes be better for cash flow or tax reasons, but because the technology in cars is changing rapidly, making it attractive to be able to easily get a new one every three years or so.

Smartphones, too, can be bought outright, or you can subscribe to a plan where you pay by the month. For an extra monthly fee, you can get a new one every year or so. It’s more expensive than a one-time purchase, but you always have the latest technology.

With cars, phones and other physical items, you should weigh the benefits of leasing (including paying extra for an upgrade option) versus buying and reselling or trading in when you’re ready for an update.

Peloton and similar companies sell bikes and treadmills, but much of their value comes through subscription services for classes and content. The same is true for fitness trackers such as Fitbit that offer an annual subscription plan for advanced features.

Proprietary supplies

There are also devices that you buy outright but still have to pay to use. Some coffee makers, for example, require proprietary pods that you can only purchase from the manufacturer. Some printers and refrigerators include chips in their cartridges or filters to prevent you from using less expensive alternatives, although there are sometimes ways to get around those restrictions. Generative AI services, like ChatGPT, might even help you find compatible products or workarounds to bypass these frustrating attempts to lock you into a single brand.

Subscription pros and cons

Like a lot of things in life, the subscription model comes with benefits and drawbacks.

The obvious downside is having to keep paying on an annual or monthly basis rather than paying once and owning it forever. Depending on the pricing model, you could easily pay many times more over the course of your usage than if you bought it outright.

And even though software was sometimes updated with new features or security fixes, the basic user interface typically didn’t change much, so once you learned how to use a product, you didn’t have to relearn it because the software maker decided to change the way it works.

However, there are some substantial benefits to the subscription model. The most obvious is that your product is always up-to-date. As a Microsoft 365 subscriber, I not only get regular security updates but new features and services as they become available. But being up-to-date could mean new features and ways of doing things that require you to relearn how to use it.

In many cases, these are cloud-based products that you can use on any device just by signing in, so you don’t need to install them on each device you’re using.

Also, depending on the licensing agreement, I may be able to use the same software on different devices or share it among family members, although that was sometimes true with purchased software depending on licensing agreements. For example, I can use my Microsoft 365 account on my Windows PC, my Mac, my laptop, both my iPhone and Android phone, and my tablet.

Some cloud-based services also make it easy to collaborate with others. At my nonprofit, ConnectSafely, we use Canva – a web-based service for graphic design and video editing, and because both the software and our files are stored on Canva’s servers, it’s easy for colleagues to work on the same projects without having to transfer files.

Storage and collaboration
Many of the subscription-based products also come with storage, so you don’t have to worry about saving or backing up your files, as long as you have internet access.

And despite the tendency to charge for these services, some are free, such as the services available with a standard Google account. These include Gmail, Drive, Docs, Sheets, Slides, Meet, Chat and Calendar, along with 15 GB of free storage. You always have the option to pay for additional storage if needed. And the Google products make it very easy to collaborate. You can even have multiple people simultaneously edit the same document, spreadsheet or slide deck in real-time, but you have to be careful not to trip over each other! Even though I pay for and occasionally use Microsoft 365 products, I am much more likely to use the Google apps because of their ease of use, automatic cloud storage, and collaborative features.

Convenience, hidden costs

In the end, whether it’s software, music, fitness equipment, or even the filter in your refrigerator, the shift from ownership to subscriptions isn’t just about technology, it’s about control. Sometimes it makes life easier, sometimes it saves you time, and sometimes it costs you more. The challenge is knowing when you’re paying for convenience, when you’re paying because you have no other choice, and what you’re trading in attention and privacy for products that claim to be “free.”

Larry Magid is a tech journalist and internet safety activist. Contact him at larry@larrymagid.com.