Evaldas Stankevičius, an economist at Kaunas University of Technology (KTU), states that the answer should be sought not in the price, but in the very logic of how subscriptions operate.
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Inaction that costs
E. Stankevičius explains that the subscription model has existed for a long time, but in the digital economy it has taken on a completely different scale. Subscriptions have spread to almost all areas of consumption and have been linked to automatic digital payments.
A major influence on this was also the fact that in the digital environment it is much easier to reduce the psychological payment barrier. It is easier for the consumer to agree to pay 9.99 euros per month than to pay 120 euros at once. The 14.99 euro amount shown in the registration window seems much smaller than the 179.88 euro annual commitment, although essentially it is the same payment, just divided into monthly installments.
“We make the decision to pay once, but the money is deducted from the account every month. In the case of a one-time purchase, the consumer considers each time whether the product is worth its price, but in the case of a subscription, they have to remember to cancel it. The decision architecture itself has changed: previously, inaction meant that a person did not buy anything, but now it increasingly means that they continue to pay unnoticed,” says the Associate Professor at KTU’s Faculty of Economics and Business.
According to him, digital payments have reduced transaction costs and increased convenience, but at the same time made expenses less noticeable. The European Central Bank’s “SPACE” study shows that the share of everyday online payments in the euro area by number of transactions increased from 17% in 2022 to 21% in 2024, and by value from 28% to 36%. These data are not directly related to subscriptions, but they reflect an environment where periodic payments can almost imperceptibly deduct funds from consumers’ accounts.
What do subscriptions really sell?
According to the KTU economist, digital business does not mean zero costs. Netflix’s cost of revenue in 2025 was 55% of revenue, and content amortization alone amounted to 16.422 billion US dollars. Economies of scale arise not because movies cost nothing, but because the costs of creating and distributing them are spread over a very large audience.
“At the same time, different subscription plans allow reaching different consumer segments: a cheaper plan with ads helps retain price-sensitive customers, while more expensive plans increase revenue by offering better video quality, the ability to watch content on multiple devices simultaneously, and additional accounts,” he notes.
Spotify’s business model is based not only on access to the music catalog but also on retaining users on the platform. The free version lowers the trial barrier, and over time, accumulated playlists, listening history, and personalized recommendations increase the cost of switching to another platform. Therefore, it becomes more convenient for the user to stay on the current platform than to start over.
ChatGPT marks another stage in the development of subscriptions – the user pays not for a finished product but for a continuously improved artificial intelligence model. “Artificial intelligence has already become a daily tool. Canceling the subscription causes the user to lose some of its most advanced capabilities,” says E. Stankevičius.
A gym subscription reveals the specifics of the physical services business. The club sells the opportunity to exercise, even though it knows that not all members will attend at the same time or equally often. A 29 euro monthly membership seems small, but over twelve months it costs 348 euros. Even people who stop attending often continue the membership for some time, hoping to start exercising from the next Monday. In this respect, a gym membership is a subscription not only to a sports service but also to a person’s intention to change their habits.
The blind spot of subscriptions
The KTU economist notes that six services at 9.99 euros per month cost the consumer 719.28 euros per year. The impact of the subscription economy begins precisely here: the price does not decrease, it is only divided into smaller, less frequently re-evaluated parts.
“A person is good at multiplying by twelve, but in everyday life rarely sits down to calculate how much they spend on subscriptions in total per year. Behavioral economics uses the concept of payment pain, describing the psychological discomfort of parting with money. When paying in cash, this moment is clearly visible and tangible, but in the case of automatic payment, the money is deducted without any additional user action,” he shares.
Canceling a subscription also increases transaction costs. The user needs to remember login details, find the necessary settings, understand the contract terms, and sometimes reject several offers to stay. The European Commission’s “DIGIFAIR” study (2024) showed that about 40% of consumers said that the design of the website or app greatly complicated the subscription cancellation process. Another 29% of respondents indicated that they often encountered cases where a free trial period automatically turned into a paid subscription, although they did not clearly understand this in advance.
The tendency of people to underestimate their subscription expenses was shown by a 2022 “C+R Research” survey conducted in the USA.
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“A thousand respondents were asked to estimate within 10 seconds how much they spend on subscriptions per month. Initially, they indicated an average of 86 US dollars, but later, when asked to list separate categories of subscribed services, they estimated their expenses at 2.5 times higher. Moreover, 74% of respondents said that periodic payments are easy to forget, and 42% had stopped using at least one service they were still paying for,” he says.
The 2024 survey by the Bank of Lithuania provides a useful comparison basis: 67% of surveyed households managed to save over the year, and 39% of savers usually set aside from 31 to 150 euros per month. This helps to understand that even relatively small periodic expenses can constitute a significant part of the household budget, especially if several subscriptions are paid for at the same time. When income decreases, automatic payments do not stop by themselves – they need to be actively reviewed and canceled.
Would you order it again today?
The KTU economist shares that the value of a subscription can be quickly assessed using the “3K” principle: price, times, and the question – would I order this service again today?
“First, it is worth converting the monthly price into an annual one, then assessing how often the service is actually used, and finally asking yourself whether you would choose it again today at the same price. This question helps to distinguish real need from habit, inertia, and automatic payments,” he notes.
The cost per use is especially clearly seen in the case of a gym. If the membership costs 27 euros and a person visits nine times a month, one workout costs 3 euros. If they visit only once, its cost rises to 27 euros. This indicator is worth comparing with the price of a one-time visit and the actual benefit received.
“This principle does not apply to all services. For example, cloud storage, cybersecurity software, or virtual medical services can be valuable even when used rarely. In such cases, it is more important to assess not the frequency of use but what risk, potential losses, or time costs this service helps to reduce,” emphasizes E. Stankevičius.
According to him, five minutes is enough for the first subscription review. First, it is worth reviewing at least the last three months of bank account and payment card statements, as well as subscription lists from Apple, Google Play, PayPal, and other payment systems. It is also useful to review all twelve months’ statements once a year, as a shorter period will not show annual subscriptions or other less frequent periodic payments. Then all found subscriptions should be divided into three groups:
Regularly used services that the user would order again today.
Rarely used services for which it is worth choosing a cheaper plan, temporarily suspending the subscription, or, if allowed by the service provider’s rules, using a family plan.
Unused services that the user would no longer order today. A thirty-day period of non-use can be a useful warning sign.
It is important to cancel an unnecessary subscription in the service provider’s system, not just block the payment in the bank app. Revolut clearly states that blocking a payment does not terminate the contract or subscription. Subscriptions purchased through Apple and Google Play systems can be viewed and canceled in account settings. It is also worth saving the subscription cancellation confirmation, as it may be useful if the payment is still deducted and you need to contact the service provider.
“The best subscription is not necessarily the cheapest or the most frequently used. It is worth its price when the value it provides clearly exceeds the costs and the user, knowing the full annual price, would choose it again today. One simple question helps find the final answer: if we no longer had this subscription, what would we miss more – the benefits it provides or the money we pay for it every month?” reflects the KTU economist.
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