from Hacker News

Subscription or no subscription? That is not the question

by OberstKrueger on 9/7/20, 11:38 PM with 47 comments

• by valuearb on 9/9/20, 11:35 PM

  This seems like a long winded mess of anecdotal opinions and assumptions, that still somehow ignores the real reason for subscriptions. The list of acceptable uses for subscriptions is silly, subscriptions are always acceptable if your customers accept them. And the authors refusal to try subscriptions out of a fear that short term revenues will decline is an abandonment of long term thinking.

  And I am not a subscription apologist either. I just wrote a long post on the need for Apple to build tools for selling upgrades as good as the ones for selling subscriptions.

  The real driving force for subscriptions is the need for recurring revenue to support a software business, especially bug fixes and enhancements. The one time sales model never worked in software, it was a path to oblivion that was quickly abandoned or never used by the vast majority of PC developers.

  That’s why the PC software market became dominated by maintenance plans and paid upgrades. If you had a good product, and offered valuable new features in an upgrade, your users would be more than happy to buy the upgrade. That matched revenues better to costs, allowing software companies to keep more employees on staff to actually improve the product.

  When Apple came out with the iOS App Store, they broke the upgrade model. Existing users get every update for free. Releasing a large update as a separate product means it can’t access the existing user data because of sandboxing, and it can’t be priced at a discount for existing users.

  There are workarounds to all these problems using in-app purchase and data export/import schemes but they are costly in developer time and offer a poorer user experience than traditional upgrades did.

  I’m convinced if Apple had an upgrade purchasing system as easy to implement as subscriptions, developers would abandon most of their subscriptions and replace them with upgrades.

• by OldHand2018 on 9/10/20, 12:32 AM

  Microsoft offers Office as both a 1-time purchase and on a subscription basis. The price of the 1-time purchase is generally about what a subscription would cost over 3 years.

  Since Office is the kind of tool you would keep for 3+ years and has an established reputation, this doesn't seem like a bad deal. Especially since Office has always been expensive.

  People get angry about subscriptions when the subscription price far exceeds the previous 1-time purchase cost within a reasonable amount of time. In the case of the Android tool in this article, that's either $30 up front or $5 per year. So it seems that the subscription is either underpriced or the up-front price is too high: it's not surprising that they didn't have a lot of anger directed at them. Flip that around and say $15 per year or $30 up front, and I'd bet you have a lot of anger directed at them.

• by PaulDavisThe1st on 9/10/20, 12:37 AM

  As a small developer who lives entirely from software sales, a large part of which are in the form of monthly subscriptions, I think this author misses an important reason for using subscriptions:

      N. You want to smooth out the monthly income associated with sales, avoiding big peaks when you do major releases and avoiding large troughs when there are no releases for some time.
  

  Put differently, if you want me to keep wprking full time on the software, help offer me some assurance that I'll still be able to afford to do so in a month, or 3 months, or 6 months time.

• by mantap on 9/9/20, 11:44 PM

  If you can't convince your users to fund the development of your software with a subscription then perhaps it's not delivering real value to them. After all, if your users are indifferent to your software disappearing into thin air because you can no longer afford to pay the bills, perhaps they never cared that much about it in the first place.

• by renewiltord on 9/9/20, 11:33 PM

  I like Jetbrains' subscription model. Haven't ever not been on the subscription. It just gives me peace of mind knowing I won't be left out to dry if I need to be off it.

• by Fission on 9/9/20, 11:22 PM

  We use iA Writer daily at satchel.com. We pay a one-time cost of $30 per seat, but I think we get much more than $30 worth of value from iA Writer. So when I read the article, I thought that the $5 per month price is much too low for the value we get out of the product. And then I realized it's actually $5 per year.

  Which brings up an interesting observation: the folks at iA seem to be tech purists at heart, and seem disinclined to ask for more money for their products. But I suspect that people would surely be willing to pay more money, and that if they were to price-segment their customers (e.g. by building out some collaboration features for teams, which we would love to have, and then charging a premium for that), they might be able to effect a step function in their business.

• by CubsFan1060 on 9/9/20, 10:58 PM

  This is an interesting statement "Basically, Android was always a struggle, but for the first time since the very beginning, Android is moving towards sustainability."

  And I didn't see any mention of the economics of iOS. From everything I've heard, iOS users are willing to spend more money. In that sense, it does seem like Apple is bringing something to the table with its 30%.

• by syrrim on 9/10/20, 1:45 AM

  Not being familiar with these things, why not just emulate "upgrades" through in app purchases? You would offer a limited version of the app for free, and then prompt users to pay for the full version. Every now and then, you would declare a new version of the app, and only give access to new features you add to relatively recent users. Older users would be prompted to pay (again via iap) a reduced price to get the "upgrade".

  Issues with this are:

  - still has the 30% fee instead of 15%

  - adds complexity, due to needing to track what each feature is, and which users are allowed to access each feature

  - to obviate above, you would probably end up giving all bugfixes/optimizations/etc to old features to all users.

  Could maybe clear up the first point by accepting payment via subscription instead, with the following caveat: "if you stay subscribed for more than 3 years [say], you will gain permanent access to the app, minus any features added after you terminate your subscription". As a user, I would feel pretty good about that (i think), since I'm not locked into either a subscription or a full payment. Of course, this is likely a downside for whoever makes the app, since it probably entails less revenue for them.

• by john-shaffer on 9/9/20, 10:58 PM

  I like the pricing model of language apps like LingoDeer and Rosetta Stone. They offer a lifetime subscription for a one-time fee that costs less than two annual subscriptions. I have no problem taking that offer, but I have no recurring subscriptions for apps.

• by candiddevmike on 9/10/20, 2:41 AM

  Our app (https://about.domestica.app) uses a yearly subscription model for both SaaS and self hosted users. For self hosted users, the licenses are permanent/perpetual, but tied to a minor version (i.e. the last release before your subscription runs out is 1.1.0, you can get 1.1.1, but not 1.2.0, etc).

  We've played around with different pricing (monthly, tiers) and none of them changed conversions much. What did help was replacing the free trial (no CC required) with a free tier, as it provided more of an onboarding journey and the subscription purchase becomes the next logical step.

• by jrs235 on 9/9/20, 11:01 PM

  Prior to monthly or annual subscriptions, business software was purchased for a larger lump sum up front and perpetually owned. If you wanted to get updates and support you often paid a yearly maintenance fee ranging from 10% to 30% of the initial license/software cost. Saas, Software as a service was originally paying a monthly or annual fee for the software maker to also pay and run the servers. Now it seems Saas stands for software as a subscription where that still applies but everyone expects continuous never ending features to be added.

• by pedalpete on 9/10/20, 12:21 AM

  I've been thinking about this quite a bit, and though the DropBox is mentioned briefly, I'd really like to understand more about why we're comfortable with paying a subscription to them, but not other similar apps.

  We're building a wearable, so we're in the hardware space, but there is processing of data and personalized improvements to each users experience happening every day. I think we're similar to Whoop in this way. Any Whoop users want to chime in about how they feel about the subscription model?

• by anonfunction on 9/10/20, 4:30 AM

  If anyone else is finding the style hard to read here's a link to the outline version (you can do it to most articles by just prefixing the URL with outline.com/)

  https://outline.com/JMZJJH

• by thetechimist on 9/10/20, 4:36 AM

  Hard to see how apps like this exist. The author seems to enjoy writing about his app as much as creating technology that exists already, and has for decades.

  For $7/mo, you can have MS Office. You get a real Word Processor for all possible writing that happens in the real world where proper want to collaborate on business documents, or use Focus Mode for distraction-free creative writing. IA makes a big deal about their grammar checking but so what? Other word processors have had it for years and MS’s is genuinely impressive when you learn how to set it for your needs. Plus for the same price, you get the workhorse beast Excel, a business email and calendaring client (Outlook), the #1 presentation tool (PowerPoint), and a highly functional note-taking tool (OneNote).

  I’m not trying to push Microsoft’s product line. There are others like Corel, or Apple’s iWork suite.

  I just don’t understand the plethora of “distraction-free” editors, or all the fuss about code editors. Just use VS Code, JetBrain, Atom, or what have you. But as we speak, people are sweating to create yet more code editors which will have twice the bugs and half the functionality of the existing ones.

  The world of writing tools is even worse. Markdown is a bit of a joke in the real world. If I see one more article about how someone wrote a book or dissertation using markdown, python, pandoc, makefile, and git... sigh! The reason they write those blog posts is because no one would believe anyone would go through the hassle of avoiding Microsoft Word to that extreme. It’s one thing to be a bit “retro” and keep using WordStar or WordPerfect, but those are at least real word processors.