E&M

The rapid rise and fall of subscription-based platforms that aggregate physical services, such as MoviePass, and the sustained but complex evolution of others, like ClassPass, are often viewed as unpredictable sagas of Silicon Valley disruption. In reality, the opposite appears to be true: Their success or failure is not random but can be predicted, managed, and designed using a clear strategic framework derived from rigorous economic theory. The core challenge these platforms face is the “Platform Paradox.” Namely, the act of entering a market as an aggregator inherently intensifies price competition, which, if left unmanaged, erodes profitability for vendors, the platform itself, and the entire industry ecosystem.