On the internet, convenience really is king
Amazon and Netflix prove we will pay for high-quality products that are delivered quickly and easily
The internet used to be where we went for free – or at least cheap – stuff. Online, you could get everything from news to divorce papers without paying a penny. The culture of free content became so ubiquitous that entire industries – most obviously, media, publishing and music – have been pushed to the financial precipice.
But with every aspect of our lives now lived online, consumers are coming round to the idea that you can’t get something (good) for nothing. Faced with a tidal wave of online dross, the “I want it now” generation is increasingly happy to pay for the promise of convenience and quality. Amazon’s Jeff Bezos revealed this week that his company now has 100 million Amazon Prime subscribers – more than the entire population of Germany. We are not just talking about people who buy stuff on Amazon: that figure is well over 300 million worldwide. Prime members – I am one – pay £79 a year for the privilege of a teeny-tiny-bit better service. (The proportion of users who signed up by accident, in the frenzy of a panicked, wee hours purchase of a World Book Day costume, was not revealed).
Amazon Prime buys me all sorts of “benefits” – most of which I have never heard of, and which serve little purpose beyond cajoling me to buy more from Amazon. But no matter, because here’s what I do understand: it makes it easier for me to buy things online and get them delivered the next day. That’s all, but it’s quite a lot. Once you have experienced a more convenient way of doing things, it becomes very difficult to go back.
Convenience is one of the least glamorous, but most irresistible, of human motivations. Hence, in the old days, the unstoppable rise of the supermarkets, which we all kept using long after it became clear that they were destroying high streets and driving farmers to suicide; and which we are only abandoning now that it has become easier to shop online.
Hence, too, most of the technological success stories of the modern age, from sat nav to contactless cards, Google to Uber – and of course Netflix, arguably now the most powerful entertainment company in the world. Shares in Netflix reached a record high this week, after company reports showed that it had attracted 7.42 million new subscribers in the first quarter of this year. That brings its global total to 125 million paying subscribers.
What Netflix offers, above all, is convenience. It pretty much invented “streamed” TV: using internet technology to allow viewers to binge on their favourite shows whenever they like. Just 11 years later, “linear” TV channels – the kind we grew up with, which expect you to tune in at the correct time – look as antiquated as the phonograph.
Silicon Valley companies – Uber being the most obvious example – are adept at building up large user bases by offering more efficient services either cheap or free. Then, once they have established a monopoly, they start charging, or charging more. Spotify won us over with the lure of free, unlimited music; then it convinced us to start paying a monthly fee to avoid the ads.
No one much minded last year’s Netflix price hike, because it still provides amazing value for money. A standard Netflix subscription costs £95.88 a year. But that’s still less than the BBC’S licence fee of £150.50 – for better programmes and a simpler interface. It also keeps a sharp eye on the basics: in 2015 the company struck a deal with the major TV manufacturers in Europe to add a Netflix button to all their remote controls, which means even my elderly, tech-sceptic mother can turn it on. And, unlike my Virgin TV service, it hardly ever goes down.
The global hegemony of these Silicon Valley companies – uncomfortable though it increasingly feels – depends on understanding human nature. Technologies that conquer the world aren’t just innovative or entertaining or even cheap: above all, they are easy.