Subscription Cars: Monthly Fees are Changing the Market Worldwide and in Croatia

If you are a customer of a Volkswagen electric vehicle (EV) in the United Kingdom and wish to drive your electric metal pet with full engine power, you will need to pay a subscription. Otherwise, the complete horsepower will be locked!

Specifically, Britons will have to pay a monthly fee to unlock the full engine power within their new EVs from the ID.3 range. VW states that the ‘optional power upgrade’ will cost £16.50 per month or £165 annually, while another option is to pay £649 upfront for a lifetime subscription. This lifetime subscription applies to the car, not the individual, meaning the upgrade will remain with the car if it is sold.

– We offer a great selection to our customers – VW representatives say.

The car is presented in the configurator with 201 hp, although the configurator lists 228 hp that can be unlocked with a subscription. Subscriptions in the automotive industry are not a novelty. For instance, BMW once announced a subscription for add-ons like heated seats and steering wheels, but the public heavily criticized this move, leading the company to abandon it. However, Mercedes also introduced an online subscription service in the U.S. in 2022 that allowed customers to accelerate their own EVs.

And while the automotive industry tries to push boundaries and introduce subscriptions as a regular business model, certain industries have long raised the bar. Currently, some of the most successful business models in the world are subscription-based, such as video content streaming.

Global Leaders

Here is the business leader Netflix, which is almost synonymous with subscriptions. Their model allows users access to a vast library of movies, series, and documentaries for a monthly fee, and the company continuously invests in its own content to retain subscribers. Similar success is seen with Disney+ and HBO Max, which compete through exclusive titles and franchises that have a global audience. In the music world, Spotify and Apple Music have demonstrated how powerful a subscription model can be, offering unlimited access to music for a monthly price. Instead of purchasing individual albums or songs, users receive an entire music library, often with personalized recommendations and playlists. It is no wonder that even YouTube is now copying this model.

Amazon Prime combines fast delivery, exclusive content on Prime Video, and other benefits, tying users to the Amazon ecosystem. Similarly, global successes like HelloFresh or Blue Apron offer meal kit delivery, solving the problem of meal planning and grocery shopping. In digital services and software, the subscription model is practically the norm. Adobe Creative Cloud, Microsoft 365, and similar products are now sold exclusively through monthly or annual subscriptions, ensuring stable revenue while users continuously receive updates and new features.

Another interesting niche is wellness and fitness. Peloton has redefined home workouts by combining bikes and treadmills with subscriptions to live virtual training, while Calm and Headspace charge for access to meditation and mental health programs. In short, the most successful subscription models worldwide share several common characteristics: they constantly add value, are easy to use, often offer exclusive content or experiences, and create a sense of loyalty. The subscription economy is becoming so vast that this year, research suggests, it could exceed $1.5 trillion. The subscription economy represents a fundamental shift in how companies create and deliver value to customers. Unlike traditional one-time purchase models, subscription-based companies focus on building lasting relationships and providing ongoing value. Subscription-based companies have grown by 435 percent in the last decade, dramatically outpacing traditional business models.

Croatia Embraces Subscriptions

‘Forever transactions’ or lifetime subscriptions have proven to be very powerful, and entrepreneurs in Croatia are increasingly ‘playing’ with them.

The most well-known form of subscription in Croatia is traditional subscriptions to magazines and literary clubs, where users pay monthly or annually for printed or digital editions of books and magazines. Although this is a classic model, it still attracts a significant number of users.

Miran Pavić from Telegram stated at a recent Lider conference Marketing and Sales by Numbers that subscriptions in their case are on the rise, but he warned that users are often willing to pay for only one subscription.

– People find it difficult to commit to multiple subscriptions. The average subscriber here is around 50 years old, and students and younger audiences are almost not represented. That’s why we are considering packages that could attract them – Pavić said at the time. Telegram is already conducting personalized campaigns and using user behavior data for more precise targeting. For example, they differentiate strategies for occasional and frequent readers. Pavić believes in long-term growth of subscription revenues, but emphasizes that advertising should not be neglected either.

– Content is never free; it is either paid for by the advertiser or the reader. The future lies in a hybrid model – Pavić said.

Lider Also Has a Subscription

Of course, Lider also has a subscription, basic, business, and premium subscriptions, starting from €15 per month to €637 per year. Like many other media houses in Croatia. Digital streaming services are also very popular. For example, the VOYO platform of RTL television offers subscribers access to TV content via the internet, reflecting the global trend of shifting from linear television programming to digital channels.

Among the more specific models in Croatia is the Multisport card. It is used as a subscription to encourage employees to engage in physical activity, allowing them access to sports content and facilities. Such models combine business function and social responsibility, thereby attracting potential employees. However, the subscription segment for physical products in Croatia is still developing. Examples include regular deliveries of boxes with coffee or vegetables, such as Gruntek, which customers receive directly at their home address. These models combine the convenience of e-commerce with a sense of surprise and exclusivity, but the market has not yet reached higher levels of mass acceptance.