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Sick of subscriptions? Heated seats in cars the latest cost to test consumers’ limits

A nice warm leather seat in a luxury automobile is how many BMW owners envision their driving experience on the cold winter roads.

But if those drivers live in the UK or South Korea, they may have to pay a monthly fee to experience heated hips – among other features.

The luxury carmaker has introduced monthly charges in those markets to activate heated seats in their vehicles with features such as traffic camera alerts or driving assistance.

While BMW is not yet bringing the practice to Canada or the U.S. for heated seats, it raises questions about whether the business model is changing for how consumers pay for products that are traditionally one-time purchases.

Pay once, pay yourself forever, never pay yourself

“Businesses love subscription-based services,” said Ian Cornell, an assistant professor at the UBC Sauder School of Business.

A screenshot from BMW UK's website shows tan leather automobile seats with a potential charge of £15 to activate the heated seats for a month.
BMW customers in South Korea and the United Kingdom can pay a monthly subscription to activate the heated seats already installed in their vehicles, as pictured. (BMW UK)

The practice helps smooth out a company’s revenue over time, he said. A company can expect a steady stream of more predictable income rather than a big burst of cash whenever a purchase is made.

“Predicting future revenue is much easier. It reduces revenue volatility,” he said.

Businesses and their investors value that predictability, according to Cornell, an expert in marketing and behavioral science.

Another potential business boon is that customers won’t want to cancel the service after trying it once, guaranteeing a lifetime source of monthly income for a company.

UBC’s Yann Cornil says once people subscribe to things they used to have included with the purchase, like heated seats, they’re in for a long way because ‘it’s much harder to adjust to a lower level of comfort by stopping the subscription.’ (CBC)

Cornell describes this as part of what behavioral scientists call the “endowment effect,” or the idea that once you feel like you own something — like, say, heated seats — it’s hard to lose access even if it means you keep paying for it.

“People quickly adapt to an increased level of comfort … I suspect it will be much harder to unsubscribe, much harder to adapt to a lower level of comfort by unsubscribing,” he said.

Not a new concept in the automotive industry

Floating the idea of ​​charging monthly for features built into other vehicles isn’t a new concept for BMW.

In 2019, the company Faced with some criticism To charge subscription fee for Apple CarPlay feature in vehicles. after it Charges excluded.

Tesla has also launched Subscription package Some are in the market for features like self-driving or automated parking.

BMW allows Canadian consumers to initially add new features after purchase via a software download, but said systems like heated seats are not part of the offering.

“We don’t have a subscription-based business model in Canada, but like in the US, we give customers the ability to add new software-based functionality to their cars through software uploads using the hardware they already have in their cars,” said BMW Group Canada’s Barb. Pitblado in an emailed statement to CBC News.

A screenshot of BMW's Canadian subscription site shows text on a white background with an image of a car's dashboard console.
BMW offers Canadian consumers the ability to subscribe to offers such as a concierge service or traffic data for a recurring fee. Heated seats are not for occupancy in Canada; They are still built into the car when you buy it. (BMW Canada/Facebook)

Pitblado also notes that heated seats and steering wheels are offered as standard on most Canadian models offered by the company.

Auto experts say consumers can go elsewhere

According to automotive industry writer Lauren Fix, car buyers may go elsewhere if subscriptions to features used for permanent purchases are made.

“This car has heated seats, which you have to pay extra for, and the switch is already there? It makes people unhappy, uncomfortable,” said Fix, who is editor-in-chief of Car Coach Report.

Fix says the knowledge that a feature like heated seats is physically present in a car, but doesn’t work simply because of financial choice, can be irritating for customers and drive away business.

“The idea is that you want repeat customers, and if you start nickel-and-diming customers, they’ll go somewhere else,” he said.

Will membership be like a permanent purchase?

However, marketing experts say that while the idea of ​​subscribing for physical features and items may seem new and frustrating to consumers in some contexts — it’s not going anywhere.

“It’s a fundamentally different way of thinking about devices,” says Joan McNish, associate professor at Toronto Metropolitan University’s Ted Rogers School of Management.

McNish’s research focuses on how people respond to new technologies, and he notes that consumers are in some ways already used to the idea of ​​subscribing to full functionality.

This white BMW X5 luxury SUV, as a North American model, may have heated seats. No subscription required. (Associated Press)

“My phone doesn’t work when I don’t have internet … I can still type things. However, if I don’t pay for it or it doesn’t work, the full functionality isn’t available,” said McNish.

McNish believes that the past two decades have seen consumers move away from traditional ownership and toward a rental model for many products, pointing out that leasing entire motor vehicles is not unusual in itself.

“Owning physical things means control over their use, how long we keep them and what we do with them when we’re done. This new model says you no longer own things, so you can’t make all the decisions. These things. But if you want access to them But you have to pay for them.”

While BMW isn’t currently charging a monthly fee for heated seats in Canada, the business model should become more popular, with experts like McNish expecting an early response.

“Consumers will rail against that,” he said, adding that right now people are used to receiving many products — such as heated seats — “for free” with their purchase.

“It’s going to be rather difficult to stop getting these things.”

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