Tap in to the Future of Subscription-based Content
How contactless payment could get you exclusive access to shows, movies, and videos from your favorite content creators in the future.
Where are we now?
About 11 months ago, I left home to study abroad in London for my spring semester. I was excited for the independence of living in a new city — even the small things like using public transport or grabbing a coffee on my way to class. I quickly noticed that all the money I had saved up, much of which I converted to pounds before I left, never did me much good. Everything was contactless payment — from getting on the underground or one of London’s iconic buses to paying for lunch or going to the grocery store. When my friends visited, they waited in long lines at the underground station to get temporary tickets as I watched those with contactless credit cards stroll through the turnstiles with ease. Keep in mind, this is before the pandemic came along and made me fear touching any unsanitized surface or item.
So when did contactless payment and the (somewhat) abandonment of cash happen? Apple Pay, Google Pay, and now most major credit card companies allow users to simply tap their phone or card to pay. No touching, no signing, no hassle. Contactless cards have been available in many countries, including the United States, for well over a decade — but they’ve taken off in places like Australia and the United Kingdom much more quickly than in the U.S. Despite being introduced in many countries in the 2000s, contactless payments did not really begin to take off until the early 2010s in most countries.
At least part of this delay in popularity can be attributed to the Kondratieff Wave (K-Wave) which predicts different economic cycles. Contactless payment was introduced soon before the financial crash of 2008, but was not widely used until years later, where experts believe we may have entered into a new K-wave of economic mobility. Most recently, a huge reason for the increase in contactless payment is the coronavirus pandemic, as concerns over hygiene and social distancing have given more incentive for consumers to tap a card or a phone rather than rely on cash.
Contactless payment is also profitable for banks, credit card companies, and payment apps like PayPal or Venmo who can charge third-party fees and charge consumers to upgrade to contactless cards. For a lot of people already reliant on credit or debit cards for most of their payments, going contactless is easy and doesn’t require a lot of effort. It seems like a no-brainer, especially several months into a global pandemic.
Credit card companies could see obvious benefits in embracing contactless payment in the U.S. But there is untapped potential for them to expand profits by infiltrating the media space and partnering with notable social media and streaming services. Streaming services, in particular, are a rapidly growing facet of the media industry, with giants such as Netflix and Hulu growing to surpass traditional cable television. Even social media websites such as YouTube have rolled out premium, subscription-based content for users. Beyond this, websites like Patreon and Substack are specifically designed with a subscription model for people to consume exclusive content from their favorite content creators. So where do credit card companies and contactless payment fit into subscription-based media?
In his book C-Scape: Conquer the Forces Changing Business Today, Larry Kramer outlines the four Cs that have the most impact on media: consumers, content, curation, and convergence. Here we will talk about consumers, who drive the changing forces of media, and convergence, where companies team up to provide something new to their consumers. The potential here for innovation is simple: credit card companies can allocate points for every contactless payment, which can then be used to redeem exclusive content on social media or streaming services. Content creators can generate more revenue without advertisements, consumers can gain special access to content they’re already paying subscriptions to see, and card companies can incentivize users to upgrade to contactless cards and use their cards to pay for subscriptions.
Where can we go?
The idea of using credit card payments to unlock exclusive perks and benefits seems simple because you have seen it before. Airline credit cards have been around since the 1980s, offering miles, free checked bags, and other perks to frequent flyers who also happen to use their credit cards a lot. Over decades, these partnerships between credit card companies and airlines have become more competitive and more profitable for both industries, generating billions of dollars in profit. Bringing similar partnerships to the media industry would increase the incentive to upgrade to contactless cards and increase subscriptions for ever-growing media companies.
Technological progress is one of the key factors that would make this trend take off in the media space. As we have already discussed, the technology of contactless cards has the potential to advance even further in a post-COVID world. The easy, fast, no-touch system makes these cards appeal to consumers and, because contactless payment has not yet taken off in the U.S. as it has in other countries, hopping on this trend now would put media companies ahead of the game. COVID has made us more dependent on technology to get through work, school, and to entertain ourselves, and undoubtedly more innovations will come from this.
Of course, economic growth will be another key trend to consider with any innovation. In an ever-changing global economy, there lies opportunity for new ideas to succeed. For the media industry, taking advantage of a possible emerging trend such as partnering with credit card companies for subscription-based content could prove to be very profitable. Of course, this will also increase profits for credit card companies issuing the contactless cards, as well. Even if we look beyond how this will benefit these major industries, individual content creators could see profits raised, as well. Influencers on some of the most popular social media sites among young adults — YouTube, TikTok, Instagram, and various others — could profit from this subscription-based content without relying on ad revenue. A subscription-based system could also allow creators to put out different types of content, such as adult content, for example, which would allow them to widen their audiences and increase profit. One company that already specializes in subscription-based adult content, OnlyFans, has allowed some sex workers to make six-figure salaries for their work.
Taking advantage of this possible new media trend will have obvious effects for the tech industry and the economy, but how will it affect the consumer? First, the U.S. will likely follow in the footsteps of other countries who have embraced contactless payment and now use it regularly. The simplicity of contactless payment will undoubtedly give this technology at least somewhat of a boost in the years to come. Next, with this model, users can easily adapt to a subscription model as many of the platforms they already frequent either require a subscription or offer premium features. About 61 percent of young adults in the U.S. use primarily streaming services to watch television, and about 90 percent of 18–24 year olds watch videos on YouTube. Also, in a subscription-based model, users can choose who they subscribe to and have authority over what kind of content they want to see. This allows the consumer to subscribe to creators with a diversity of backgrounds, interests, and skills, which would be beneficial, especially for young people, in an increasingly globalized world.
What would this future look like?
When we look at what airlines and credit card companies have been doing for decades, it really isn’t all that jarring to picture what the future could look like if the media industry embraced this new trend. For instance, say it’s ten years down the line and you’ve gotten rid of your cable provider because the cost just wasn’t worth it anymore and streaming services have every show you could ever want, anyway. When you go to the grocery store and use your CitiBank Netflix contactless card to buy food for the week, you’re earning points that you can redeem to see an exclusive movie the same day it hits theaters. Maybe you get Starbucks on your way to work every day, and your contactless payments then earn you points for a month-long Patreon or YouTube Premium subscription to the creator of your choice. Or maybe you yourself are a content creator, free to make videos about what you want and post them when you want, without worrying about deadlines from brand deals. The possibilities for this future are endless and could result in solid benefits for creators and consumers alike.
This possible trend also opens the doors for new, subscription-only media companies — such as Patreon, Substack, and OnlyFans, as referenced earlier. These companies could be a huge player in the media industry moving forward, especially if this trend were to take off. Existing media giants could also take hold of the trend, partnering with different credit card companies to offer these special perks and rewards. This is obviously an optimistic scenario of what it could look like if this trend were to take off. However, when considering this new trend, we can focus on three different ways it could impact technology, media, and the economy.
First, of course, we can entertain the scenario that this new trend does not take off and current trends will not change. Perhaps contactless cards will not become commonplace in the U.S. like they have in other countries, eliminating the need for people to upgrade their cards. Also, there’s no question that those who use social media regularly like that it is free, and offerings of exclusive content may not be enough of an incentive for people to actually make the switch and begin earning points.
Second, we can hypothesize an optimistic scenario, which is basically what I detailed at the beginning of this section. In this scenario, creators could share exclusive content with their audiences and build niche fan bases. Media and social media companies would gain revenue from subscription fees, and credit card companies would profit from card upgrades and third-party fees. Consumers would jump at the opportunity to get exclusive content from their favorite series, franchise, or creator, just by purchasing things they normally would in daily life.
Finally, we can look at a pessimistic scenario. Of course, there is the potential that this trend could fail for any reason. As we have already covered, social media is free, so why fix something that isn’t broken? If this trend took off, people may just continue moving to new, free social media platforms. Especially among Millennials (and possibly Gen Z down the line), who are already doing worse financially than generations before them, a subscription-based platform may be unrealistic for them to rely on for content.
Of course, there is a lot of opportunity on the individual level with this trend as content creators can be rightfully paid for their content without relying on advertising revenue as they do today, but it also could pose some issues. One key thing to note is that this model is not widely accessible. If this trend took off it would only really be available to consumers who could afford subscriptions to multiple different platforms at once, as well as one or more credit cards with extra fees. Most of social media today is free and allows people to consume and post freely, so a key issue with this model would be denying people who can’t afford subscriptions access to content. For this reason, this trend may not take off, especially among younger users in tighter financial binds. In this case, social media companies in particular could just continue their current model of using ad revenue to make profit.
It is no question that the world is different today than when I first traveled to London almost a year ago and saw firsthand the ease of using contactless payment. If media companies were to embrace this possible trend, it could lead to more convenience for consumers and profits for media companies, credit card companies, and content creators alike. In an increasingly technological world, the impacts of this trend could breed new innovations and change the way we consume media.