9 ms·

I think the problem is that people are overestimating the benefits of subscriptions. Yes, subscriptions make recurring revenue. But so does pay-once software,

by yarcob 6y ago

I think the problem is that people are overestimating the benefits of subscriptions. Yes, subscriptions make recurring revenue. But so does pay-once software, as long as you don't stop getting new users. But your SaaS subscribers also churn, so you can't stop getting new customers there either. Pay-once has the huge advantage that the barrier to entry is much lower. I'm pretty sure that it's much easier to sell a 50€ app than a 10€ subscription. And that 10€ subscription means you need to keep your customers for at least 5 months. If they don't need your app anymore for some reason before that, you would have made more with the pay once app. I mean, if you have recurring costs per user, please go for a subscription. But folks shouldn't assume that pay once is unsustainable. You just get the full lifetime value of the customer up front and you don't have to worry about them churning!

Xamayon 6y ago
>I'm pretty sure that it's much easier to sell a 50€ app than a 10€ subscription. Very much this for me, I will go to great lengths to avoid using software with subscription fees. For example, I was fine with paying several thousand for the Adobe suite and upgrades in CS4-6.5 days but no way will I pay $50/month for the same software. The cost may be less upfront but I have an easier time justifying a single one time purchase than a continual unending string of fees. I don't use the software enough to justify the expense month after month so seeing the bill again and again wears on me until I cancel.
samatman 6y ago
There is a hidden problem here, which is app store policy (all of them, afaik). Setting up a subscription? Easy. Selling software once.. and just once? Also easy. But if you want to follow the classic version model, where users pay for upgrades? Now you have problems. The app stores see a new version as a completely new piece of software, so you have to build up reputation for it from the ground up, and if you want to overlap the old and new version for awhile, which is usually a good idea, you run the risk of people buying the old one by accident and getting mad at you. It's just not a use case which is supported anymore, and it should be.
- phowat 6y ago
  This, a million times this! The app stores made the most sensible model extremely cumberstone! I want to buy a software and own it forever. On the other hand, forcing the developer to provide upgrades for free forever is not sustainable. Maybe there is a clever way to work around this issue using in app purchases ...
  - yarcob 6y ago
    You are overthinking it. A lot of software just doesn't need elaborate updates. For one utility app that I sell, I just build a new version every couple of years when it's no longer compatible with the latest OS, and people still buy it. There really is no need for updates for some apps. If there is demand for updates (eg. because customers want new features), then you can just sell it as a new app. People who want to upgrade can get the new version. And people who are happy with the old version can just continue using that. The folks who complain that they can't sell yearly updates on the app store are basically just trying to sell subscriptions without calling them subscriptions. They should just sell their apps as a subscription instead. It's not really pay-once if users have to buy an upgrade every year.
    - kelnos 6y ago
      I don't think that's really the same concept, though. Yes, a utility app might be "done" at some point and only need updates when the App Store requires you to build against a newer iOS SDK. Fine. But many apps go through large changes over time and accumulate large improvements that might be worth paying more for. Selling a new major version as a new app is a clumsy experience for users. They need to find the new app, install it, somehow transfer all the data and settings from the old app to the new, and then delete the old app. Most of that isn't something the app author can automate or do for the user. I agree that some people might "abuse" this sort of functionality to sell subscriptions without selling subscriptions. But so what? Under this imaginary App Store upgrade flow, the user could also choose to keep using the old version and not upgrade. That gives the user more choices, not less.
hombre_fatal 6y ago
> Pay-once has the huge advantage that the barrier to entry is much lower. I'm pretty sure that it's much easier to sell a 50€ app than a 10€ subscription. I think you've got it backwards. I can't think of many examples that suggest that this is true. The iOS app store is a very hard place to sell an expensive $50 app, yet it's a very easy place to sell 7-day trials that turn into $10/month subscriptions. Immediate cash outlays are always harder to sell than pay-over-time deals for various reasons. One reason being the customer's attempt to avoid the feeling of overspend: that you can always stop subscribing when you're done rather than getting "stuck" with the product, even if the one-time cost is a better deal. Another reason just being that you're asking for less money upfront which is always easier. In my own experience, people will even stick with a pricier monthly billing option over the yearly billing option just to avoid the larger hit, even when they've been a customer for five years and know they'll still be subscribing a year from now. I certainly appreciate how us HNers might prefer a one-time cost over a subscription, but I wouldn't try to generalize that to customer behavior.
kybernetikos 6y ago
> I mean, if you have recurring costs per user, please go for a subscription. I sometimes see software that is running 'in the cloud' for no discernable reason. Yes, those companies have recurring costs per user, but that's entirely their choice, the more natural way of writing a simple file transformation tool is as an application, not a webpage.

by yarcob 6y ago

Xamayon 6y ago

>I'm pretty sure that it's much easier to sell a 50€ app than a 10€ subscription. Very much this for me, I will go to great lengths to avoid using software with subscription fees. For example, I was fine with paying several thousand for the Adobe suite and upgrades in CS4-6.5 days but no way will I pay $50/month for the same software. The cost may be less upfront but I have an easier time justifying a single one time purchase than a continual unending string of fees. I don't use the software enough to justify the expense month after month so seeing the bill again and again wears on me until I cancel.

samatman 6y ago

There is a hidden problem here, which is app store policy (all of them, afaik). Setting up a subscription? Easy. Selling software once.. and just once? Also easy. But if you want to follow the classic version model, where users pay for upgrades? Now you have problems. The app stores see a new version as a completely new piece of software, so you have to build up reputation for it from the ground up, and if you want to overlap the old and new version for awhile, which is usually a good idea, you run the risk of people buying the old one by accident and getting mad at you. It's just not a use case which is supported anymore, and it should be.

phowat 6y ago
This, a million times this! The app stores made the most sensible model extremely cumberstone! I want to buy a software and own it forever. On the other hand, forcing the developer to provide upgrades for free forever is not sustainable. Maybe there is a clever way to work around this issue using in app purchases ...
- yarcob 6y ago
  You are overthinking it. A lot of software just doesn't need elaborate updates. For one utility app that I sell, I just build a new version every couple of years when it's no longer compatible with the latest OS, and people still buy it. There really is no need for updates for some apps. If there is demand for updates (eg. because customers want new features), then you can just sell it as a new app. People who want to upgrade can get the new version. And people who are happy with the old version can just continue using that. The folks who complain that they can't sell yearly updates on the app store are basically just trying to sell subscriptions without calling them subscriptions. They should just sell their apps as a subscription instead. It's not really pay-once if users have to buy an upgrade every year.
  - kelnos 6y ago
    I don't think that's really the same concept, though. Yes, a utility app might be "done" at some point and only need updates when the App Store requires you to build against a newer iOS SDK. Fine. But many apps go through large changes over time and accumulate large improvements that might be worth paying more for. Selling a new major version as a new app is a clumsy experience for users. They need to find the new app, install it, somehow transfer all the data and settings from the old app to the new, and then delete the old app. Most of that isn't something the app author can automate or do for the user. I agree that some people might "abuse" this sort of functionality to sell subscriptions without selling subscriptions. But so what? Under this imaginary App Store upgrade flow, the user could also choose to keep using the old version and not upgrade. That gives the user more choices, not less.

hombre_fatal 6y ago

> Pay-once has the huge advantage that the barrier to entry is much lower. I'm pretty sure that it's much easier to sell a 50€ app than a 10€ subscription. I think you've got it backwards. I can't think of many examples that suggest that this is true. The iOS app store is a very hard place to sell an expensive $50 app, yet it's a very easy place to sell 7-day trials that turn into $10/month subscriptions. Immediate cash outlays are always harder to sell than pay-over-time deals for various reasons. One reason being the customer's attempt to avoid the feeling of overspend: that you can always stop subscribing when you're done rather than getting "stuck" with the product, even if the one-time cost is a better deal. Another reason just being that you're asking for less money upfront which is always easier. In my own experience, people will even stick with a pricier monthly billing option over the yearly billing option just to avoid the larger hit, even when they've been a customer for five years and know they'll still be subscribing a year from now. I certainly appreciate how us HNers might prefer a one-time cost over a subscription, but I wouldn't try to generalize that to customer behavior.

kybernetikos 6y ago

> I mean, if you have recurring costs per user, please go for a subscription. I sometimes see software that is running 'in the cloud' for no discernable reason. Yes, those companies have recurring costs per user, but that's entirely their choice, the more natural way of writing a simple file transformation tool is as an application, not a webpage.