Subscribed for Life: The Student Discount That Costs You Thousands

Stressed College Student (Daily Orange)

In recent years, the consumer economy has undergone a major transformation: it has shifted from ownership-based models to access-based ones. Rather than purchasing goods outright, consumers increasingly subscribe to services that offer continuous access—think Spotify instead of iTunes, or Netflix instead of DVD collections. The subscription model isn't just a change in how we pay for goods and services; it’s a deeper shift in how we value them. Asset accumulation has been deprioritized in favor of ongoing access, embedding consumers into carefully crafted ecosystems designed to retain them over the long term.

For companies, this model provides financial benefits. Instead of relying on lumpy, unpredictable one-time purchases, firms enjoy steady, recurring revenue streams: a process known as income smoothing. This stability is highly attractive to investors, who prefer businesses with consistent, forecastable earnings. Subscription models also change internal business priorities: companies shift their focus from revenue per transaction to metrics like customer lifetime value. The goal becomes less about making a big sale today and more about securing smaller, predictable payments for years to come.

This strategy mirrors a behavior on the consumer side known as consumption smoothing. Individuals tend to maintain relatively stable levels of spending over time, even as their incomes rise or fall, because drastic swings in consumption can be disruptive and stressful. Similarly, companies prefer to earn about the same amount of money year after year rather than dealing with unpredictable spikes and crashes. Just as consumers would rather not have to overspend one year and underspend the next, businesses would rather not depend on a few big purchases followed by long dry spells.

Among all demographics, college students are especially attractive targets for companies deploying subscription models. Students, at an impressionable point in their lives, are building spending and lifestyle habits that will last a lifetime. If a company can capture a college student early, it can often secure a customer for life. Services like Amazon Prime, Spotify Premium, and Apple iCloud aggressively discount their subscriptions for students, banking on the idea that these users will stay loyal long after their discount period ends.

Logo Collage (Glen Harvey)

This strategy, known as “land and expand,” works by offering heavily discounted or bundled services initially, and then gradually upselling users into higher-tier, more expensive subscriptions. College campuses, with their interesting social dynamics– shared playlists, collaborative study tools, and group streaming accounts– only amplify the entrapment of these platforms. Corporate eyes shine at the prospect of becoming part of a student’s daily life, because after that point, leaving the service behind becomes psychologically difficult, and the monthly revenue exceeds any reasonable one-time payment. 

The frontier of competition has shifted from customer acquisition to customer retention. Companies now focus on ways to keep existing customers loyal opposed to constantly attracting new customers. This is referred to as the “churn economy,” which is the industry's focus on minimizing attrition. Companies build ecosystems that make it hard to leave, whether through technical barriers like saved files and playlists that are tedious to move, or psychological barriers like fear of a lower status, convenience, or social connection. 

College students, in particular, present unique churn challenges. Their lives are marked by rapid transitions: graduation, relocation, and fluctuating income levels. Each of these moments is a point of risk where a subscription might be canceled. To counter this, companies design their services to be indispensable, integrating them into every facet of daily life so that even major life changes don’t break the bond. In many firms today, low churn rates are more valuable than high sales growth when it comes to projecting long-term profitability.

What starts as a $5-a-month student discount often turns into a much larger long-term commitment. More importantly, the subscription model subtly reshapes how students, and eventually society as a whole, interact with consumption. Ownership gives way to endless renting; asset building is delayed or replaced by ongoing expense; and financial independence becomes harder to achieve when monthly fees quietly pile up year after year.

Imagine two college students: one in the 1980s and one today. The student in the 80s might save up for months to buy physical albums, building a small but lasting music collection they could own forever. In contrast, the student today pays $5-$10 a month for access to millions of songs, but owns nothing. If they stop paying, their entire library disappears. This totals to hundreds of dollars just to maintain access to something earlier generations could purchase outright for a similar amount. This pattern extends to textbooks, software, and entertainment; students are increasingly paying recurring fees instead of building lasting assets. Instead of having valuable, durable goods, students are primed to continue a life structured around obligatory expenses.

In the end, the subscription economy is not just about easier access to services– it is a fundamental shift in how people, especially vulnerable groups like college students, organize their lives, finances, and priorities. The long-term effects are serious: a reduced ability to build wealth, a heightened dependence on continuous income streams to maintain basic access to goods and services, and an increased financial fragility in the face of unexpected hardships. As this model becomes even more entrenched, it’s critical to understand not just the short-term convenience it offers, but also the long-term financial and behavioral effects it could have on an entire generation.