Technology is going to change – and is already changing – every aspect of life as we know it. From birth to retirement, in more than just the traditional sense of the word, technology will impact every aspect of how humans live life, said Nicholas Thompson, CEO of The Atlantic, at Subscription Show 2022.
“Everything from the way we conceive children to the way we remember them after we die,” said Thompson.
These technological changes will apply to subscription businesses, too. Major trends often affect how companies do business and keep up with consumer demands. Here are some of the trends that Thompson said to watch for.
Moore’s Law states that every two years the number of transistors on microchips will double, suggesting that technological processes will become significantly faster and more efficient over time. This applies directly to computer chips but also to the subscription industry. As new technology arrives, making running subscription businesses easier than ever, it creates the conditions for even better technology to be created.
“If you ever think you’re on top of technology and you’ve kind of figured it out, you haven’t. It’s just going to keep coming,” Thompson said.
Within the last five years, huge change has occurred within the subscription industry. Not only are there more subscription offerings than ever, but the ways to manage and run subscription businesses have expanded as well.
“I believe technology makes our lives better — makes them longer, makes them healthier, makes them filled with incredible opportunities. All of us are using technology in phenomenal ways. The AI we’re using to figure out renewal pricing is incredible. We couldn’t have done it two years ago,” Thompson said.
Another technological trend that’s occurring is the capacity of all devices to become machines that have some kind of sense. For example, a discovery Amazon made during COVID when people were home was the emotional requests made to Alexa started to increase, particularly among older adults who are likely to be more lonely and the very young who are unable to use other machines.
This type of technology is becoming more available to many businesses. As customers expect even more personalized experiences, this type of technology is something many subscription businesses will need to utilize to some degree. Additionally, they’ll have to grapple with how to provide that technology without violating ethical boundaries.
During Thompson’s time at WIRED, from 2016 to 2021, he witnessed a real transformation in how humanity thinks about technology. Much of that perspective shift stemmed from the 2016 election. There’s a sense of what social media did during the election actually had the opposite effect of what people originally expected.
“When I was young, and certainly up through age 30, I thought social media and the internet would unquestionably bring people together. How could you disagree on facts when you can find it all through Google? How would you not be able to increase empathy when you can talk to anyone in the world?” questioned Thompson.
While this proved true in the earlier days of the internet, the advent of algorithms and content filters instead created bubbles in which people surrounded themselves with only what they wanted to hear. The creation of targeted advertising furthered the polarization of social media participants, leading to the chaos and intense unhappiness experienced by many during and immediately after the 2016 election.
“Regardless of whether you wanted Hillary Clinton or Donald Trump to win, you could see that they had America turned against itself,” Thompson pointed out.
The 2016 election turned out to be a cataclysmic event for the U.S. and technology. This period of time proved that technology can divide and distract. Without a doubt, many feel a constant pull from their phones and center their days around the use of them. Thompson, for example, pointed to the story of Wael Ghonim and how he led the revolution to displace the Egyptian President Hosni Mubarak.
“Technology allowed there to be rapid political transformation. But because it enabled lizard brain emotions, it actually undermined democratic uprising. I think that that is one of the things about technology that I find most concerning,” Thompson shared.
According to Freedom House, global internet freedom has declined for the twelfth consecutive year, and governments around the world are dismantling the global internet to create more controllable online spaces.
This is concerning for everyone, including subscription businesses, most of whom do business online in some fashion. Social media is one of the ways that many businesses reach existing and new customers. Targeted advertising and the use of second- and third-party data is another way they expand their potential customer base. If a governing entity heavily controls access to online participants, that may make reaching new customers more difficult for businesses.
Though it may not be top of mind for many subscription business owners, it’s a question many people are starting to ask: will robots replace us?
“We are entering an age when the artificial capacity of machines to do the things that we do is massively increasing,” Thompson said. “And a lot of people have a sense that what’s going to happen with AI and technology is that the least-paid jobs, those are going to be replaced, and the highest-paid jobs are going to last. But that’s not it at all.”
If technology existed for business owners to replace a high-paid job and the technology existed to replace a low-paid job, which job would be more likely to get replaced? Since the bottom line is king, it’s the high-paid jobs that are more likely to get the ax.
With this in mind, the line of questioning then becomes: what kind of jobs are going to be replaced, and what kind of jobs are going to be changed?
“What is it in each industry that makes a job resilient against technological transformation and what makes it susceptible?” asked Thompson.
This is a very important question for subscription businesses. Already there has been a huge increase in automation and use of technology to decrease costs and increase the efficiency of business processes. But more change is coming that will deeply affect the subscription industry and the people working in it.
Though the invention of technology seems like it would create less work, not more, it inevitably creates more work, just in different forms. The invention of the car turned out to be bad news for horses, buggy drivers and stable hands. But eventually, roads and highways, auto shops and gas stations appeared — creating different types of jobs for many.
“You create whole new economies because you develop more efficient ways of doing it. My guess is the same thing happens with AI. It creates more work, but it also creates transitions,” said Thompson.
Another aspect of tech that subscription companies should keep their eye on is the Barbell Effect. This is the concept that businesses on either extreme of a given niche will survive change while those in the middle get squeezed out.
“In a lot of industries, technology does two things simultaneously. One, it makes it way easier to start something new and, [two], it makes it way easier for incumbents to amass great power,” said Thompson.
Network effects help incumbents. Adding users makes it more attractive to the next users, as seen in many massive subscription companies like The New York Times, The Atlantic and the New York Post. It also drives start-ups costs down to nothing, making it easier and more accessible than ever for anyone getting started to do well. Thus, the medium-sized businesses in the middle are the ones who experience the greatest negative impact. These businesses must stay on top of trends, be willing to pivot, and constantly work to future-proof to avoid the squeeze.
As technology continues to shift and more progress is made, companies need to focus more than ever on lock-tight privacy policies and internal procedures.
“Privacy is the area where I think we need the most sophisticated thinking in tech. We don’t have it right now. In the old days there was privacy in the sense of home and outside of the home…It’s totally not the case anymore. When you’re home, you’re probably on your machine and your data is being sucked up into the cloud. Expectations of privacy have totally changed and have been flipped upside down, and no one has come up with a great framework,” said Thompson.
From doorbell cameras to the use of the internet on personal devices to electronic assistants like Alexa and Google, privacy in the home is becoming more limited. One of the primary issues with privacy as it is now, according to Thompson, is there is no great definition of “good” and “bad” privacy.
“There are always complicated tradeoffs, and we don’t have the right framework for how we think about it,” said Thompson.
Subscription businesses cannot and should not ignore the ever-changing landscape of privacy regulations. Though it can be confusing and difficult to maintain, it’s an issue that customers will not let slide. Technology is making this challenge simultaneously easier and harder. Further, subscription businesses need to consider how the technology they use to reach, support and provide for their customers is blurring the boundaries of personal privacy.
As Thompson came to the end of his keynote, he encouraged the audience to consider how technology will change how we remember people after they die.
“Every single one of us — based on the material we’ve created, based on our Tweets, based on whatever Google searches you haven’t cleared out from your history, based on all of your emails, based on your photos — will be able to create machines that talk like us and sound like us,” Thompson said.
It’s an interesting and complicated way to be remembered and to remember others. Subscription businesses may be just one of the many entities that end up supporting this kind of post-life persona. Afterall, they, too, collect tons of data on their customers that could contribute to the overall sense of someone who has passed.
“In some ways we have this responsibility for everything we post because we’re creating this global collective consciousness that will then train all of the machines of the future,” Thompson asserted.
Once again, subscription companies must consider 1) what kind of data they collect from their customers, 2) how they manage it internally, 3) how they share it externally and 4) how to adhere to the latest privacy regulations. Though subscription businesses may not think they will be contributors to this kind of technology, they are part of the global consciousness that’s collecting data from humans. They will undoubtedly end up participating in the sharing of that data in one way or another.
Much of what Thompson shared during his keynote may or will happen in 10 or more years, but what should subscription companies think about in the next five years?
One question that’s certainly top of mind for most subscription businesses is: are subscriptions resilient to economic downturns and increases in inflation?
It’s a serious concern, one that’s driving businesses to assess their current pricing models, what they offer and how they can future-proof the business. Social media platforms are no longer going to be honey-holes for finding and reaching customers. This will create a softness in many subscription models that, ideally, will drive them to find new ways to bring in revenue.
But it’s not all concerning news, Thompson said.
“I feel like subscriptions basically lead to good behavior. The things that are good for journalism and good for the world. At a structural level, I feel like subscription work is really good for the world. And really good for all of these trends. And what is sustaining high-quality media — like if we didn’t have efficient subscription models and we didn’t have efficient payment processing, if we didn’t have ways of retaining people — sayonara to the places that are providing the best information about all of these trends right now. They’re all now dependent on subscription models,” shared Thompson.
Though the future may seem bleak, challenging or downright confusing, there is hope for subscription businesses! These types of companies will have to pivot, change and maybe even radically overhaul their offerings. But their work is important, it’s necessary and it’s a revenue model that will allow them to thrive through much to-come change.