BMW is Going to Nickel-and-dime You to Death, Others Likely to Follow

As automakers connect more vehicles to the internet and install app-based shops into the dashboard, we’ve become increasingly worried with in-car marketing annoyances and the prospect of companies hiding content behind paywalls. Our concerns turned out to be valid.

BMW has decided that it will charge customers an annual subscription fee if they want to utilize CarPlay in its latest models. Odd, considering most other automakers have been trying to get the platform inside their cars as standard equipment. However we’re betting that changes unless BMW gets a healthy dose of criticism.

Subscription models have, unfortunately, become growingly popular among businesses. Research conducted by management consulting firm McKinsey & Company estimated that subscription e-commerce retailers went from $57 million in sales in 2011 to $2.6 billion in 2016. But monthly delivery services are only the tip of the iceberg. Practically every industry is getting on the trend, whether it makes sense or not, making the official tally impossible to estimate. Some tech and media subscription services rake in billions all by their lonesome every year.

It’s easy to see why companies are trying to incorporate subscriptions. They’re an effective way of distancing value from a service. A couple bucks a month doesn’t sound like much but, as you add things up over a period of years, it becomes meaningful. Inputting your credit card and making things a click a way only makes things easier for the business. In fact, it’s often more work to cancel a subscription than start one and odds are good that you’ll forget it exists after a few months ⁠— allowing companies to continue charging you without your realizing it. A Waterstone Management Group survey from 2018 found that 84 of Americans vastly underestimate their monthly tech spending due to the phenomenon.

While BMW currently offers CarPlay for a one-time fee of $300, the new arrangement converts this to a 12-month plan of $80. The company does have a 240-month plan for $300, but it’s unlikely this will be promoted at dealerships. Either way, it doesn’t cost the automaker anything to add this content on the coming vehicles (all of which will be connected to the internet). It’s simply being tucked behind a paywall that’s being converted to a subscription model. Meanwhile, its rivals are (mostly) offering CarPlay as standard equipment.

Perhaps equally telling is BMW’s recent announcement that it is establishing a new partnership with U.S. Bank to provide an “enhanced digital experience and greater value for customers.” The automaker already said it was toying with the idea of a points-based reward system ⁠— potentially gamifying in-car shopping ⁠— while it develops a robust automotive marketplace. Now it’s issuing credit cards where customers can earn and redeem points toward BMW products and services. Round and round we go. Except we know where this stops; right back at the BMW store.

None of this would be so unsavory if it didn’t involve withholding content and stacking subscription fees. Sadly, we estimate that other premium manufacturers will attempt something similar (and soon). Mercedes-Benz has hinted at placing automotive options behind MBUX purchases as well. And don’t think this will be limited to high-end nameplates with customers more willing to spend money. As infotainment systems continue to evolve, this may become par for the course.

[Image: BMW]