How do we evolve our spending?

During the evening, I came across an interesting article by NYT’s ex-CEO, Mark Thompson. The fascinating part of the article was the rise in the digital subscribers. Way back in 2012 there was merely around half a million subscribers. In the span of eight years, the numbers has jumped ten fold to over five million subscribers.

The credit for the success even goes to Netflix and Spotify. Wondering, how do Netflix and Spotify deserve the credit? I was too amused while reading the insights. The simple answer is that those companies help us change our habit. The millennial have become habituated to pay for the premium contents. The subtle change in the consumer behaviour has tremendously helped the Times and other companies.

There is subtle change in Indian consumers too, moving towards becoming a credit nation. We don’t know whether it is going to be amazing or pathetic for the economy. But we can surely observe America which turned itself to a credit nation back in 80s.

Back to the habit part, the curios thing to know is how does these companies become successful in helping us to change our behaviour. It’s probably by making us habituated. But how does it make us habituated. Let’s go back as to how one does get started.

How did you come across Netflix for the first time? Most likely through the digital ads, which flashed one month free trial. Who doesn’t like a freebies? We grab that opportunity and started watching series for a month after all it’s free. What happens in that one month? Our brain get trained and used to those series. It even start craving for it. It sounds hard to believe. But to remind you, a habit is created through repetitions. What happens after a month? The brain starts craving for the content and we end up paying for the premium content. With time we become used to pay for premium content and consider it a new normal.

Paying for the premium content is actually good as many people are getting employed. The terrible thing is that we don’t realise how we changed our habits over the course of time. Money goes where attention flows.

Amazon went a step ahead, the clever company. It charges money from the users for the prime membership. After charging us, it gives us the feeling of freebies as prime members get fast and free delivery. That’s really way smart and looks easy from hindsight. Customer happy for the freebies and the company happy with revenue. It’s a win-win, is it really?