Microtransaction Hell: BMW Now Selling Subscriptions For Heated Seats

As cars become more software dependent, auto companies are looking at technology company models to drive revenue. 

But while the steady monetization of services may be financially attractive, it is not clear that such "nickel and diming" of customers buying expensive products is an intelligent long term brand building exercise or whether it will diminsh brand loyalty. JL 

Aimee Picchi reports in CBS:

BMW is turning to an unusual business model for car buyers in some countries: If you want heated seats, you'll have to sign up for a subscription plan of $17 a month. To access the actual seat-warming function, customers must purchase a $17 monthly subscription plan or else pay up about $416 to unlock the service on an "unlimited basis." Once the purchase is made, the seat warmers are "then activated in your vehicle, (which) breeds a future where people have to jailbreak their car for features that are already built into it."

BMW is turning to an unusual business model for car buyers in some countries: If you want heated seats, you'll have to sign up for a subscription plan of about $17 a month to get your tush warmed up. 

The BMW subscription plan for seat heaters is sold in the U.K., where the fee is about $17 a month, and South Korea, where it costs about $18 a month, according to The Verge, which earlier reported on the development. 

According to BMW's U.K. site, some cars are installed with seat warmers "at no extra cost." But to access the actual seat-warming function, customers must purchase a $17 monthly subscription plan or else pay up about $416 to unlock the service on an "unlimited basis." Once the purchase is made, the seat warmers are "then activated in your vehicle," the site notes. 

More companies are turning to subscription models which provide a steady source of revenue to businesses and have gained in popularity in recent years, according to a 2021 report from consulting firm McKinsey. From 2021 through 2018, subscription plans grew more than 300%, or five times faster than revenue at S&P 500 companies, the report noted. 

"Microtransaction hell"

The seat warmer subscription plan sparked a backlash on social media, suggesting that consumers may be growing wary of monthly fees for everything from their video-streaming services to clothing, like Amazon's Personal Shopper service.

And while consumers may be used to paying monthly fees for services like satellite radio in their cars, it remains unusual to pay a subscription fee for an automobile's hardware elements. After all, typically when a consumer buys a car, all the hardware is included as part of the purchase price — tires, seats, steering wheel, defroster and so on. 

"The car will come with all the necessary components, but payment is needed to remove a software block," one Twitter observer noted. "Welcome to microtransaction hell."

Another Twitter user commented, "BMW is starting to sell a subscription fee for heated seats to remove the software that blocks you from gaining access to it. Capitalism doesn't breed innovation. Capitalism breeds a future where people have to jailbreak their car for features that are already built into it."

BMW isn't selling the seat warmer subscription in the U.S., the company said.

"Options like heated seats are ordered on over 90% of the BMW's sold in the USA," a spokesman said in an email to CBS MoneyWatch. "BMW of North America does not expect factory option purchase levels to change significantly going forward."

But in 2020, BMW in the U.S. started a set of subscription services called "Functions on Demand." These include a dash camera function called BMW Drive Recorder and a service called BMW Remote Engine Start function. 

"With BMW Functions on Demand, customers will be able to explore new software-based features on a short-term basis by purchasing a trial, or buying that feature outright for a period of time or for the life of the vehicle," the spokesman noted. 

These services are "intended primarily as a digital aftersales solution and will not affect options that were ordered at the time of the vehicle purchase," he added.