The subscription model for streaming platforms that offer everything from on-demand content, cloud storage, video games, education, cybersecurity, transportation, home delivery, rental of tools, appliances and even printers, has become one of the most profitable businesses.
And it is estimated that in Mexico consumers spend an average of 764 pesos per month, equivalent to more than 9 thousand pesos per year, in having 3.8 memberships active.
What for companies represents stable income and greater customer loyalty, for users has become a phenomenon called enshittification, which in Spanish translates as shittification, which is when platforms offer progressively worse service for their users with the aim of maximizing their income.
“Today the same user can pay for different services such as Netflix, Spotify, Amazon Prime, Meli+, Microsoft 365Google One, iCloud, ChatGPT Plus or even HP Instant Ink to print from home, which has set up an ecosystem of automatic collections that hardly existed before the pandemic,” said David Santiváñez Antúnez, CEO of GameMetron Law Firm.
The Mexican market has become a strategic objective for these companies, where Netflix exceeds 17 million subscribers, Spotify registers more than 30 million between free and paid plans, while Free market expands the reach of Meli+.
For companies, the financial attractiveness is evident. Unlike traditional sales, subscriptions allow you to project future revenue, increase customer lifetime value, and reduce uncertainty about demand.
“Companies no longer just sell a product; they build long-term relationships with consumers and generate much more predictable income streams,” the manager explained.
The relationship with streaming platforms is eroding
For Miguel Ángel Villanueva, partner at GameMetron, as these markets reach maturity, signs of wear appear, since the subscription model that promised to democratize access to digital services, today entered a stage in which they seek to increase profitability through price increases, usage restrictions and new monetization schemes.
“The platform begins by offering excellent conditions to attract customers. Then it prioritizes business partners and finally maximizes profitability, even if that means worsening the user experience,” said Villanueva when explaining cases such as that of Google OneGoogle’s cloud service that offers 3 months for just 5 pesos and then charges up to 99 pesos per month for 400 GB of storage.
Enshittification or “platform degradation,” a term coined by writer Cory Doctorow, describes the gradual deterioration that many digital services experience once they consolidate a large user base.
Consumers are already seeing concrete manifestations of this trend on streaming platforms. Netflix, which initially promised unlimited viewing, began restricting account sharing. Amazon Prime has incorporated ads into its video service and offers to remove them for an additional payment.
“Every year streaming platforms surprise us with increases in their rates and with greater reservations for functions that were previously free and that are now reserved for premium users. The user accepts small changes because they seem marginal, but when they accumulate they discover that they pay more for a service with greater restrictions,” said Radamés Camargo, Analysis manager at The CIU Consulting Firm.
Despite this decline in digital services, the business will continue to expand as AI, enterprise software, video gamesmobility and financial services adopt recurring payment schemes.
