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On the other hand, products that don't have subscription pricing are compelled to continue to add hot new features in a never-ending race of convincing their cu
by Elepsis 10y ago
On the other hand, products that don't have subscription pricing are compelled to continue to add hot new features in a never-ending race of convincing their customers that they really should pay x dollars every 1-3 years for an upgrade.
That's not to mention that they have to deal with maintaining old versions of their products, and support costs that could easily exceed the LTV of a particular customer.
As a customer, I am often hesitant to shell out the big bucks for subscription software, especially because both Microsoft and Adobe have set up a pretty clear ceiling on what I consider to be worthwhile by charging $10/month for really really compelling product offerings (O365 Home for Microsoft, Photoshop & Lightroom for Adobe). So a "small"/less compelling app has to charge a good bit less for me to be willing to pay.
But in the long run, I'd rather pay, say, $20/year for a useful piece of software in perpetuity than $100 once every five years--because that way I always have the latest version and don't have to think about whether I really want to upgrade or not. And that aligns my incentives with those of the developer and reduces their support costs.
Over time, I imagine small software developers will figure out what a reasonable price is for subscriptions, and more software of any complexity will converge on this model. I, for one, don't especially mind.
- awinter-py 10y agoAligned incentives is a cool insight. If windows (for example) were on a monthly subscription model instead of a bi-yearly upgrade model, I think a lot of the consumer-facing failures at msft post-win2k wouldn't have happened. They couldn't bundle new features with breaking changes in a gradual-improvement subscription model.
- galfarragem 10y agoWith a monthly subscription model most of that failures wouldn't have happened because they wouldn't be using windows anymore..
- awinter-py 10y agofair point -- it would take a lot of convincing to get consumers to pay for security updates and USB drivers
- Silhouette 10y agoBut in the long run, I'd rather pay, say, $20/year for a useful piece of software in perpetuity than $100 once every five years--because that way I always have the latest version and don't have to think about whether I really want to upgrade or not. And that aligns my incentives with those of the developer and reduces their support costs. Someone in my household got prompted to upgrade an iOS app they enjoy this evening. Apparently in this case, that person's incentives were aligned with the developer's, except for the new version including ads that weren't there before, charging via IAP for content that was free before, and not actually running anyway because it now has iOS 9 as a minimum requirement. Sometimes having the latest version is a double-edged sword. If the developer has no incentive not to exploit customers who are already locked into their subscription model anyway, make that most times, in my experience.
- Spooky23 10y agoI think this is death for small developers. How many "easy monthly payments" do people want to deal with? Microsoft and Google can add little features that do just enough to wipe out niche products and make their suites stickier. Example: Google Docs voice dictation
- danieldk 10y agoI think this is death for small developers. How many "easy monthly payments" do people want to deal with? Also, people will be comparing subscription prices to Microsoft et al. If I am paying ~$7 per month for an Office 365 subscription[1] that comes with Office, 1TB OneDrive space, Skype minutes, etc., $4 for some small utility would be overpriced. [1] I actually pay far less, since I can use the academic version.
- Spooky23 10y agoExactly. How many Dropbox customers went to that model for free, even though OneDrive is a garbage product in comparison?
- Elepsis 10y agoNot that many people want to deal with "easy monthly payments." Which is why most small developers should be charging their subscriptions annually.
- leereeves 10y ago> Microsoft and Adobe have set up a pretty clear ceiling on what I consider to be worthwhile by charging $10/month for really really compelling product offerings Both are still trying to convince owners of old lifetime-licensed versions to sign up for subscriptions. Will these low prices last when the strategy changes from "sign up more people" to "profit from the users we have"?
- SyneRyder 10y agoAdobe has already announced a 20% price rise in Australia for Creative Cloud Photography (Photoshop/Lightroom), starting from 1 May 2016.