Revuto's Vedran Vukman: “People Lose More Than $1bn In Unwanted Subscriptions Every Year”

Asia's Tech News Daily

After analyzing the spending habits of millions of online customers around the world, Revuto’s CEO Vedran Vukman arrives at a staggering conclusion: People are losing $1 billion on unwanted subscription charges every year, due to the myriad of gray-area charges including additional fees after free trials, auto-renewal services, and subscription fees that increase gradually.

subscription fees, bank account, Netflix Inc, Amazon Inc, social networks

Image source: Vedran Vukman – Valuewalk

Q3 2021 hedge fund letters, conferences and more

Besides the economic impact of unwanted subscriptions on the pockets of millions of users, there is the frustration and the tiring efforts they make to break free of obligations they acquired due to deceptive practices.

Vukman’s company, Revuto, helps customers get rid of unwanted subscriptions and gives them control on those they indeed want. Vukman explains that deceptive free trials effectively mislead people into a trap by pushing them to subconsciously subscribe to a product or service they just wanted to try.

Most of those misleading free trials can be found in today’s smartphone apps since once users download them, they can often use very limited options. We spoke to Vukman about this issue more in detail, to carve out how the subscription business is performing and how impactful unwanted subscriptions are.

What can be defined as a “deceptive free trial” and what are some examples?

To use a fully functional app, customers very often have to sign up and subscribe, and “thankfully” it will be “free” for the first week of use. To subscribe, they enter their card details and the subscription will start once the free trial period is over.

Soon, a lower balance on their bank account will show them they forgot to cancel the subscription. Sometimes they are charged for a week of use, sometimes for a month, but more and more often people are being charged for the whole year at once.

“Free-trial victims” are contacting support, dealing with the problem, trying to unsubscribe and get their money back, but usually, it is too late once the charge has been made. And doing that to one user may not be such a big problem, but doing that to thousands of people every day around the world became the number one problem for the subscription economy.

What is the personal finance impact of unwanted subscriptions according to data?

The data is very telling of the big impact unwanted subscriptions have. In Europe, for example, people spend 130 euros per month on their video, music, and sports subscriptions, which is roughly 5% of all their spending. However, every fifth user never reviews their subscriptions and as a result, half of them are currently paying for subscriptions they either don’t use or for which they get very little in return.

In the U.S., in 2019, people spent $640 on digital subscriptions like streaming video and music services, cloud storage, dating apps, and online productivity tools, according to an analysis by Mint.

In Europe, the problem is such that the European Commission issued a document addressing the “free trial trap” –one of the key business mechanisms that “locks” consumers in for a service they haven’t explicitly agreed to pay, but in which the auto-renewal policy kicked in.

This model was one only used for business SaaS tools but is now an integral part of gaming, dating, betting, and entertainment apps globally, which due to their growing popularity is one of the fastest-growing cashback reasons.

How did the pandemic affect free-trial seasonality and how much have hard-to-cancel subscriptions increased?

By July last year, Netflix Inc (NASDAQ:NFLX) had reached 190 million subscribers around the world after an increase of over 10 million during the pandemic. This happened right after the overall subscription businesses had grown revenue about five times faster than S&P 500 companies –18.2% vs. 3.6%– between 2012-2019.

If we follow the sequence of events, once the pandemic started, a big part of the world ended up in lockdown. Household spending decreased due to the temporary closure of bars, malls, and restaurants, so consumers turned to streaming services like Netflix, Disney Plus –Walt Disney Co (NYSE:DIS)– or Amazon Prime –Amazon Inc (NASDAQ:AMZN)– music streaming apps like Spotify Technology SA (NYSE:SPOT), and gaming platforms like PS Plus and more.

During the Covid era, usage of smartphone apps hit an all-time high reaching 200 billion hours a month. A big part of that includes subscription-based apps so we would say that hard-to-cancel subscriptions found their golden goose, especially when we’re talking about kids who just click the “next” button without reading the conditions while spending their parent’s money –predominantly on games and streaming services.

If we look at statistics, nearly 90% of consumers accept legal terms and conditions without reading them, and within the 18-34 years age group, the rate is even higher at 97%.

In summary, apart from just consumer benefits and a simplified experience, the main guarantee that subscriptions are here to stay is the fact that they reward business owners with significantly higher valuations.

Regardless if you are a big or a small business owner, the P/E ratios of public companies reveal that a major part of the 15 most valuable tech, media, and telecom companies are subscription businesses, while startups reach 10 to 20 times higher valuation if they have a subscription instead of relying on transactional revenue.

What online businesses are currently furthering free trials the most?

To be honest, I can’t remember any company that doesn’t have a free trial period in their subscription model. Even though a lot of people are paying subscriptions to Netflix, Spotify, different clouds, and for the premium features on social networks, I must say smartphone apps are the ones that are furthering free trials the most.

As subscriptions are growing 100% YoY, younger demographic groups simply don’t have the discretionary spending power of the previous generations. So, a small, recurring monthly payment works equally well regardless of whether the product is a cloud-based entertainment content provider such as Netflix or Spotify, or perhaps an insurer like Lemonade, or a car subscription service like Cluno.

The unwanted subscriptions are the negative consequences of this business model and trend, and this is what is costing people so much money.

How often do big companies that offer online free trials deceive customers?

Well, the main problem is that once you are subscribed, the company won’t send you the reminder that you will soon be charged for the next month of use, because by doing that, the opportunity for you to cancel would automatically increase.

By sending only the invoice, people know that, since they have already paid, they can use the app for a month longer, and after that, they will unsubscribe. But of course, they forget to do it on time because the process of unsubscribing isn’t always so simple.

To unsubscribe, you have to log in to the app first, and sometimes I cannot even remember my own password. After dealing with the problem, I have to confirm via mail that I’m unsubscribing. Some apps even have additional fees, penalties, or unwanted actions for unsubscribing – Audible will take all of your paid and unclaimed credits so you have to contact customer support to deal with the problem.

This is evident when you see that 48% of people forget to cancel a free trial before being charged by an auto-renewal.

Why offer cryptocurrency payments through REVU and how does Revuto plan to develop this front?

We strongly believe that crypto will dominate when it comes to online payments in the future. Crypto payments are usually cheap, fast, and very efficient. Still, the biggest advantage of crypto lies in the fact that the token supply is usually limited –by growing a user base, and by using incentives for people to hold their tokens, the price will eventually rise and result in more buying power.

Knowing that, we’re introducing crypto to our users to allow them to pay for their subscriptions less than they would pay with their FIAT money. It’s as simple as that.

Also, Revuto will allow its users to leverage REVU with subscription payments. So, people will actually pay less and save their money when it comes to subscriptions, and with the Revuto app and by staking REVU tokens in the liquidity pools, users will be able to provide liquidity to their peers on the subscription due dates and make their money work for them.

In other words, if you don’t have enough money to watch the finale of your favorite TV series on Netflix, you can easily borrow money from the pool and pay it back later.

Further, since Revuto is issuing virtual debit cards for each subscription, once customers click the “Block” button we won’t top up their specific virtual debit card with money –so the subscription will not be charged, but they also won’t be unsubscribed. The micro-lending feature will provide much-needed liquidity, allowing users to better manage their cash flows and never miss a subscription payment.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Why Digital Marketing Is Just Like Dating

You may think I’m crazy but one of the basics I teach about digital marketing is that it’s just like dating. Actually, marketing in general is like dating, isn’t it? ... Read more »

Cyberpunk maker CD Projekt misses profit expectations

A bird flies in front of the Cd Projekt logo at its headquarters in Warsaw (Reuters) –CD Projekt, the Polish video game maker behind “Cyberpunk 2077“, missed expectations on Monday ... Read more »

U.S. lawmakers ask FAA to detail Boeing 737 MAX oversight

FILE PHOTO: FILE PHOTO: FILE PHOTO: A Boeing 737 MAX airplane lands after a test flight at Boeing Field in Seattle (Reuters) – Three U.S. House Democrats on Monday asked ... Read more »

Exclusive-Ukraine's Naftogaz says Russia-EU gas transit deal may not be renewed

FILE PHOTO: The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia By Susanna Twidale LONDON ... Read more »

‘I'm really sad': Jack Dorsey publishes final email as Twitter CEO

(Getty Images) Twitter CEO Jack Dorsey has published a final email as leader of the company before stepping down, saying that he feels “really sad…yet really happy” about the decision. ... Read more »

Medicare open enrollment ends Dec. 7. Here's why you should review your 2022 coverage if you haven't already

Phynart Studio | E+ | Getty Images You've got about a week left to make sure your 2022 Medicare coverage suits you. The program's fall open enrollment period, which opened ... Read more »

Asda charters cargo ship with festive items amid supply chain crisis

Photograph: Christopher Thomond/The Guardian Ship carrying 350 containers with toys, clothing and decorations is supermarket’s first ever private charter Asda has revealed it chartered its own cargo ship to ensure ... Read more »

Chinese could hack data for future quantum decryption, report warns

‘Threat groups’ could target valuable secrets with aim of unlocking them when computing power allows Chinese hackers could target heavily encrypted datasets such as weapon designs or details of undercover ... Read more »

Eni ready to spend more on nuclear fusion in green drive

FILE PHOTO: Eni‘s logo is seen in front of its headquarters in San Donato Milanese By Stephen Jewkes MILAN (Reuters) – Italian energy company Eni is ready to invest more ... Read more »

The economy is getting back to normal? We don't even know what that looks like any more

Photograph: Luis Ascui/AAP Wednesday’s GDP figures will likely be the second worst ever recorded in Australia, but more than anything they will highlight an economy still massively affected by the ... Read more »

The infrastructure bill cracks down on crypto tax reporting. What investors need to know

Chinnapong | iStock Editorial | Getty Images Cryptocurrency investors may face higher taxes as the infrastructure bill cracks down on future IRS reporting, financial experts say. The $1.2 trillion deal calls for ... Read more »

Keys to leading teams with a hybrid work model

Depositphotos.com Currently, flexibility has become a priority for workers, many do not want to return to the 100% face-to-face way of working, because according to a survey we conducted in ... Read more »

France extends stricter controls on foreign ownership of key firms

FILE PHOTO: French Finance Minister Le Maire and WTO Director-General Okonjo-Iweala meet in Geneva PARIS (Reuters) – France will extend by one year stricter measures on foreign ownership of companies ... Read more »

Why Making Progress Is the Most Powerful Motivator

Long before Festivus and “yada yada” became baked into our cultural lexicon, Jerry Seinfeld was just another comedian, touring the country in hopes of making people laugh. It was during ... Read more »

‘Really good news for pension savers' as new rules come into force

Pension saving will be undertaken by many people planning for retirement, but there could be risks involved. One of these is protecting hard-earned cash from the clutches of scammers, and ... Read more »

What are 'mental triggers' and how to use them to persuade

Have you ever felt that a website traps you from beginning to end, and is actually an advertisement in which, from time to time, you get rushed with that of ... Read more »

Twitter CEO Jack Dorsey steps down, CTO Parag Agrawal tapped to replace him

Twitter’s (TWTR) Jack Dorsey is stepping down as CEO, the company announced Monday. He will be replaced by CTO Parag Agrawal. “I've decided to leave Twitter because I believe the ... Read more »

Matthew McConaughey: Alright, Alright, Alright, I'm Not Running for Texas Governor

Last night, Matthew McConaughey took to social media and delivered what amounted to the most dramatically drawn out non-announcement in modern political history.  In a three-plus-minute address, the Oscar-winning actor ... Read more »

What Apple, Amazon and Kim Kardashian Can Teach You About Innovating Every Day

In the not-too-distant past, innovation was viewed as a glamorous activity primarily left either to disruptive startups and entrepreneurs or to specific departments which were cordoned off from the others within ... Read more »

Europe's energy crisis pushes Gazprom to record profits

Gazprom The Russian state energy empire Gazprom has made record profits on the back of Europe's energy supply crunch, and predicted a lucrative winter as the Continent braces for a ... Read more »

Britain open to law to combat online scams - minister

LONDON (Reuters) – Britain is open to legislating to combat scam adverts online amid a surge in fraud attacks, financial services minister John Glen has told lawmakers. Victims' groups and ... Read more »

Norwegian analyst expects high electricity prices all winter long

People must prepare for the fact that the high electricity prices will last all winter, power analyst Tor Lilleholt says. New price records could be set already this week.  “The ... Read more »

The difference between convincing and inspiring

Depositphotos.com Language is a powerful tool in the construction of human relationships of all kinds, which differentiates us from other species; However, it is our capacity for interpretation that injects ... Read more »

Twitter CEO Jack Dorsey Expected to Step Down, Sources Say

Twitter CEO Jack Dorsey is expected to leave his executive role, sources tell CNBC.  Dorsey is currently the CEO of both Twitter and Square, his digital-payments company.  Twitter stakeholder Elliott ... Read more »

Russia's Gazprom expects 2022 gas prices in Europe no lower than 2021

FILE PHOTO: St. Petersburg International Economic Forum MOSCOW (Reuters) – Russian state gas company Gazprom forecasts that gas prices in Europe next year will be no lower than in 2021, ... Read more »

Jack Dorsey: Who is the Twitter CEO and why might he be resigning?

(AFP via Getty Images) Jack Dorsey became CEO of the social networking site Twitter – initially written “Twittr” – in March 2006. Reports say that the billionaire is set to ... Read more »

Elon Musk Urges Tesla Employees to Stop Rushing Deliveries

Though customers may be well into their holiday season spending habits, Tesla CEO Elon Musk has asked employees to pump the brakes on rushing Q4 orders in order to hit ... Read more »

Jefferies poaches Deutsche Bank bankers to bolster Iberia coverage, source says

FILE PHOTO: The logo of Germany’s Deutsche Bank By Pamela Barbaglia LONDON (Reuters) – U.S. investment bank Jefferies has snapped up Deutsche Bank's M&A head in Iberia, Andres Gutierrez, as ... Read more »

Why the 10-80-10 Rule Is Key To Achieving Success

The 10-80-10 rule is an extension of the Pareto principle that says 80% of productivity/wealth is generated/owned by 20% of the population.[1] This ratio is often observable in various statistics ... Read more »

Exclusive - Greece to borrow 10 to 12 billion euros on bond markets in 2022

FILE PHOTO: A 50 Euro banknote is seen in a picture illustration. By Lefteris Papadimas ATHENS (Reuters) – Greece plans to borrow 10 billion euros ($11.3 billion) to 12 billion ... Read more »

Twitter chief executive Jack Dorsey set to step down, report says

Photograph: Anushree Fadnavis/Reuters Dorsey co-founded site in 2006 and posted world’s first tweet Company not immediately available for comment Twitter co-founder Jack Dorsey is expected to step down from his ... Read more »

Russia fines Google 3 million roubles for not deleting banned content

FILE PHOTO: The logo for Google LLC is seen at their offices in Manhattan, New York City MOSCOW (Reuters) – A Moscow court fined Alphabet Inc.'s Google 3 million roubles ... Read more »

Jack Dorsey: Twitter CEO to resign, reports say

(Independent) Jack Dorsey, Twitter’s chief executive, is to resign, according to a shock new report from CNBC. Twitter’s shares jumped 11 per cent after the unconfirmed reports. CNBC said that ... Read more »

Cyber Monday and Black Friday sales drive shoppers to malls as UK high street suffers

Before the pandemic, footfall in central London rose on Black Friday by 23.7%, compared to the previous week. This year it rose just 2.3%. Photo: Daniel Leal/AFP via Getty The ... Read more »

Japanese knotweed shaves £11.8billion off property values

© Provided by This Is Money MailOnline logo Japanese knotweed is responsible for shaving £11.8billion off the value of Britain’s property market, new research by a removal specialist claims. As ... Read more »

The 50 Richest People in Crypto

Rather than the Musks, Zuckerbergs and Gates Ellisons of the world,  The Crypto Rich List compiled by tradersofcrypto.com, comprises a wide array of players within the cryptocurrency ecosystem. Developers, investors, and founders of trading ... Read more »

Markets on alert over new Covid variant but oil and shares rally

(Evening Standard) OIL prices and stock markets recovered somewhat today after a heavy plunge on Friday, but the mood remains anxious as investors seek more information about the Omicron Covid-19 ... Read more »

Russia's Gazprom reports record earnings amid global gas crisis

Photograph: Peter Kovalev/Tass Company expects higher profits for final months of 2021 as customers in Europe face soaring energy costs Russia’s state gas company has reported record earnings for the ... Read more »

Starmer sparks row with deputy over frontbench reshuffle

Keir Starmer has sparked a row in the Labour party by launching a shadow cabinet reshuffle as his deputy was giving a major speech attacking “corruption” by the government. © ... Read more »

5 Strategies to Beat Imposter Syndrome: How I Built My Confidence With Practical Tactics

I remember it like it was yesterday. The crowds were gathered. The spotlight was lit. And my knees kept time with my nerves. I was going to tell a room ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic