I think it’s only a matter of time before consumers become accustomed to paying subscription fees for online services that they use regularly. Dave McClure agrees in an entertaining rant about subscriptions.

His basic argument is that susbcriptions are a good revenue model, but to make them work you’ve got to get people to pay, and there’s a lot of friction (i.e. costs, perceived and actual) in that process — most notably the problem that people forget their passwords. This means that services for which people actually remember their passwords (i.e. those they use often, like Facebook and iTunes) have an advantage in online payments. In other words, a service for which people remember their password has some market power.

Some quotes:

Newsflash folks: The Internet does NOT want to be FREE… It wants to GET PAID on Fucking Friday, just like everybody else on the damn planet. …

Surprise, surprise… most people don’t like to pay you squat unless they have no other choice. And aside from the user’s disinclination to pull out their wallet, there’s also the problem of wallet friction itself — payment conversion is shitty for many reasons other than just price. Mainly it’s because we can’t remember our password. …

The key to success — one might even say DOMINANCE — in payment systems is to begin with the foundation of frequent-use products, so that users won’t forget their passwords. Whether intentional or not, Facebook has played this game to perfection.