Sick of subscriptions? Heated seats in cars the latest cost to test consumers' limits
CBC
A nicely warmed leather seat in a luxury automobile is how many BMW owners imagine their driving experience on a cold winter road.
But if those drivers live in the United Kingdom or South Korea, they may have to pay monthly for the experience of heated buttocks — among other features.
The luxury car manufacturer has introduced monthly charges in those markets to activate heated seats in their vehicles, along with features such as traffic camera alerts or driving assistance.
While BMW is not bringing the practice to Canada or the United States for heated seats yet, it's sparked questions about whether the business model is changing for how consumers pay for goods that were traditionally one-time purchases.
"Businesses love subscription-based services," said Yann Cornil, an assistant professor at the UBC Sauder School of Business.
The practice helps smooth out a company's revenues over time, he said. A company can expect a steady stream of more predictable income, rather than large bursts of money whenever a purchase is made.
"It's much easier to predict future revenue. It reduces volatility in revenues," he said.
Businesses and their investors value that predictability, according to Cornil, who specializes in marketing and behavioral science.
Another potential business boon is that consumers may not want to cancel the service once they've tried it out, guaranteeing a lifetime source of monthly revenue for a company.
Cornil describes this as part of what behavioral scientists call the "endowment effect," or the idea that once you feel like you've owned something — like, say, heated seats — it's difficult to lose access even if that means you keep paying for it.
"People quickly adapt to the increased level of comfort … I suspect it will become much harder to stop this subscription, much harder to adapt to a lower level of comfort by stopping the subscription," he said.
Floating the idea of charging monthly for features that are built into other vehicles is not a new concept for BMW.
In 2019, the company faced some criticism for charging a subscription fee for the Apple CarPlay feature in vehicles. It later dropped the charge.
Tesla has also launched subscription packages in some markets for features such as self-driving or automatic parking.
