Pay-to-unlock Features in Second-hand Models: Aarian Marshall on The Good, The Bad, and the Ugly
BMW of North America says it will always allow customers to purchase features up front with a vehicle. It also defended offering subscriptions for features such as dashcams and remote start functions to provide “flexibility.” Furors do the same thing.
Aarian Marshall is back on the show this week. We talk about the trends of pay-to-unlock features in cars and how the industry is adapting them for the second-hand market.
Aarian recommends recipes from Bon Appétit, especially if you’re hosting Passover seder. Lauren recommends the documentary about photographer Nan Goldin, All the Beauty and the Bloodshed. Mike recommends the new WIRED podcast, Have a Nice Future, which Lauren cohosts.
Aarian Marshall can be found on Twitter @AarianMarshall. Lauren Goode is @LaurenGoode. Michael Calore is @snackfight. The main hotline should be blinged out. The show is produced by a person named Boone Ashworth. Our theme music is by Solar Keys.
The BMW Heated Seat Kerfuffle: A Case Study in the Global Automotive Sector and the Case for a Solution to the “Majority Problem”
The audio player on this page is where you can always listen to this week’s podcast, but you can subscribe for free to get every episode.
Go to the app on your mobile device to open it or just tap the link. You can also download an app like Overcast or Pocket Casts, and search for Gadget Lab. If you use Android, you can find us in the Google Podcasts app just by tapping here. We’re on Spotify too. And in case you really need it, here’s the RSS feed.
But in many ways, the BMW heated-seat kerfuffle was an early skirmish in a larger campaign. Most global automotive companies have some kind of subscription, such asTesla’s Full Self-Driving, which costs up front or a fee, or Toyota’s Remote Connect, which costs between $25 and $50 a month.
Consumers who subscribe reacted with outrage. Spotify, Netflix, razors, coffee: All now come with monthly fees. But being asked to subscribe to heated seats seemed to point to something broken at the core of the money-for-stuff compact that is global capitalism. If a car company could give away access to tuchus warmers with the press of a button, what did it mean to own anything?
It’s no surprise that global carmakers are jealous of the fantastical returns of big tech firms like Microsoft and Apple: Sell software, get Googley returns, or so the theory goes. General GM has stated that it wants to make $25 billion in annual revenue from subscriptions by 2030. Its internal research suggests car buyers are willing to spend an average of $85 a month, CEO Mary Barra said last year.
The automotive industry is targeting used car owners as its latest target in the subscription push. The average lifespan of passenger vehicles has risen over the last few years and now sits at around 12 years in the US. Carmakers are making those owners into subscribers as well.
Gary Silberg, global automotive sector leader at the accounting and advisory firm KPMG, says that it is a massive market. He thinks that the auto industry are trying to get a solution to a silly situation. Silberg says that if you spend all the money building the car, you spend all the money designing it and building factories, yet you don’t get to talk to your customer. More connected vehicles and the apps that go along with them mean that automakers can. Michael Bensel is vice president of mobility and connected services at Cariad, the Volkswagen Group’s automotive software subsidiary. He writes that the company has a shift in relationship with car buyers from occasional contact at dealership to continuous direct customer contact during ownership.