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I'm surprised Marco is billing $1/month in 3 month intervals... I'd have just billed $12/year. $12 is hardly a large payment chasm for a customer, particularly
by dotBen 16y ago
I'm surprised Marco is billing $1/month in 3 month intervals... I'd have just billed $12/year.
$12 is hardly a large payment chasm for a customer, particularly if you've already told them that they're not going to get anything particularly extra for their subscription and they're still interested.
But it also makes the fixed-fee on the transaction a lower %age of the total sale and of course from a cash-flow perspective you have a full 12 months income in the bank now.
- johns 16y agoThis does give him the flexibility to raise prices in 3 months though.
- awa 16y agoWell unless he's still trying to discover the sweet price point.. If he thinks he wants to charge $3 a month after 3 months, he will still have most of the early adopters ready to pay instead of waiting for a year for the subscription to expire for the early adopters
- lotusleaf1987 16y agoLike he says: PayPal takes a minimum of $0.30 from each transaction, so processing a bunch of $1 transactions is wasteful. He probably also doesn't want to scare people away who might not want to spend more than $5. Spending $3 won't scare people away.
- stevefink 16y agoDon't forget, Marco is not shy to charge $4.99 for Instapaper in the App Store. I do not have the statistics right now to back it up (although I'm sure a few Google queries could), but I'm fairly confident that's above the average price for an app.
- seancron 16y agoThe iPhone app also has some value to it that makes it worth the $4.99, e.g., 250 article capacity, iPad compatible, and it remembers your position. The only benefit subscribing gives to you right now is being able to hide ads, which people can already do for free, and the warm, fuzzy feeling you get from supporting Instapaper's development.
- alanh 16y agoNot to be nitpicky, but there are some insanely expensive apps (medical, etc.) in the store, but probably most are under $1 — so for distributions like that, the median is much more useful a statistic than mean.
- paulsingh 16y agoOne of the downsides to billing $12/year is that you have to really start thinking about unearned revenue and all that fun stuff. This might be a way to avoid that mess and give him the ability to reprice in three months if that becomes necessary.