LG had a big year in 2022, raking in a record $66.8 billion in revenue. That's not enough for the South Korean electronics giant to continue business as usual. CEO William Cho has outlined an ambitious plan to upset LG's customers with a vast expansion of subscription-based features. Cho believes this plan will deliver LG even beefier sales by 2030, despite what we expect will be very loud complaints.
LG first hinted that it might want to sell more subscription services in 2022, but it has filled in the gaps with the new announcement. The company claims these "customer engagement" features are essential to reforge LG as a "smart life solution company." The press release uses a plethora of cute euphemisms like that, but what we're talking about is paying a monthly fee after you already paid for the hardware. LG plans to lock features in LG electronics and appliances unless you pay for a monthly subscription.
This will no doubt include premium features in future devices that are locked out of the box, but LG has also discussed ways it might update existing products to add subscriptions. Consumer protection laws would most likely prevent LG from paywalling capabilities included at the time of purchase, but it could add new paid features. For example, LG has discussed selling customized dryer routines matched to your home's climate. Existing TVs will probably see more changes than appliances with branded services, ads, and other revenue-generating content arriving in software updates.
Many products and services have adopted a subscription model over the past decade. Adobe migrated all of its image and video editing apps to the Creative Cloud service, and automakers like BMW have begun putting rather basic features like heated seats and CarPlay behind a paywall. It's not surprising that your clothes dryer might try to sell you custom drying routines.
LG has been steadfast in its quest for higher revenues in recent years. After being one of the earliest smartphone makers, LG's mobile division suffered many big losses in the late 2010s. The company decided to end smartphone manufacturing in 2021 to focus on TVs and appliances, and it appears that focus has led it to subscriptions. Be wary of those software updates.
