The Subscription Economy Was Always a Workaround. The Workaround is Ending.

Everyone thinks they know the story of digital disruption.

Napster destroyed the music industry. Pirates won. Then Steve Jobs swooped in with iTunes, offering 99-cent songs and teaching an entire generation about micropayments. The future was unbundled—pay only for what you use, one transaction at a time.

Except that's not what happened.

Napster didn't lead to iTunes as the endgame. It led to Spotify. To Netflix. To the $10-per-month, all-you-can-eat buffet model that now dominates everything from entertainment to enterprise software.

The bundle didn't die. It came roaring back, bigger and more dominant than the CD collections it replaced. We went from buying albums to buying all the albums, served up in an infinite stream for a flat monthly fee.

But here's what nobody wants to admit: the subscription model wasn't the destination. It was a detour.

A workaround we built because the infrastructure couldn't handle the future we actually wanted. We've been living in that workaround for so long that we mistook it for the final answer. We built entire business models, pricing strategies, and growth frameworks around constraints that no longer exist.

Those constraints are dissolving right now. And when they're gone, the entire subscription economy has to answer an uncomfortable question: What are we actually for?

Why Subscriptions Won (And It Wasn't Innovation)

The standard narrative says subscriptions won because they were better for everyone. Predictable revenue for companies. Unlimited access for consumers. A win-win that aligned incentives and created sustainable business models.

That's marketing copy, not reality.

Subscriptions won because two critical systems were fundamentally broken, and nobody had a better solution.

The Payment Infrastructure Was Broke

First, the payment rails couldn't profitably process small transactions. Still can't, really.

Try to sell something for 99 cents and watch what happens to your margin. Credit card interchange fees, fraud prevention systems, settlement costs, reconciliation overhead—the entire payment processing stack was designed for larger purchases. It collapses under the weight of micropayments.

Apple could pull it off with iTunes, barely, by taking 30% of every transaction and operating at a scale that made the math work. But even then, the economics were marginal at best. For everyone else? Forget it. Selling individual pieces of content or features for pennies or dollars wasn't viable.

The infrastructure made it cheaper to sell everything in bulk. So that's what we did.

Human Bandwidth Was Broken Too

But even if payments had been free, there was a second problem: humans couldn't handle the cognitive load.

Decision fatigue is real. Nobody wants to evaluate whether a song is worth 99 cents every time they want to listen to something new. Nobody wants to decide if this article is worth 50 cents or if that feature is worth $3 this month.

We have a limited capacity for decisions. Every micro-transaction requires evaluation, judgment, second-guessing. Is it worth it? Should I wait? Can I find it cheaper? That friction adds up fast.

By the time you're making 500 micro-purchasing decisions a month—which is what an unbundled world actually requires—you're exhausted. The mental overhead becomes unbearable.

Subscriptions solved this by removing the decision entirely. Pay once, use unlimited. The friction disappears. You're no longer evaluating individual value propositions; you're buying peace of mind and infinite optionality.

So we got Spotify. And Netflix. And every SaaS product charging per seat per month.

The subscription wasn't a business model innovation. It was a pragmatic workaround for broken infrastructure and limited human processing power.

SaaS: Spotify for Software

Look at the SaaS industry through this lens and suddenly everything makes sense.

Why does every software company want to charge you monthly per seat? Why are we all drowning in subscriptions for tools we barely use? Why does software that could cost $50 one-time instead cost $20 per month forever?

Because SaaS is the new Spotify. A bundling workaround we've mistaken for the natural order of software.

The per-seat, per-month pricing model exists because it was the only way to make the economics work given the constraints. Usage-based pricing requires too many transactions. One-time purchases don't create predictable revenue. Pay-per-feature creates decision fatigue.

So we bundled. We sold seats. We locked customers into annual contracts. We built entire go-to-market strategies around reducing churn and expanding accounts.

And it worked. For two decades, it worked brilliantly.

But again: it worked because the alternatives were broken. The alternatives aren't broken anymore.

The Constraints Are Dissolving

Two fundamental shifts are underway right now, and they're eliminating the constraints that made subscriptions necessary.

Stablecoins Fix Payment Rails

Cryptocurrency—specifically stablecoins—can process penny transactions profitably. Sub-cent transactions, even. The cost of a blockchain transaction isn't tied to the transaction size, and stablecoin infrastructure is being built explicitly to handle high-volume, low-value transfers.

Suddenly, micropayments become economically viable. You can charge three cents for an article, eight cents for a song, two dollars for a feature—and the economics actually work. No 30% platform tax. No minimum transaction fees eating your margin.

The payment infrastructure constraint is dissolving.

AI Agents Eliminate Decision Fatigue

Meanwhile, AI agents can make thousands of purchasing decisions without cognitive fatigue. They don't get tired. They don't second-guess. They evaluate value propositions based on your preferences and constraints, then execute transactions automatically.

Want to listen to music? Your AI finds the best song for your mood and pays 2 cents for the stream. Need a software feature? Your AI evaluates whether you'll use it enough to justify 50 cents this month and handles the transaction.

The human bandwidth constraint is dissolving too.

What Happens Next?

So here's the uncomfortable question for every subscription business:

What happens when the workarounds you built your company on are no longer necessary?

What happens to Spotify when payment friction disappears and an AI curator handles the cognitive load of evaluating every song? Why would I pay $10 a month for unlimited music when my AI can pay pennies per stream for exactly what I want?

What happens to SaaS companies when customers can pay micro-amounts for actual usage instead of flat monthly fees for bundled seats? Why would I subscribe to your entire platform when I can pay cents for the specific API calls or features I actually need?

What happens to Netflix, to Substack, to every bundle we've built, when the original constraints that justified bundling are gone?

The subscription economy was always temporary. We just didn't realize it because we've been living inside it for so long.

The bundle made sense when the alternatives were broken. The alternatives aren't broken anymore.

The companies that figure this out first—that rebuild for a world of frictionless micropayments and AI-mediated transactions—will define the next era. Everyone else will be defending a business model built on constraints that no longer constrain.

The workaround is ending. What are you building for what comes next?