LG has plans on offering subscriptions for its TV and appliances as part of its ambition to create a business model centred on customer engagement.
The South Korean company is meaning to doing this as part of the plans that will help it to grow company revenue from $51 billion (R917 billion) to $78 billion (R1.4 trillion) over the next six and a half years.
The company said it will innovate with a platform-based service business model that continuously generates profits, like content and services, subscriptions and solutions, to the hardware-oriented businesses, which then help generate sales and profits at the time of purchase.
“This is part of the company’s attempt to create a business model centred on customer engagement, combining services with hundreds of millions of LG devices used by customers around the world.” – the company said.
For an example, one of the plans includes expanding content, services, and product ads on its 200-million-strong fleet of smart TVs, including its high-end OLED and QNED models. The entrance into subscription media forms part of LG CEO William Cho’s goal to transform LG into a “smart life solutions company”, which he hopes to achieve by 2030.
This unfortunately comes at a challenging time since the term “subscription fatigue” emerging to describe the frustration of customers who see growing numbers of subscriptions on their bank statements.
There was a study that was conducted in 2019, which revealed that around 80% of internet users in the US and UK were paying at least one monthly streaming, gaming, or shopping subscription.
At a later stage, studies showed this increased during the lockdowns of the Covid-19 pandemic, but consumers grew increasingly irritated with the volume of services seeking a subscription.
With everything being said, LG is undeterred and will implement its plans to continue growing its annual revenue.
