• Skip to primary navigation
  • Skip to main content

Financial Freedom Blog For Indians | RupeeTip

Rupeetip shows you how to earn more money, grow your wealth, and achieve financial freedom. Practical insights inside.

  • Home
  • About
  • Need Help?
The Subscription Apocalypse is Here

The Subscription Apocalypse is Here

By Adarsh Thampy. Last updated on April 2, 2021

17.

I counted. 

Ignoring essentials like internet, electricity, rent, insurance, and mobile phone plan, I pay for 21 products/services regularly.

Rs 1,12,416.

That’s how much I spend across these 17 subscription products. Breakdown below:

Product / ServiceFrequencyTotal Annual Charge
NetflixMonthly9,600
Tata SkyYearly3,600
HotstarYearly999
Amazon PrimeYearly999
Paytm First – Level 2Yearly1,499
The KenYearly2,900
ET PrimeYearly2,499
HostingYearly2,000
NameCheap – DomainsYearly1,200
Youtube PremiumMonthly2,160
Swiggy SuperYearly3,948
Big Basket BB StarYearly1,198
Urban Clap WellnessYearly699
The HinduYearly499
Google EmailMonthly1,416
Amex Platinum CardYearly70,800
Close Dental Platinum MembershipYearly6,400

Given the propensity for most businesses to move to a subscription basis, I expect the number of subscriptions and money spent to keep increasing.

Why Are Companies Switching to Subscription Model?

For a business, recurring subscriptions help maintain a healthy cash flow.

Since a subscription model spreads the cost over a longer period, products and services become more affordable. Thereby, more people can become paid subscribers.

Take the example of Zoomcar’s Zap Subscribe.

If you were to subscribe to a Zoomcar, the total cost of ownership over three years would be 111% more than if you were to own the car!

Glanza Cost of Ownership – Bought Car

YearServiceInsuranceEMIOpportunity Cost
Year 11,50040,0001,91,2209,100
Year 24,00025,0001,91,2209,737
Year 34,00025,0001,91,2209,782
Total9,50090,0005,73,66028,619

Assumptions: 

  • On-Road Cost – Rs 8.8 Lakhs; Downpayment – Rs 1.3 Lakhs; Loan Rs 7.5 Lakhs
  • Investment return for downpayment @ 7%
  • Loan interest rate @ 10%

Cost of Ownership Comparison

Assuming you can sell the car at a 50% value, here’s the cost comparison for three years.

YearZoomcar SubscriptionOwn Car
Year 12,75,9883,71,820
Year 22,75,9882,29,957
Year 32,75,9882,30,002
Sale Price04,40,000
Net Cost8,27,9643,91,779

For Zoomcar, it’s profitable to lease you a car. However, as an end consumer, it’s a loss for you compared to owning a car.

That doesn’t mean subscriptions are bad for you.

Depending on how long you subscribe to, certain products can be beneficial for you. E.g., if you are temporarily moving to a city for six months, you can rent furniture from Furlenco, a car from Zoomcar, etc. without having to spend a lot of money.

How to Better Manage Your Subscriptions?

#1: Track your subscription spends

The easiest way to manage your subscription is to keep track of them manually in an excel sheet.

#2: Review your subscriptions every three months

Chances are, there are some subscriptions you might not frequently be using. You might even have overlapping subscriptions – For e.g. Amazon Prime Music and Gaana.

Cut them out.

#3: Switch to annual plans

Most subscription businesses offer annual plans. Often, paying every month will be costlier than paying annually. If you are sure you’ll use the service frequently, evaluate paying for yearly subscriptions.

Over To You:

How many subscriptions do you have? Is there any other strategy you have found to manage your subscriptions better? Share with us in the comments below.

About Adarsh Thampy

Husband, practical investor, and product manager. Learned about investing the hard way by making several financial mistakes. Adarsh has built several financial products for both India and US investors.

You might like to read:

Why invest your money?
Why Invest Your Money?
Rent pay via housing.com review
Housing.com Rent Pay Review
Which are the best investment plan in India
The Best Investment Plan – Which One Do You Choose?

Reader Interactions

Comments

  1. Vikram K says

    April 1, 2021 at 11:32 am

    Either you are lying or you are not as smart as you claim. Times Prime has always included Gaana+ in it, so nobody really pays for both.

    Similarly one year Amazon Prime has been rolled into PostPaid plans, and it can be extended indefinitely by simply switching the operator through MNP.

    Reply
    • Adarsh Thampy says

      April 2, 2021 at 12:37 pm

      Hi Vikram,

      Thank you for your response.

      I never claimed to be smart 🙂

      But that aside, let’s look at your observations. Times Prime includes Gaana. Yes, it does. I no longer use Times Prime. However, when I used it, it did not show this feature. Maybe this addition is new – or maybe I did not qualify for this offer at that time.

      Now, Amazon Prime being rolled into PostPaid plans. I don’t use Postpaid. The majority of India uses pre-paid (85% in Metros and can go as high as 98% in some circles). So that point is moot. And it’s not easy to do MNP indefinitely. Not everyone will have the same connectivity option with the 3 major providers. This is a bit of an unrealistic scenario.

      Reply

Participate in the discussion Cancel reply

Your email address will not be published. Required fields are marked *

Copyright © 2023 · RupeeTip | Privacy Policy