9 ms·

BMW wants to sell subscriptions to in-car features

32 points by loriverkutya 6y ago

deleted 6y ago
[deleted]
radoslawc 6y ago
Funny that BMW is pushing it again after CarPlay subscription fiasco.
mc32 6y ago
Everyone loves recurring revenue. They’ll find as many ways to make it happen as possible. From club memberships to entertainment and sports to software and and now durable goods. On the other hand it means you can have partial ownership of things for a slice of time. As in housing rental, it offers flexibility (the alternative for people who can’t afford to build an average house is to build a shanty...
- radoslawc 6y ago
  It just a way to squeeze some more money out of customers. Add some nice marketing babble that it's for customer's own good (lower maintenance fees, offer simplified pricing, add elasticity, energy, synergy, bulshitergy) and here you have it: "I'm sorry your subscription for AC has expired". Funny enough there already are lines of cars where engine power and torque is just set in software, so buying most expansive engine version is just buying cheapest version with some variable in ECU software set to different value. For me this is equivalent of selling premium version of application which has sleep=10 removed from every loop and advertise it as many times faster. Why people are accepting this? Take SketchUp for example, they recently went subscription only and CAD software has somewhat steep learning curve, and you kind of learn using it as "muscle memory" of shortcuts and general flow. I bet many people will just buy subscription just for convenience of going on with their work or hobby projects in familiar software.
  - sokoloff 6y ago
    Are producers obligated to only sell at cost-plus, or are they permitted to sell based on value to the buyer? Do I cost an airline more money to transport me out on a Monday and back on a Friday than the converse? (I suspect not, but not staying Saturday night makes the former ticket more expensive on many carriers.) Does SSO really cost as much to provide as the “enterprise pricing” tier suggests? Those higher priced business flights or enterprise tier purchases help subsidize the lower cost options, making it possible to sell a base version and a deluxe and get enough revenue to make the economics attractive. I remember years ago shopping for a Jeep Wrangler. There was a ~$175 option for a larger gas tank (22 vs 18 gallons or so). If you bought the option, you got the same physical tank and a shorter pipe from the filler into the top of the tank (so more fuel would go in before the pump clicked off). To the buyer of the Jeep, that option was worth something. I’m OK with Jeep offering it. (I wouldn’t buy it, since you could easily install the “larger tank” with a hacksaw, but I’m sure many did.)
    - x86_64Ubuntu 6y ago
      That's not what's happening here. People are complaining that functionality that is considered to be default is now being based on recurring fees. Your analogy of the gas tank is exactly what is not happening. It would only make sense if you had to pay a monthly fee for the extra 4 gallons, and failure to do so would cause your tank to fill up earlier.
    - tonyedgecombe 6y ago
      Those higher priced business flights or enterprise tier purchases help subsidize the lower cost options, making it possible to sell a base version and a deluxe and get enough revenue to make the economics attractive. The purpose isn't to subsidise poorer customers though. Rather it's to maximise revenue.
- Gibbon1 6y ago
  The divide here is who holds the bag. With a straight rental the rental company is responsible for anything that goes wrong. You of course pay a levelized premium for not having to deal with that. With this stuff they get the reoccurring revenue and you're the one taking on the risk.
nicbou 6y ago
I am not in the market for a car, but I don't think I'd ever want to buy a vehicle I don't fully own. Cars last for decades. That's a lot longer than short-lived technologies and standards, and especially online services. Fortunately, this trend hasn't quite reached the motorcycle world yet, but I know KTM charges you to enable "rally mode" on your motorcycle. I sometimes wonder what we will really own in 10 years. The operating system on my phone and laptop are already taking worrying liberties.
- thomascgalvin 6y ago
  > I don't think I'd ever want to buy a vehicle I don't fully own. Cars last for decades. That is the "issue" BMW is trying to solve here. Just like software subscriptions, this automaker is trying to wring out more money for no work. Hard pass.
  - perl4ever 6y ago
    They already make unreliable cars and try to make it as difficult as possible for amateurs and independents to repair, including the electronic aspects. Doing things that should be simple, like changing the spark plugs or transmission fluid, can be nightmarish. Out of warranty BMWs often have oil leaks, that sometimes are as simple as replacing a cheap gasket but will run you $500+ for a dealer to fix. Here is a description of the procedure to replace the valve cover on a lot of recent BMWs for DIYers: https://www.e90post.com/forums/showthread.php?t=1197637 https://www.e90post.com/forums/showthread.php?t=1197637 It's kind of strange to me that this should be sustainable, because if you're designing cars only for a short lease period when they're under warranty, shouldn't this be less profitable than having better resale value?
- tonyedgecombe 6y ago
  In the UK a lot of people buy their cars on personal contract plans. It's not a full lease but not really that far away either. The direction of travel seems clear.
- wjnc 6y ago
  I would love a more rational approach to software pricing and security. We live in a time that makes clear that good software requires constant maintenance. Why shouldn't the pricing reflect the cost structure of companies. Once all you got was a few months of warranty. I can account for that. Decades of software fixes and yet unknown bugs - I can't account for that in advance. This goes for all machines connected: phones, cars, TVs, personal computers. No more planned obsolescence, but pricing-to-cost. I can even imagine tiering. One price for Android-security, another for Android-security+functionalities, etc (/s/Android/any software).
jdhn 6y ago
This is something that I’m warily watching as we move towards a predominantly BEV fleet. I don’t like the idea of subscriptions in software, and I really don’t like it when it comes to vehicles. It will be interesting to see how automakers deal with users who take matters into their own hands and start tinkering with code in order to access features that would otherwise be locked away if you don’t have a subscription. There’s already lots of experience in the ICE world of tuning the ECU, and I wouldn’t be surprised to see them have a “secret menu” if subscriptions become rampant across vehicles.
anm89 6y ago
I used to think stuff like this was crazy and destined to fail but I've really become aware of how far my preferences are from the norm over the last 5 years. I think people on average are very open to integrating many subscription services into their lives.
- m463 6y ago
  I think this might be something slightly different than you suggest. I think all of it is (intentionally) confusing and people are always on the verge of being overwhelmed and say ok fine ok accept it's only 99 cents, etc Somewhere I read something like "californians are ok with paying all the taxes" but it's not that they're fine with it.
- tonyedgecombe 6y ago
  I always think about the complaints Adobe got when they switched to subscription only. People were saying it was the end of Adobe and they wouldn't survive. In reality their revenues have increased, from their perspective it was a good decision.
jti107 6y ago
i guess there are no gamers at BMW...otherwise they'd know about the rage that micro transactions elicit
- tonyedgecombe 6y ago
  It's not even that rational. We know what the cost is and can decide if it's worth it or not. But you can see from this discussion people get quite emotional about it.
mcbutterbunz 6y ago
> Say you buy a model with heated seats. You could pay for that feature only during the cold months of the year. If I bought a model with heated seats, why would I pay to access the feature that I already paid for? As everyone else will point out, this is clearly a way to extract more money from customers. I can't see any alternative.
rland 6y ago
Who comes up with these ideas? I swear, there is a class of people (seemingly in charge of every decision at big companies now) who just sit there and try to come up with ways of extracting money from customers without adding value to the equation what-so-ever. I'm sure the guy who came up with this brilliant idea was paid a huge bonus -- while the engineers actually trying to make a better car get nothing. It's so tiring to see this happen again and again everywhere. It seems actually doing things -- anything at all -- doesn't really matter to companies any more. Who teaches people that this is OK?
- yummypaint 6y ago
  I despise this too, but it seems to be a viable strategy. Personally this completely destroys any trust and semblance of brand loyalty when a company does this because it's so openly adversarial. The message is always "nice hardware you bought there, shame if it were to suddenly stop working." The big question for me is why people continue buying products with this cancer in them. If enough people are willing to buy elsewhere this could conceivably be fixed.
- x86_64Ubuntu 6y ago
  MBAs
- sitkack 6y ago
  > Who teaches people that this is OK? Candy Crush. Farmville. Pervasive market segmentation. What happens when the children who were fed a constant diet of DLC become the c-levels of our future corporations? That world to me looks like some shitty vending machine version of corpofacism
siruncledrew 6y ago
Sell a >$40k car, and bill ‘owners’ $10-20/mo for the entire life of the car for convenience features is an easy way to squeeze a few $1000s more from consumers. It’s also a great way to get consumers to hate it after being nickel-and-dimed.
mips_avatar 6y ago
The way the automotive industry thinks about market segmentation and now subscriptions is beyond frustrating. They want the same car to sell at 3 different price points, but because there is nearly zero marginal costs for most features the companies typically just build the top features in all the cars and then turn them off in the cheap ones. I see why BMW is doing this, but It still makes me angry.

32 points by loriverkutya 6y ago

deleted 6y ago

[deleted]

radoslawc 6y ago

Funny that BMW is pushing it again after CarPlay subscription fiasco.

mc32 6y ago

Everyone loves recurring revenue. They’ll find as many ways to make it happen as possible. From club memberships to entertainment and sports to software and and now durable goods. On the other hand it means you can have partial ownership of things for a slice of time. As in housing rental, it offers flexibility (the alternative for people who can’t afford to build an average house is to build a shanty...

radoslawc 6y ago
It just a way to squeeze some more money out of customers. Add some nice marketing babble that it's for customer's own good (lower maintenance fees, offer simplified pricing, add elasticity, energy, synergy, bulshitergy) and here you have it: "I'm sorry your subscription for AC has expired". Funny enough there already are lines of cars where engine power and torque is just set in software, so buying most expansive engine version is just buying cheapest version with some variable in ECU software set to different value. For me this is equivalent of selling premium version of application which has sleep=10 removed from every loop and advertise it as many times faster. Why people are accepting this? Take SketchUp for example, they recently went subscription only and CAD software has somewhat steep learning curve, and you kind of learn using it as "muscle memory" of shortcuts and general flow. I bet many people will just buy subscription just for convenience of going on with their work or hobby projects in familiar software.
- sokoloff 6y ago
  Are producers obligated to only sell at cost-plus, or are they permitted to sell based on value to the buyer? Do I cost an airline more money to transport me out on a Monday and back on a Friday than the converse? (I suspect not, but not staying Saturday night makes the former ticket more expensive on many carriers.) Does SSO really cost as much to provide as the “enterprise pricing” tier suggests? Those higher priced business flights or enterprise tier purchases help subsidize the lower cost options, making it possible to sell a base version and a deluxe and get enough revenue to make the economics attractive. I remember years ago shopping for a Jeep Wrangler. There was a ~$175 option for a larger gas tank (22 vs 18 gallons or so). If you bought the option, you got the same physical tank and a shorter pipe from the filler into the top of the tank (so more fuel would go in before the pump clicked off). To the buyer of the Jeep, that option was worth something. I’m OK with Jeep offering it. (I wouldn’t buy it, since you could easily install the “larger tank” with a hacksaw, but I’m sure many did.)
  - x86_64Ubuntu 6y ago
    That's not what's happening here. People are complaining that functionality that is considered to be default is now being based on recurring fees. Your analogy of the gas tank is exactly what is not happening. It would only make sense if you had to pay a monthly fee for the extra 4 gallons, and failure to do so would cause your tank to fill up earlier.
  - tonyedgecombe 6y ago
    Those higher priced business flights or enterprise tier purchases help subsidize the lower cost options, making it possible to sell a base version and a deluxe and get enough revenue to make the economics attractive. The purpose isn't to subsidise poorer customers though. Rather it's to maximise revenue.
Gibbon1 6y ago
The divide here is who holds the bag. With a straight rental the rental company is responsible for anything that goes wrong. You of course pay a levelized premium for not having to deal with that. With this stuff they get the reoccurring revenue and you're the one taking on the risk.

nicbou 6y ago

I am not in the market for a car, but I don't think I'd ever want to buy a vehicle I don't fully own. Cars last for decades. That's a lot longer than short-lived technologies and standards, and especially online services. Fortunately, this trend hasn't quite reached the motorcycle world yet, but I know KTM charges you to enable "rally mode" on your motorcycle. I sometimes wonder what we will really own in 10 years. The operating system on my phone and laptop are already taking worrying liberties.

thomascgalvin 6y ago
> I don't think I'd ever want to buy a vehicle I don't fully own. Cars last for decades. That is the "issue" BMW is trying to solve here. Just like software subscriptions, this automaker is trying to wring out more money for no work. Hard pass.
- perl4ever 6y ago
  They already make unreliable cars and try to make it as difficult as possible for amateurs and independents to repair, including the electronic aspects. Doing things that should be simple, like changing the spark plugs or transmission fluid, can be nightmarish. Out of warranty BMWs often have oil leaks, that sometimes are as simple as replacing a cheap gasket but will run you $500+ for a dealer to fix. Here is a description of the procedure to replace the valve cover on a lot of recent BMWs for DIYers: https://www.e90post.com/forums/showthread.php?t=1197637 https://www.e90post.com/forums/showthread.php?t=1197637 It's kind of strange to me that this should be sustainable, because if you're designing cars only for a short lease period when they're under warranty, shouldn't this be less profitable than having better resale value?
tonyedgecombe 6y ago
In the UK a lot of people buy their cars on personal contract plans. It's not a full lease but not really that far away either. The direction of travel seems clear.
wjnc 6y ago
I would love a more rational approach to software pricing and security. We live in a time that makes clear that good software requires constant maintenance. Why shouldn't the pricing reflect the cost structure of companies. Once all you got was a few months of warranty. I can account for that. Decades of software fixes and yet unknown bugs - I can't account for that in advance. This goes for all machines connected: phones, cars, TVs, personal computers. No more planned obsolescence, but pricing-to-cost. I can even imagine tiering. One price for Android-security, another for Android-security+functionalities, etc (/s/Android/any software).

jdhn 6y ago

This is something that I’m warily watching as we move towards a predominantly BEV fleet. I don’t like the idea of subscriptions in software, and I really don’t like it when it comes to vehicles. It will be interesting to see how automakers deal with users who take matters into their own hands and start tinkering with code in order to access features that would otherwise be locked away if you don’t have a subscription. There’s already lots of experience in the ICE world of tuning the ECU, and I wouldn’t be surprised to see them have a “secret menu” if subscriptions become rampant across vehicles.

anm89 6y ago

I used to think stuff like this was crazy and destined to fail but I've really become aware of how far my preferences are from the norm over the last 5 years. I think people on average are very open to integrating many subscription services into their lives.

m463 6y ago
I think this might be something slightly different than you suggest. I think all of it is (intentionally) confusing and people are always on the verge of being overwhelmed and say ok fine ok accept it's only 99 cents, etc Somewhere I read something like "californians are ok with paying all the taxes" but it's not that they're fine with it.
tonyedgecombe 6y ago
I always think about the complaints Adobe got when they switched to subscription only. People were saying it was the end of Adobe and they wouldn't survive. In reality their revenues have increased, from their perspective it was a good decision.

jti107 6y ago

i guess there are no gamers at BMW...otherwise they'd know about the rage that micro transactions elicit

tonyedgecombe 6y ago
It's not even that rational. We know what the cost is and can decide if it's worth it or not. But you can see from this discussion people get quite emotional about it.

mcbutterbunz 6y ago

> Say you buy a model with heated seats. You could pay for that feature only during the cold months of the year. If I bought a model with heated seats, why would I pay to access the feature that I already paid for? As everyone else will point out, this is clearly a way to extract more money from customers. I can't see any alternative.

rland 6y ago

Who comes up with these ideas? I swear, there is a class of people (seemingly in charge of every decision at big companies now) who just sit there and try to come up with ways of extracting money from customers without adding value to the equation what-so-ever. I'm sure the guy who came up with this brilliant idea was paid a huge bonus -- while the engineers actually trying to make a better car get nothing. It's so tiring to see this happen again and again everywhere. It seems actually doing things -- anything at all -- doesn't really matter to companies any more. Who teaches people that this is OK?

yummypaint 6y ago
I despise this too, but it seems to be a viable strategy. Personally this completely destroys any trust and semblance of brand loyalty when a company does this because it's so openly adversarial. The message is always "nice hardware you bought there, shame if it were to suddenly stop working." The big question for me is why people continue buying products with this cancer in them. If enough people are willing to buy elsewhere this could conceivably be fixed.
x86_64Ubuntu 6y ago
MBAs
sitkack 6y ago
> Who teaches people that this is OK? Candy Crush. Farmville. Pervasive market segmentation. What happens when the children who were fed a constant diet of DLC become the c-levels of our future corporations? That world to me looks like some shitty vending machine version of corpofacism

siruncledrew 6y ago

Sell a >$40k car, and bill ‘owners’ $10-20/mo for the entire life of the car for convenience features is an easy way to squeeze a few $1000s more from consumers. It’s also a great way to get consumers to hate it after being nickel-and-dimed.

mips_avatar 6y ago

The way the automotive industry thinks about market segmentation and now subscriptions is beyond frustrating. They want the same car to sell at 3 different price points, but because there is nearly zero marginal costs for most features the companies typically just build the top features in all the cars and then turn them off in the cheap ones. I see why BMW is doing this, but It still makes me angry.