Car Option Subscriptions Won't Go Away But Will Be The Norm

Opinion / 18 Comments

Just because BMW got backlash doesn't mean more micro-transactions aren't coming.

Earlier this month, we covered the rollout of subscription services for BMW owners in Korea. Here's how it worked. If you wanted heated seats, for example, you had a few options. You could pay for your 3 Series to have heated seats once, for the lifetime of the car. You could also pay monthly, to the tune of about $18 USD a month. Since then, the internet subsequently lost its mind. Consumers were justifiably upset. BMW even issued a statement, easing concerns in America.

Problem is, we weren't upset enough. In fact, we the consumers have already lost the battle. Subscriptions will be in every modern car before long. They work well, and people pay for them. How many do you personally have running right now? Why they work is very simple. You do some mental math while staring at that new HBO series, thinking, "well, it's only $10.99 a month. That's like... five bucks a paycheck. I'm not rich, but even I can swing that." Then, you forget about it after that new HBO series ends.


The point is, automakers have figured this out. BMW knows you'll pay for those heated seats in winter. Toyota knows you'll pay for remote start. These brands have seen it work since Netflix became a thing. And it'll only become more prevalent in the coming years.

See, BMW and others have been testing the waters for a while now. Bimmer even tried it at a "premium" level, like Porsche. Porsche will let you subscribe to its brand, in essence, and you can get any P-Car you want for a monthly rate. BMW did the same thing, eventually shuttering the program. Before that, it tried to get people to pay for Apple CarPlay functionality. Twice. That was an even bigger debacle than the current one.

The worst part of all this is that at the end of it, the company does not have to forfeit an asset (a car you lease, for example) in exchange for goods and services. It's an easy revenue source for BMW, Toyota, or whoever is bold enough to try and be the next "$12,000-for-Full-Self-Driving" like Tesla even though the hardware is standard.

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People are, frankly, fine with subscriptions for things like remote start. It's viewed as an additional convenience, one that people will pay for.

So, people pay their $8 a month for remote start and forget about it. Or heated seats. It becomes another microtransaction on your credit card statement. Soon, those packages will grow because these automakers are seeing a return on their shift in business policy. All you have to do to see what we're talking about is extrapolate this business model to the entertainment industry. Suddenly, BMW, Toyota, or others look a lot like Hulu, offering tiered subscriptions to their cars, their brands, and their "lifestyles."

The money is coming in, and the brand gets to control the asset, be it something as small as heated seats or as large as the whole car. It's like renting an apartment on a smaller scale. Problem is, the code is already in the car for heated seats. So is the button. You just can't press it because you don't own it.

BMW Korea

To be clear, there is an asterisk. Let's use BMW again, just because we've been mean to it for a few hundred words. BMW's Wi-Fi hotspot needs data to run. It takes up additional space out in the digital ether. BMW has to pay for and maintain the data sent by that LTE connection or similar. BMW is a business, and it sure won't do that for free. So, you've got to pay. And that's fair.

The issue is that with the heated seats or subscribe-a-car path, you don't own an asset at the end of that. The automakers do. Your car is an asset, arguably the biggest one you have aside from your home and your health. America is an inherently car-dependent country, for better or worse. And brands asking you to subscribe to parts of your car is taking value out of an asset that you are paying for, in a country that practically mandates the use of a car.

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It's tough to tell what can be done about this, supposing you take issue with anything that's been said here. Of course, simply not paying is an option. But most people won't hold out. Parts of America are utterly frigid in the winter. Someone might need Toyota's remote start or BMW's heated seats just to have a car at a bearable temperature when they leave for work.

Regardless, this model will continue to grow, simply because the majority of consumers have shown they're OK with it, from the entertainment industry to the auto industry. Until consumers show that they are not ok with assets being taken out of their vehicles in exchange for these small fees, the trend will continue. Because it's all about creating value for the shareholders.


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