08/04/2020 | News release | Distributed by Public on 08/04/2020 19:20
ByAarthi Rayapura •August 4, 2020
By Amy Konary, VP of Business Innovation and Chair of the Subscribed Institute
Earlier this month, I signed up for my first nautical subscription and have now spent almost every weekend cruising the waters off of Massachusetts with my husband and our sons. We've enjoyed seeing the shore from a different perspective (far from the crowds), docked at a harborside lobster-shack and enjoyed our lunch on the water, and experienced the bliss of a cool ocean breeze on a hot and humid summer day.
It has been a very memorable summer on the water so far, and one that might have never happened were it not for both the coronavirus (yes, you read that right!) and the Subscription Economy. Let me explain.
Having lived near the shore my entire life, I've always enjoyed being on the water, but I've also heard all the old sayings about owning a boat, including 'a boat is a hole in the water you throw money into.' As much as I longed to give my family the experience of boating, owning a boat would be prohibitively expensive and time-consuming. Case closed.
Until this year. With travel restrictions in place and the need for social distance, it was clear that this summer was going to be different. But childhood is short, and, while recognizing the gravity of a worldwide pandemic, I wanted my children to have some lighthearted memories of this time. I wanted them to have the experience of boating, and to create memories of being on the water. I needed to find a way to make this happen in summer 2020 - without having to buy, moor, maintain, winterize, and store a boat.
As the Chair of the Subscribed Institute, you can say that I have a subscription-first orientation. So with my mind set on cruising the seas, I immediately began to look for a Subscription Economy answer to my boating conundrum. This was when I came across the Freedom Boat Club. The subscription-based boating club has a pretty straightforward goal - 'to deliver a hassle-free recreational boating experience for its members.' Members can choose from a variety of boats at over 230 locations across the U.S., Canada, and France. The service also includes unlimited training from licensed captains, which is critical from a safety standpoint. Fueling, cleaning, maintenance, insurance, etc. are taken care of by the Club. As a member, all I have to do is sign up, select, and reserve a boat. In other words, I get to enjoy the experience of being out on a boat whenever I like without the hassles of owning it, docking it, and maintaining it throughout the year.
Interestingly, the Freedom Boat Club was acquired by Brunswick Corporation last year. A boat and engine manufacturing company, Brunswick and the marine industry in general, are faced with a declining boating population. 'The whole shared access concept - the boat club model, daily boat rentals, peer-to-peer and fractional ownership - all of those are great ways to grow boating participation,' said Cecil Cohn, President of Boating Services at Brunswick in a news article last year.
The article also cites Brunswick's research, which showed that boat clubs have a membership retention rate of around 90 percent. 'Boat clubs can attract some new boaters to ownership, but by and large, it's attracting boaters that might not have otherwise gotten out on the water.'
While there's no doubt that being on a boat is still a luxury, it's certainly true that the subscription-based model made the experience accessible and within my family's reach. Going boating was no longer merely aspirational - even if owning a boat was.
Product ownership has always created a division between the haves and the have nots in our society. But, the Subscription Economy is inherently more inclusive. By leveraging the 'as a service' model, subscription-based companies can free customers from the costs and burdens of ownership, reduce upfront and ongoing costs, and increase access to valuable services and experiences. They help to level the playing field.
For example, Chegg is making higher education more affordable and accessible. Founded in 2005, Chegg has often been called the 'Netflix for textbooks.' It disrupted the college textbook market, which was often too expensive to buy, by letting students across thousands of campuses rent from a virtual bookstore. Today, it provides over three million subscribers access to digital and physical textbook rentals, online tutoring, and other student services.
Another great example is Thermo Fisher Scientific, which makes high-end scientific instruments and data analysis software. The company primarily sells to hospitals and research centers. But a few years ago, it shifted from on-prem software to the cloud and started to sell subscriptions to its analytic platforms. This allowed doctors and researchers in the developing world to access the same big data capabilities as the big university labs in the developed world. And today, Thermo Fisher has a thriving cloud-enabled diagnostic services business that allows customers to avoid big up-front equipment investments and pay only for what they use.
All this goes to show that the subscription model can help bridge gaps and democratize access to what was once considered unattainable. And to me, therein lies the power of subscriptions - access for many instead of ownership for a few.
For more on how subscription companies can change our world for the better, check out Usership Saves the Worldby Zuora CEO Tien Tzuo and Grundfos: Pioneering Water-as-a-service Solutions for Sustainabilityby Amy Konary, Chair of the Subscribed Institute.