3 ms·
> Low subscription prices are sustainable when the subscriber base is growing and continually bringing in more money, but at some point most of the customer bas
by IAmGraydon 6y ago
> Low subscription prices are sustainable when the subscriber base is growing and continually bringing in more money, but at some point most of the customer base has been reached and then the only way to increase revenue is to raise prices.
This makes no sense. These services charge a monthly fee. What you are saying only applies to business models that charge a single upfront fee.
- xg15 6y agoI think it works under some circumstances, for a limited time: Imagine you have some fixed costs per user and some fixed revenue per user. Revenue is less than costs, so in theory, you should make a loss each month. However, imagine you find a way to have costs lag a month behind revenue: A user pays their fee on first of month n, costs occur on first of month n+1. Then as long as you keep acquiring new users, you can "run away from your costs" by paying your gap with the "extra fees" of new users. Of course this is completely unsustainable and basically a ponzi-scheme - but I imagine there will be temptation to do this, as long as there is sufficient growth...