Points and Subscriptions – The New User-Unfriendly Payment Models

I’ve never bought a cup of coffee with tokens. Nor have I ever committed to buying (or paying for) a set number of beverages every month. It seems kind of ridiculous, right? When you want a cup of coffee you just go into your Starbucks (or whatever) and pay for a single cup of coffee without any commitment. It’s simple.

Then why are the points and subscription payment models so popular with digital services?

Subscription Services

Napster and Rhapsody are probably the most well-known of the music subscription services. Rhapsody gives you unlimited music on your computer for $12.99 a month. It’s like cable TV.

But there’s also the subscription services that are more like bad cell-phone plans. eMusic gives you 30 downloads a month for $10. The downloads do not carry over each month. Audible subscription plans start at $14.95 each month, and the way they describe rollovers make me want to drill a hole in my head to let the ghosts out.

What’s so bad about those subscription plans?

For starters, they are eerily similar to mail-order music clubs. What most people hated about music clubs were the CDs that would automatically arrive at your door each month for over $20. This is called a negative option, and it’s a practice that’s so confusing and misleading that some governments have made it illegal.

With a service like eMusic, it’s not so much that you pay for downloads – you pay for an allowance of downloads that expire each month. It wouldn’t seem so bad if they just let you carry over download credits on slow months, but instead they offer “Booster Packs” that would probably be unnecessary if credits rolled over each month.

Still, eMusic works because it’s an incredible value with average track prices around 25¢. But it’s so hard to recommend simply because of the business model, especially for people who aren’t Active Music Seekers.

For instance, eMusic offers gift subscriptions starting at $30 for 30 downloads for 3 months. Recipients do not get all 90 downloads at once. Your gift recipient has to keep track of your gift for 3 months after it’s been given. Seems like kind of a hassle – specifically for people who are new to eMusic (which would be EVERYBODY who isn’t on eMusic). Most of those 90 downloads would simply expire when given to someone not already familiar with eMusic and are not AMS personalities.

Which means that active music seekers are either:

  1. Already on eMusic
  2. Don’t like eMusic

Meaning that the people who would enjoy a gift subscription don’t need one. Everyone else would let them expire because they don’t WANT download credits. They WANT a new Kanye West album.

Points

Points are becoming a new currency in the downloads market. Specifically, for consoles like the Nintendo Wii and Microsoft’s Xbox 360, points are what you use to buy new content and games.

They are nothing more than Disney Dollars.

The argument for points on the business end is that it helps companies avoid credit card processing fees. Say a game on the Wii shop is 500 points. Well, that’s 5 bucks! But you can’t JUST buy 5 bucks of Wii points – it would cut into profit margins. You can buy them in allotments of up to $50. And when you buy them through a retailer, it’s the retailer who pays that credit card processing fee.

On the Xbox 360 it’s even more confusing because their version of points is worth less than a penny. 800 points on the Wii is $8. But 800 Microsoft points is more around $10.

And in both stores you’re lucky if you purchase something that matches exactly how many points you have. To use up your 200 leftover points you’ll likely have to buy more points.

What makes even less sense in these cases is that there’s no incentive to buy higher allotments of points. The point to dollar ratio is always the same no matter how many you buy. Even eMusic gives subscribers a break.

Is it really so bad?

When you buy points and subscriptions you never buy content. You buy credit for content.

I don’t want 30 MP3 downloads. I want a new Minus The Bear album. I don’t want 2000 Microsoft Points for Xbox Live Arcade. I want TMNT: The Arcade Game.

Credits are an unnecessary middle man for consumers. Amazon realizes this, which is why their MP3 store charges you dollars. As a consumer I can make an apples-to-apples comparison on whether an album is a better value on Amazon or on iTunes. But once you start adding credits into the mix you can’t do that.

It seems like the whole point of credits is to blur the vision of how much content is actually worth. It takes your dollars and transforms it into something that is not exchangeable and is controlled by whatever company you got them from.

1 thought on “Points and Subscriptions – The New User-Unfriendly Payment Models”

  1. I didn’t realize that emusic songs didn’t roll over. When I rejoined after a drop in service for 3 years I assumed they rolled over since my initial bonus downloads were intact after so many years. <br/><br/>I think you make a good point about emusic being more for active music seekers than casual people like myself. I go on rampages for days and then take 3 month breaks in my search for new music. Sadly I’ll probably be canceling this month even though overall I’m satisfied with the service. Losing all those roll over songs is too much for me.<br/><br/>I’m also with you on the points system for the 360 and wii… it’s so obnoxious.

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