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Budgeting 101

Spotify, Netflix, Dropbox: Which Of These Popular Subscription Services Do You Really Need?

Can we get by without subscribing to “premium”?

Consumer buying habits are moving toward simpler, more straightforward retail experiences. We have gone beyond buying products on a one-off basis, and have evolved to renting, sharing, subscribing goods and services.

The subscription model is great for customers because it gives us convenience. In terms of demand, we can choose when we want the product, and terminate the subscription as we wish.

Payment wise, the price of a monthly subscription is almost always more attractive than buying a product one-off. The simplicity and affordability of the flat monthly payments saves the hassle and thoughts of having to constantly reorder.

Some companies also adopt a “freemium” model, where they provide services we can use for free, with select premium features unavailable inless we pay a premium subscription fee to get full access to the service.

While the on-demand option is great, signing up for a even few of these and the membership fees can really add substantially to your monthly expenses.

Which begs the question: To what extent do we as customers profit from these relationships, and are we really using these services to get our money’s worth?

Let’s look at 3 popular subscription services and assess whether it makes sense for you to continue paying for these services.

#1 Music Streaming

Spotify is one of the first and biggest digital music subscription services, enabling us to access millions of songs on our phones, computers and tablets. The music streaming service benefits customers who don’t wish to purchase an entire album to listen to a couple of songs, and customers who wish to listen to a variety without breaking the bank.

There are two plans available:

1. Spotify Free: Allows users to listen to playlists in shuffle mode only, with advertisements in between.

2. Spotify Premium: Ad-free, on-demand, and gives you the option of downloading your playlists and albums to listen to them offline. It comes at a premium of $9.90, but students enjoy Spotify Premium at a discounted price of $4.99. There’s also the Spotify Family option, which allows 5 users premium access to the music service at $14.98, which is by far, the most value-for-money deal Spotify has to offer.

While the ads can be intrusive to the music experience, it really is a personal preference. If you can stomach the ads, you can use Spotify Free indefinitely, and it wouldn’t affect you. If you decide to pay the premium, one way of assessing whether it makes sense to pay for it would be to consider how many of the premium perks you use, and to what extent these perks enhance your music experience. If customizing your own playlists and taking them offline are features you would use daily, and would be integral to the way you access and enjoy music, then the premium would be justified.

#2 Video On-Demand

Netflix’s launch in Singapore last year changed the way we watched movie and TV shows (legally). For a flat monthly fee, you get to stream your favourite content whenever and wherever you wish. How much you actually use Netflix also plays a part in how much value you get out of being charged a flat fee every month, so the one month free trial lets you check your usage of the service before considering getting the subscription.

Should you decide to get the service, Netflix comes at three price points: Basic ($10.98), Standard ($13.98) and Premium ($16.98). Basic lets you stream content at 720p, Standard lets you stream content at HD in up to two devices, and Premium gives you 4K quality in up to four devices.

The upside to Netflix is that it’s legal and we have on-demand access to both Netflix Original content and licensed content. In this sense, Netflix offers an affordable, higher quality alternative to torrenting and online streaming, which is unreliable and probably illegal. The on-demand quality also makes Netflix miles better than shows on TV. Gone are the days where we’d plan our schedules carefully around our favourite prime-time movies on Channel 5. We can easily get our movie fix whenever with a few clicks.

However, because of international licensing issues, Netflix Singapore doesn’t give us the full Armageddon of content that Netflix USA affords. They tend to offer more old movies and TV series than latest blockbusters, which is important to consider. They usually bring TV series onto Netflix by the season, so you’d have to wait awhile for the entire season to be out to be able to binge on your favourite shows. That being said, exclusive shows like Game of Thrones will not be available on the platform, so it also boils down to the type of content you want to watch.

#3 File Sharing & Cloud Storage

Collaborative work and storage tools have grown to become synonymous with Dropbox, Google Drive and even Amazon Cloud Storage. Like Spotify, services like Dropbox offer ‘freemium’ membership, where we get 2GB of space for free and 1TB of space if we sign up for Dropbox Pro, which sets us back by $99 a year.

There are little things you can do to get more space in your free Dropbox account, such as referring new users, following the Dropbox social media pages, or joining Dropbox challenges. There are other services that offer a little more storage space for free, such as Google Drive (15GB).

When evaluating whether your Dropbox Pro membership is worth the cost, consider how much space you are using. 1TB is quite an increase from the free 2GB. However, if you only end up using 20 GB, you’re technically paying $99 to use 20GB a year, which does not work out to be a very good deal. If it reaches a certain point where the free storage services are not enough to meet your needs, then it may be well justified to get a Pro membership.

It should be noted, however, that while only one competitor in each field was evaluated in this article, the article sought to assess the nature of the product rather than the company itself. Each market determines how attractive the premium memberships are in relation to the free ones. Subscription packages are very attractive, but whether they really make our money worthwhile depends on how they fulfill our needs and actual usage of the products.