Subscription Services Are the Features of the Future

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Subscription Services Are the Features of the Future

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Subscription Services Are the Features of the Future ... he-future/
The good news: Get more features, more easily. The bad: You might have to pay a fee for your remote starter down the line.

Subscription services have taken the entertainment world by storm. Services like Spotify, Netflix, and others have have effectively changed how people interact with media. This also leads to some high-profile drama like HBO Max saw earlier this year. It’s safe to assume that subscription services are going to extend to spaces beyond media (actually, it already has). When this trend is going to hit the automotive world in a significant way is the big question, and when are you going to have to pony up for an over-the-air update that unlocks your seat heaters.

In fact, automakers have already pivoted to eyeing subscription services as an avenue for continued revenue from customers. Among those leading the charge, the team at Tesla has tied its Full Self Driving program to a subscription service. Adding to that, many automakers offer connected services, with some attaching a subscription element. Most recently, The Drive picked up that Toyota has tied its latest remote start on some models to paid connected services.

“Subscription services have been working their way into vehicles for years already, through telematics services like GM’s OnStar and Hyundai’s BlueLink, or even BMW charging for Apple CarPlay access that many automakers include,” says IHS Markit analyst Stephanie Brinley. “SiriusXM has been a subscription service in vehicles for decades, and prior to being able to update map data over the air, automakers typically charged for map updates to embedded navigation systems. There is precedent for consumers paying by the month or one-time fee for vehicle features or services today.”

That’s not to say that automakers aren’t looking down the line to change how this concept works. “The arena of charging for features and content in vehicles is in the very early stages,” Brinley says. “Automakers are definitely in a trial-and-error period where they will try a variety of solutions as they figure out what consumer tolerance is and what subscriptions they are willing to pay for.”

That rings true, especially if you look at the recent remarks from Stellantis and Volkswagen. As automakers pivot towards electrification, it seems like they’re also searching for new ways to generate revenue. This coincides with the continued rethinking of automakers’ roles, epitomized with the phrase “mobility solutions.”

While it looks like more and more features are going to slide behind subscription services, let’s not forget about the changing ownership models that automakers have experimented with over the last decade. Physically subscribing to a car itself or even a car company is something that automakers have toyed with recently. Though Cadillac, BMW, and others have since ceased their programs, automakers like Hyundai and Volvo still offer ways to subscribe to a car rather than signing a traditional lease or outright buying the vehicle.

It’s clear that automakers are looking at new ways to generate revenue streams, especially as the looming EV transition could affect traditional revenue streams, like for replacement parts. Of course, we expect that there are going to be more than a few hiccups along the way.
The side effect of highly connected vehicles ... subscription based features.
Everything is moving to subscription models, so this shouldn't be unexpected.

#STLA #Stellantis #Mopar #EVs #ElectricVehicles #Subscription #Subscriptions
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