BMW Backs Off Heated Seats As A Subscription Service Because It Was Stupid And Unpopular
from the charge-me-extra-to-use-something-I-already-own,-please dept
We’ve noted several times now how automakers have started taking basic car functions and trying to make them subscription services in a bid to please Wall Street. Mercedes, for example, has started hiding better engine performance behind subscription paywalls. BMW last year decided it was going to make heated seats an $18 per month subscription option.
Wall Street loves this sort of nickel-and-diming because it provides a consistently new revenue stream that can be nudged ever higher by the auto manufacturer. Consumers unsurprisingly aren’t quite as enthusiastic, because it basically involves charging people extra to use technology that they already own, already exists in the car, and is usually already included in the retail price.
Unfortunately for BMW, they had to back off of the whole subscription heated seat thing because consumers hated the idea. At least according to BMW marketing boss Pieter Nota, who had this to say to AutoCar:
“What we don’t do any more – and that is a very well-known example – is offer seat heating by this way. It’s either in or out. We offer it by the factory and you either have it or you don’t have it.
“We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high. People feel that they paid double – which was actually not true, but perception is reality, I always say. So that was the reason we stopped that.”
By the “acceptance isn’t that high,” Nota means nobody wanted to be charged extra to use technology they already own. And while he claims that people weren’t paying double for heated seats (both as a subscription and included in the retail price), it’s extremely hard to believe automakers would imperil their revenues in any fashion. Once you open the door to this model, the bilking never really stops.
While BMW won’t be offering heated seats as a subscription service, they’ll absolutely still embrace subscription-based services when it comes to stuff like driver assistance features.
But for now, at least, you won’t have to pay extra to use your radio or use the highest windshield wiper setting. While it’s great to see consumer disdain make an impact, there’s no shortage of folks with more disposable income than sense; meaning similar, dumb ideas are all but guaranteed.
Filed Under: automakers, autos, double dipping, drm, heated seats, subscription service
Companies: bmw
Comments on “BMW Backs Off Heated Seats As A Subscription Service Because It Was Stupid And Unpopular”
He is telling the truth, sort of, because over the lifetime of the car they would pay an even higher multiple.
Re:
You pay double, then triple…
Unless you don’t subscribe, in which case you pay exactly once. Because you still own the heater you can’t use. Well, maybe a bit more than once, because dragging around dead weight reduces fuel-efficiency.
My 2 cents
I think most customers have a pretty good idea of which ‘services’ merit a subscription and which merit a one-time fee. If there is no recurring cost for the manufacturer for offering the service, a one-time fee feels fair. On the other hand if the service is obviously not free for the provider, a subscription will be accepted more easily.
So I think most customers would hate subscriptions for features like heated seats, enabling carplay or an opening roof: either the hardware is in or it’s not. Same goes for a tunig of the engine (even if done ‘over the air’) since it is a one-time thing. On the other hand, paying a subscription for things like road maintenance warnings, parking availability info, a streaming music service etc seems fair enough.
Of course, manufacturers will disagree because they have smelled the ‘recurring revenue’ value of subscriptions and would only be too happy to apply it to every feature of your car that they can get away with. More so because they build the cars with ever more ‘remote tweakability’ allowing enabling/disabling of said features and options.
Re:
It’s an ancient business model – give the razor away, to sell the blades. (Sell the printer below cost, but more than make it back on the price of ink, etc.)
Customers seem to tolerate ‘recurring revenue’ plays when they appear to get some object of value. Even if the recurring cost to manufacture and distribute that object is much less than what the customer pays.
BMW might have done a better job of convincing customers that they were getting value for their subscription money if it weren’t so easy and cheap to install aftermarket seat heaters. (They could try the ‘but that would void the warranty’ gambit, I suppose…)
“People feel that they paid double – which was actually not true, but perception is reality, I always say” is a statement that reeks of so much “No, it’s the kids who are at fault” energy that I felt it through my cellphone screen
Reputational Damage
This is already having a real world effect on BMW’s reputation. Was in a car dealership over the past weekend and the BMW topic was part of the conversation and how their cars didn’t push extra charges on customers.
That all said, by stopping this now they in a sense stopped several business models from moving forward, those business models for bypassing/hacking their nonsense and others in the government watchdog agencies who would have been all over BMW for safety concerns by those bypassing/hacking BMWs nonsense.
I wonder, what would Pieter think if the elevators, escalators, washrooms in his office buildings suddenly started running a subscription service?
Re:
They kind of do, with the (maintenance) subscriptions paid by the employer. The washrooms could maybe go one day without maintenance, and then they’d be closed (along with the building). Heavily used elevators and escalators, by contrast, could maybe go a few weeks or months before being put out of service.
Re: Re:
Ummm… no. Those would be more like renting a car, rather than buying one.
Re:
Pay toilets were common in the US until the 1970s when https://en.wikipedia.org/wiki/Committee_to_End_Pay_Toilets_in_America pretty much got them wiped out. (Unfortunately, that also wiped out a great many public toilets altogether; their owners closed them rather than made them free.)
More than likely
Someone would have hacked it to be functional anyway given time.
Noun
rent-seeking (uncountable)
Sort of...
There seems to be a push, especially here in Canada, to convert costly house repairs (new furnace, new air conditioner, hot water tank) into a rental service. It has plus and minus – they will repair/replace the ittem should it fail (and they do, which is why you called these guys). But then it becomes a locked-in cost. You’ve paid $150/mon for a new furnace plus regular maintenance. After 6 or 7 years, is it cost effective to pay off the balance and wait for the next failure, or better to keep paying and when it fails, get a free furnace? (“sunk cost”)
But $18/mon for heated seats? You only use them what, 4 months a year? Can you turn it off by the month? Otherwise, that’s $2/day for heated seats.
OTOH, I don’t subscribe to the upgraded connectivity for my Tesla. It might be nice on a road trip to have streaming video on the main screen while waiting at a charger, but who goes on road trips with Covid? The basics – local radio, maps, etc. – are free and for more, I have a phone which I already pay through the nose for.
Re:
I hadn’t heard about furnaces and A/Cs, but the water-heaters are a long-time scam in Ontario—not a recent “push”, and not usually relating to “repairs”. Buyers of new homes often find out, when reading the fine print after already agreeing to buy, that they’ll be locked into a contract to rent a necessary piece of equipment. That lets the builder advertise a lower price than they’d otherwise be able to (and probably gets them a kickback). It’s been that way for at least 60 years, with regulators showing no signs of caring. The builder puts in a sub-$1000 heater, and to “buy out” the forced contract tends to require a multi-thousand-dollar payment (for the first decade anyway), so people stick with it. If they sell, they’ll force the next buyer to assume the contract, though that probably won’t be disclosed till the lawyers get involved.
But, also, people just don’t do the math. I have a relative who’s been renting the tank, in an otherwise-owned house, since the 1960s. They think it’s a good deal because, if the thing breaks, it’s fixed “for free”. But it’s only happened twice, and the payments over just 2 or 3 years are enough to walk into a Home Depot and buy one outright, with installation.
Re: Re:
It’s also occasionally used by Ontario landlords to disguise their own costs as “utility costs” to be paid by renters (illegally; one cannot be required to rent a second thing as a condition of renting a home, though one can be required to pay utilities).
Re:
I believe so. The typical new BMW buyer may have actually paid less money over their ownership period than they would by buying the feature outright. But to me the issue is not that it might cost more, it’s where we will end up if we reward this behavior.
Driver assists?
Driver aids, and assists being behind a paywall. Yeah, that’s gonna work out just fine.
So, assume some first or second owner loans their car to a family member. That person sees an alert that driver aids require an updated payment – which they cannot give. So BMW disables driver assists and … rear-ender happens.
Welcome to liability BMW, and that will drive legislation that locks your option to deny the service.
Fantastic
Not mentioning that BMW’s turn signal subscription service was so unpopular that they simply removed the function a long time ago.