19 ms·

Dear startups: I hate subscription services (2021)

• end_of_line 4y ago
  'Lifetime' one time payments end up being converted into monthly subscriptions. Always... Best example is Couchsurfing. They broke the contract. The contract is the contract.
• schnulller 4y ago
  Everybody hates subscription services. It's called generating a steady and long revenue stream and to et rid of that you will have to burn the world down.
  • chrisseaton 4y ago
    > Everybody hates subscription services. I think they're great. Continual updates, ability to cancel when I stop getting value. Some services I sign up to just for a single project.
• a_c 4y ago
  To me this article is a convoluted way of saying don't sell useless stuff. I agree. But also feels shallow.
  • paulgb 4y ago
    Kind of ironic that it’s posted to medium, a site whose business model is to consolidate personal blogs in one place and charge a subscription fee to read them.
• boffinism 4y ago
  Dear customers: we know. But our businesses are viable as subscription services, and not as one-off or ad-hoc puchase models. We know because we tried them. So we're catering to the people who are OK with buying a subscription because there are enough of them. Sorry if that doesn't suit you.
  • golergka 4y ago
    Buyers want to pay as little as possible and get as much as possible, and sellers want the opposite, on any possible market. It's silly to try and assign moral values to what is simply a conflict of interest.
  • lawgimenez 4y ago
    This is how I feel as a happy customer of Fantastical calendar. The hate is just unwarranted.
    • ChildOfChaos 4y ago
      But why is a calendar app a subscription service? That is ridiculous.
      • GekkePrutser 4y ago
        Well the calendar changes every year so that's a lot of maintenance work. /s
      • matwood 4y ago
        I think people underestimate how much maintenance work there is today. iOS alone adds features yearly that everyone expects the existing apps to support on day 1. While macos has fewer changes, same issue there. And calendars...smh. It would be great if MS and Google both followed some standard perfectly, but based on what I've seen from various calendar apps, they do not. Otherwise, the apps would not have such a hard time dealing with multiple calendars.
        • philipwhiuk 4y ago
          https://en.wikipedia.org/wiki/ICalendar https://en.wikipedia.org/wiki/ICalendar - it's pretty standardised actually.
          • matwood 4y ago
• jmyeet 4y ago
  Evernote is worth mentioning. There was a time when everyone used it but really it wasn't that special. I wonder if they had any buyout offers they rejected and now regret? I'm with the authoro on most of this. It's gym memberships, basically. The ideal customer is one who never uses the facilities but auto-renews forever. But software is an interesting exception. IMHO subscription is the best monetization model for software. Why? Because it aligns incentives between the consumer and the seller. Many people would rather pay $5/month than $150 upfront. It means the company (generally) is constantly updating and fixing it. With shrinkwrap software, there's a direct incentive to declare a new major version, sell an upgrade and stop fixing/updating the old version. Adobe used to do this with the RAW camera plugin for Photoshop. New camera came out? It was only added to a new version of the RAW plugin. That RAW plugin for no reason whatsoever required the latest version of Photoshop. The negatives about software subscriptions here are really negatives about Adobe. Adobe does use dark patterns to get renewals, only offers annual subscriptions and probably charges too much. The price here is off. You can get Photoshop/Lightroom for (IIRC) $10/month. The complete collection is $50/month. The standard counterexample here is Jetbrains. Monthly or annual billing, lots of notifications about upcoming renewals, decreasing pricing for long-term customers, reasonably priced personal licenses and you get to keep the version you had when you stop paying indefinitely. My point is that software subscriptions aren't inherently bad. Adboe is bad.
  • TheChaplain 4y ago
    Evernote isn't that bad, both me and my partner uses it frequently and I feel we got our worth. But Evernote is garbage with their API, their SDK's are rarely updated and they use odd protocol called Thrift.
    • jmyeet 4y ago
      Thrift was (and is) Facebook's answer to protocol buffers. Like protocol buffers it a language and platform independent way of storing structured data. But Thrift adds and RPC mechanism on top of that. Google had their own protocol buffers based RPC (called Stubby) that wasn't open source at the time (we're talking 10-15 years ago).
• stavros 4y ago
  I have half a mind to start a database SaaS so apps can connect to it. So, you buy your Amazing Notes phone app for $9.95 or whatever, connect it to my paid service, and you have all your syncing/backend needs on one service, paid once, instead of for every app you buy. Probably wouldn't be very popular with apps, because now they can't sell a subscription, but it's an idea.
  • cube2222 4y ago
    iCloud does that on iOS right now. Some, like Bear, still sell a subscription while using iCloud for syncing (not to bash on Bear, the price is reasonable).
• haunter 4y ago
  Rich coming from a blog that is on Medium. Once you run out of free access you have to sub. And even worse it's one of the rare subscription services where you don't even see the price on the landing page without making an account first https://medium.com/membership https://medium.com/membership
  • GekkePrutser 4y ago
    Yeah medium has become a really nasty user- hostile service :( Substack is where it's at now IMO
  • deleted 4y ago
    [deleted]
• nikanj 4y ago
  We don’t build them for you, we build them for the VCs. They love them.
• Havoc 4y ago
  I can deal with them conceptually - I just dislike how they go about things on the billing & signup side. Its usually quite darkpattern-y in vibe. See trials that switch to paid, or discounts for 1 month (heavily advertised) then extortionate rate (in fine print) after. Or easy online sign up, phone in during office hours to cancel. Or getting mercilessly hounded to re-sub after cancellation. If they just behaved a little less scummy things would be better
  • Daveenjay 4y ago
    This is one thing apple got right. I don’t have to deal with individual apps process of cancelling a subscription. If I don’t like it, I can go to the App Store and cancel it there
  • danielvaughn 4y ago
    The “phone in during office hours” technique led me to threaten a lawsuit on one occasion. I really think it should be illegal.
    • civilized 4y ago
      It just screams "we view our users as cows who must not be allowed to escape the milking apparatus".
• charcircuit 4y ago
  >Lack of customer retention. If a user pays upfront for a product, they will feel compelled to use it daily to get their money’s worth No, if anything it's the opposite since you don't want this month's payment to go to waste. Although I don't have the data, I wouldn't be surprised if consumers actually don't care that much about "getting their money's worth" for most products.
• Omavel 4y ago
  You have choice not to use them, init?
• mattjenner 4y ago
  Dear innovative people: think of a better model. 1. Free = problematic with the lack of money 2. Freemium = looks good if the balance is right 3. Ads = Mostly works but the model is flawed and skewed 4. Subscription = Love/Hate currently trendy but too relied on 5. Pay-what-you-can = Fans provide the service for everyone 6. Premium only = Only what it's worth, when it's worth 7. Enterprise = S'ok because my company/org pays for it 8. Tokenised = S'ok because the next person pays for mine... 9. Charitable / foundation = Someone more wealthy pays 10. None of the above = For now somehow it works There are probably 10 more models already, 10 more out there and 10 more coming soon. Get thinking, stop complaining.
  • xg15 4y ago
    How about good old "pay for it once, then own it"?
    • chrisseaton 4y ago
      How can you own an online service?
      • withinboredom 4y ago
        You own a license, instead of paying for a license in perpetuity.
        • shapefrog 4y ago
          And how frequently would said license be renewed? How about for maximum flexability we do a per user rolling monthly license.
          • withinboredom 4y ago
            Surprisingly, people figured this out a long time ago. When you create something substantially different from what the customer originally paid for, you sell it as something different.
• amelius 4y ago
  Dear governments, I hate that I can't unsubscribe from services without going through the provider's dark-patterns first.
  • erfgh 4y ago
    So don't subscribe to them.
    • Renaud 4y ago
      You usually don’t know the pain until you try it. The immense majority of subscription services go to great lengths to make it as easy as possible to get you on and too many go to great length to make it very hard to let you stop. We are at the point where I believe there should be regulations that forces a company to make it as easy to stop as it is to join.
    • xg15 4y ago
      But the whole point of this thread is that everything is moving to subscriptions. So... dont use any service ever then I guess?
      • prmoustache 4y ago
        That is untrue. Also you named it: service. Not everything is a service, and not all services are required. While you can't easily avoid insurances, bankings, healthcare, internet/mobile provider you can easily avoid spotify, office365, netflix, evernote or telegram or a gym subscription.
        • xg15 4y ago
          Yeah, and technically, I don't need housing either, I can just live on the street. > telegram Not if important contacts are on there. The point is, there is a clear trend. Various things we traditionally saw as "products" already morphed into services and I don't see any indication this will reverse in the near future. On the contrary, with more devices becoming connected, the trend will likely increasingly include physical devices. See BMW's experiments with requiring subscriptions to use hardware you already own. See also the whole John Deere debate from a few years ago. Etc. So while not technically impossible, it will become increasingly harder to not use services.
• Barrin92 4y ago
  One thing that subscriptions have going for them is that they're a relatively fair way to charge for products that have continuous operating and development costs. With one-off payments there's the obvious issue that you're either overcharging in case the startup (which the article talks about specifically) fails or you're severely undercharging which I think is more common if anything. Just a few days ago I noticed I still have a lifetime membership for a podcast app that I once bought for almost nothing and they still ship features. While lucky for me personally not necessarily great for either the devs or other users who joined later after they switched to subscriptions.
  • xg15 4y ago
    They also give strong incentives to only develop projects in the future that have continuous operating costs. You can see evidence of that in our general industry trends, where software is either "being worked on" or "dead", but can never be finished. That's tolerable for pure software projects, but now we're increasingly seeing the same trend with physical devices.
  • joshuak 4y ago
    A problem, however, is that subscriptions are desirable revenue streams regardless of continuous operating costs. A product I can buy for a largely concrete exchange in value, whereas subscriptions will (at best) go to value in the future that I may not have chosen to buy. I notice that you feel bad for the devs of the podcast app, but not so bad as to give them the word of mouth marketing they no doubt hopped would be the fair trade value of early lifetime memberships.
• andix 4y ago
  Most subscriptions are just way too expensive! I make good money, but I can’t afford to have 10 subscription services for 9,99 per month. I have a few for 0,99 per month.
  • chrisseaton 4y ago
    > I make good money, but I can’t afford to have 10 subscription services for 9,99 per month. So 100 a month total? Surely that's not any kind of issue if you're making good money? I get tons of value from the services I subscribe to.
    • andix 4y ago
      After paying for housing, power, food, insurance, transportation, savings, …, I have maybe 1000$ left for spending every month. I don’t want to spend 10% of it for some apps/services that save me maybe a few minutes every months, for tasks that can be also somehow achieved with the apps that came with my phone.
      • jeromegv 4y ago
        Then you’re not the target market. It’s just supply and demand. If not enough people want to pay that subscription, they will stop and change model (or shut down). But if this is sustainable enough to pay for their dev, it doesn’t look like they should cater to you as those are non critical tasks for you and they barely have any impact on your life.
        • sorrychuck 4y ago
          > Then you’re not the target market. This is correct. Most of the complaints here amount to “it’s too expensive” which like, yeah, it’s too expensive for you. So don’t buy it. (Somehow HN — on average, obviously not everyone, but the zeitgeist say — manages to at once complain about companies constantly losing money, and also about companies that charge money!)
        • andix 4y ago
• Flankk 4y ago
  I agree completely. Taking more but giving the same in return. What companies lose is brand loyalty. Startups want to be Apple but plan for sprints instead of a marathon. Spotify and Netflix work as a subscription model because the model provides more value to customers. The artists get screwed over but I digress.
• K0balt 4y ago
  We get that subscription is more lucrative. But offer an option to purchase the current version at a higher price, or use the jet brains model of new versions as subscription.
  • soylentgraham 4y ago
    We used to have purchase v1, and a cheaper upgrade to v2... but jetbrains' doesnt let you keep the upgrade if you unsubscribe? Or do you then perpetually own v2 after a year?
• codeptualize 4y ago
  I don't mind subscriptions, I actually prefer them for many things. Especially for software I rely on I want the developers to consistently earn money so they keep motivated to work on it, do maintenance and fix bugs. I don't pay for software, I pay for the thing it allows me to do. Me paying a subscription fee creates an incentive and responsibility to keep things working. If there is a backend component to its even more important as they will have continuous cost. Also the "one off" model usually means you'll pay for versions which is not always cheaper. Take Sketch for example, some of my clients use it so I had to update each year spending 99$. With subscription I could just use it for a project and cancel afterwards saving money, something I have done with Adobe software (although I find their prices way too high). If something is too expensive I will find alternatives, that has imo nothing to do with the subscription model.
  • cpach 4y ago
    Indeed. Buying an application is not necessarily like buying a wrench or a shovel.
    • tomrod 4y ago
      Used to be. Look at drivers. Usually you update those yourself. Some managed services exist, but they break often, leaving the system in an unusable state.
    • bheadmaster 4y ago
      It should be, though. We have standardized hardware and OS API/ABI. Is it really reasonable for software industry to drain so much money just because it takes some effort to write a program that won't magically rot in a few years?
      • ghaff 4y ago
        You're perfectly welcome to keep your computer and its software running in isolation until the end of time or until the hardware fails. You just shouldn't expect to be able to connect to networks that change over time or to run software on new operating systems that address newly discovered security vulnerabilities or that otherwise get updated.
• gordaco 4y ago
  I'm a very, very firm believer on not paying for "subscription" to software. New content, I can understand (I spend about 40€ monthly on several Patreons, mostly comic artists; and I have a couple news subscriptions as well), although I still hate music/tv subscriptions and I don't want Netflix, Spotify or whatever. But for software, no matter how useful it is, I just refuse to choose between an unbounded price and the possibility of losing it because I don't want to keep paying. For the record, I don't have any problems paying, say, 400€ for Mathematica and things like that (in fact, I haven't pirated anything in a very long time). But I paid once and I can use the software as much as I want without paying again. For me, it's not about the amount of money, but the peace of mind (no additional bills, no additional shit to renew when I my debit card expires, and most important, I don't need to engage in any bullshit cancellation process). In the rare cases where both a subscription and a single payment is offered, I've done the math and from time to time I actually estimate that I'll spend less money on the subscription (although normally it's the other way around, of course), but even in these cases, I prefer paying upfront. I hate that this is becoming less and less available.
  • yourMadness 4y ago
    Would you use a service that converts subscriptions into one time purchases at 20x the yearly subscription cost?
    • gordaco 4y ago
      I'm not sure that twenty times the yearly price would look like a reasonable price, but if it's software I actually want, I might agree. I would weigh that price against the functionality of the software, ignoring whether there is a subscription model. As I said, I'm not beyond paying a three-digit sum for software I like (and Mathematica is the first example that came to mind, but not the only one).
    • sorrychuck 4y ago
      Is this a thing you’ve seen? Really cool idea! I doubt many would actually use it because complainers on HN aren’t average users, and the number of months you’d have to prepay would likely be quite high to actually make it make sense for the businesses involved. But still, if you could make a business reselling monthly subs as 1-off purchases, it would be pretty dang cool!
• lazyeye 4y ago
  More and more tics wanting to attach themselves to our financial bloodstreams..
• brnt 4y ago
  Startup culture, the name already says it, is about attracting investors and huge profits. Starting a software business, the sort that used to be based on the shareware model, or one time fees, can be enough to sustain a small or one person team. But that's not enough for the startup crowd, they're looking to be millionaires.
• clement_b 4y ago
  Yes, subscriptions for everything isn't good for consumers, but, if it was 'easy' to sell software as a one off before the cloud, it's a bit harder now with all the costs associated with cloud features such as everlasting storage, security, sync, compute, you name it. How do you sell something that consumes resources continuously at a one-off cost? SaaS can only work with a continuous revenue stream because the software provider has to keep delivering the service, and doesn't know how long it will be necessary to do so. LTV predictions are based on the assumption that customers churn, but what if they don't? If you charge the LTV as a one off but got that wrong, you're out of business. With proper software, that you install on your device, you power everything, therefore one off licences can work. There is also the whole way to ship software that has to change for a shift away from subscription, but are consumers ready to wait for yearly releases and pay for these ? Are consumers ready to install software again? Not so sure!
  • cptaj 4y ago
    Yeah, please let me install software. No, I don't need your cloud.
    • paulryanrogers 4y ago
      I agree yet see the challenges too. What OS do you have? How often does it break compatibility? Once product is mature and market saturated how can business continue to exist?
  • biztos 4y ago
    A lot of the cloud stuff can be offloaded to cloud providers. It’s pretty common for apps to let you choose between local storage, iCloud, Dropbox, et al. And for compute, well, the software runs on computers? If you need more server side action than that, I think you’re selling a service in addition to your app, and then yes, you need subscription revenue. Often it’s bad idea though, I doubt you’d find many people who prefer Photoshop “cloud” to old-school Photoshop-on-a-Computer.
• fulvioterzapi 4y ago
  There are a couple of services I would love to use, but I have a strict no-subscription policy. It just gives me bad vibes, I would rather pay 24 months upfront and have the full application/service. Of course this does not matter, because the MBAs in charge showed in a PowerPoint presentation that the subscription model will squeeze 11.1% more money for customers, mostly from people who forget to unsubscribe.
• ekianjo 4y ago
  Is the author publishing this on medium to troll his point?
• alanfranz 4y ago
  One thing the article seems to miss out: price. Some subscriptions are horribly expensive. $8/month for something I’d be happy to pay $10/year. That’s the real problem. A lot of services come out at $50/$60 per year with minimal improvements over an OSS or ad-supported tool.
  • mongol 4y ago
    Very good point. I think paying for something useful let's say 5 USD one month when you use it is quite alright. But then go four months when you don't use it at all and pay 20 USD for that privilege is harder to motivate. But on the other hand, if the price was 1 USD / month it would not be such a big deal for those months, if it turns out you use it a few times per year.
  • cinntaile 4y ago
    But can a developer live off of $10/year? You would need a lot of customers, compared to a more expensive $8/month model.
    • alanfranz 4y ago
      Of course. But maybe you don’t need one million features and $500M vc investment.
      • cinntaile 4y ago
        Assuming a developer gets paid (before any taxes) $5000/month you would need 6000 customers, it's definitely possible but it's a lot harder than a monthly subscription. I have read many times that higher prices also filter out a lot of high maintenance customers.
• rvz 4y ago
  You will own nothing and you will continue to be very happy with the subscription service griftopia.
• lifeisstillgood 4y ago
  I am pretty sure there is a business that can be built over managing all these subscriptions - something like European OpenBanking but that includes credit cards - and you just get a dashboard showing you all the subscriptions you have (that will be ticket shock) and then you can turn them off as needed. Not sure if credit cards are in openbanking but that would be the core of it
  • microtonal 4y ago
    This is why we subscribe to things like Disney+ through the App Store app. On iPhone/Mac you can just get an overview of all your subscriptions and cancel them there.
• Simon_O_Rourke 4y ago
  Having worked in plenty of startups I know the critical need to have (a more than fair chance) your subscription customer is going to give you money in the future. MRR is the king of metrics, and without it most companies would be sunk. However, for guys like Netflix or for those companies that ship cooking ingredients and recipes to your door, I would happily be gouged by them for one or two on demand purchases.
• hendersoon 4y ago
  My solution is as follows: 1) I refuse to subscribe to apps, and 2) I complain about it on the internet Thanks for helping out with numero dos, friend.
• radiojasper 4y ago
  They hate subscription boxes, but surely they added an affiliate link to one said subscription box in their article and then spammed it on HN for more traction.
  • Hbruz0 4y ago
    I'm not the author ;)
• parkingrift 4y ago
  You can throw absolutely all of the blame on MBA and finance culture. Businesses routinely sell for 7-20x annual recurring revenue. However, non-recurring revenue is worth maybe 2-3x. It’s the same story with raising funds. If you need capital you can raise substantially more for substantially less if you have recurring revenue. It would be more valuable for a business owner to take a $1M non-recurring revenue business and convert it into a $500k recurring revenue business, stabilize, and then sell. If you think that’s asinine… well, you’re right. Something is deeply wrong with MBA and finance culture in America. We have truly lost our minds when it comes to valuations.
  • deleted 4y ago
    [deleted]
  • dangus 4y ago
    The thing you haven’t addressed is why this is asinine. I don’t think it’s asinine! It makes logical sense to me that recurring revenue is more valuable than non-recurring revenue.
    • parkingrift 4y ago
      I understand the why, and still completely disagree with the base reasoning. I was part of a group that made a $10M acquisition of a software company with consistent $7M in annual sales. We converted that to $4.5M in recurring revenue and sold it for $30 million 3.5 years later. I was on the executive team that flipped the business. And I find the whole thing disturbingly ridiculous. Your examples are pretty divorced from reality. What’s the fundamental difference between consistent annual sales and recurring revenue? Of course in your example the recurring revenue would be worth more, but that’s not an example from reality. At the end of the day there is finite consumer spending. Companies aren’t really making more money by shifting to recurring revenue. They’re just increasing their value because finance bros say it’s the way to increase your value.
      • deleted 4y ago
        [deleted]
• ChrisMarshallNY 4y ago
  I have come to be OK with some subscription models, but not all. I think SaaS, and even many platform applications, are OK as subs. "Buy once" platform app models are subs, anyway. It is unreasonable to expect a software developer to keep a package updated through many new operating systems. Some systems, like MS Windows (and, I suspect -but don't know for sure- Linux), do a great job of retrofitting, so older apps can often keep going, but most mobile systems won't. Apple is in the middle. It supports a ways back, but will deprecate features that older apps may require. I used to buy the Adobe CS suite, yearly. Each year, I would get an upgrade, as the software would usually get new features that I wanted. I suspect that, eventually, the version I had, would stop working, but I never let it age that long. I probably could have gotten away with reupping every two, or even three, years. I like the new sub model. I get access to every single Adobe app, at a lower price than what I paid for my yearly upgrades (but more than if I did it bi-yearly). This allows me to do something like install inDesign, if someone sends me an ID file. I don't want to keep the app around, otherwise. SaaS is basically built around a "service," and "services," by definition, are subs. If I subscribe to a newspaper, that paper hits my doorstep every weekend, until I stop paying the bill. That's an ancient model, that has not changed; nor does it need to. Hardware is another matter. I can see having a piece of hardware that could benefit from regular firmware updates, but I think it should keep running at spec, with a single firmware setup, despite new versions coming up. I'm also pretty cynical about hardware that is sold with "lifetime upgrades." It's been my experience that "lifetime," is actually only a couple of years, before the firmware stops being upgraded. As long as the device keeps working with the last firmware, then that's basically what I paid for, anyway. If the device is "time-bombed," though, that's just evil. If the device works, but uses a SaaS subscription, then I would think that the manufacturer needs to figure out how to keep supporting the device for as long as possible, and have some way to transition the device to “standalone” operation; especially if the company is going out of business, or phasing out support for the hardware. This would probably require legal backing, against corporate officers, personally, as corporations can get off the hook, fairly easily. Also, I think we should do away with "lifetime" anything. I think the expected lifespan of stuff (like firmware updates and SaaS support) should be spelled out at purchase time, and legally enforced.
• Axien 4y ago
  The problem with subscriptions is the difficulty in canceling. To join XM Radio or the Wall Street Journal is quick and easy. To cancel requires an hour long phone call navigating through high pressure sales.
• orbit7 4y ago
  I think in some cases having a core paid/free owned software is good, then paying subscriptions for extra features within it. Additionally blockchain software is new area for example holding purchased tokens providing liquidity to the software company is another model to be explored. But some software just due to the interconnected nature of it needs to be subscription based to cover the cost of running it before even getting into the ongoing development, bug fixes etc. In many cases I'd sooner pay for well maintained software than something under funded and as such not maintained. Subscriptions is opex vs capex meaning paying less than what a lot of software would be affordable to buy as a one off purchase at this point.
• kozikow 4y ago
  Dear users: but our VCs love subscription services.
• paskozdilar 4y ago
  Subscription services, in my opinion, is the pinnacle of a disposable society. Everything is ephemereal, nothing lasts, and people are dependent on their corporate overlords to bring "updates", which are often nothing more than a stream of ugly hacks working around the rotten core.
• togs 4y ago
  For software, the subscription model makes sense to me. It costs money to develop a working product, then it costs money to maintain it, and, in the case of cloud-hosted software, it costs money to serve it. The subscription model benefits the consumer because it incentivizes use of the software. For example, suppose I want to learn web design. If I subscribe to Adobe Creative Cloud, I am now committed to use it because if I do not I am wasting money. The subscription model benefits the consumer by reducing the up-front cost to use software. For example, Adobe Photoshop used to cost hundreds of dollars before use, and now it costs $20 (per month). I suggest that we, as consumers, may need to reconcile with the cost of labor.
  • paulryanrogers 4y ago
    > The subscription model benefits the consumer because it incentivizes use of the software. Is that really a benefit? I buy a hammer to meet my needs, not to incentivize myself to hammer things. Even in leisure I don't want to subscribe to my snowboard. > I suggest that we, as consumers, may need to reconcile with the cost of labor. Fair if there truly must be on going labor. But some things don't need to keep changing constantly. And if backward compatibility were taken more seriously then we wouldn't be wasting so much effort just keeping shit working.
• balderdash 4y ago
  The author alluded to it - but the pendulum will swing in the other direction as churn rates increase driven by lack of perceived value being diminished and stretch household subscription budgets
• spaceman_2020 4y ago
  Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. Like I never understood why most of these basic tools morph into 100+ people companies. A tool like Evernote can be built and maintained by under 20 people. Even at inflated salaries, your yearly burn would be under $10M. This is part of a broader trend of startup overhiring. Like Better.com had 10k employees at one point. What are those people even doing at a “startup”? This late in the startup cycle, you really need to ask why a 10k person company hasn’t IPOed and why is it still calling itself a “startup”
  • shafyy 4y ago
    > Like I never understood why most of these basic tools morph into 100+ people companies. Simple answer: They've signed a deal with the devil (VC funding) and now need to grow to make a > 1 billion dollar exit.
    • beej71 4y ago
      I've watched this happen too many times. Good companies destroyed.
    • ilrwbwrkhv 4y ago
      Vercel is going down this path now.
      • leaflets2 4y ago
        Interesting, they have 50? 60? open jobs: https://vercel.com/careers https://vercel.com/careers - I think that's a lot? Gatsby to maybe?
      • shafyy 4y ago
        Yeah I think Netlify and Shopify, too. A shame.
        • ilrwbwrkhv 4y ago
• dgudkov 4y ago
  Partly, enterprise customers are driving the shift to subscriptions. They prefer opex to capex.
• nbzso 4y ago
  SaaS model is applicable in some use cases. The VC like it, because they can give the investors comfortable idea of progressive growth and quick ROI. But I am patiently waiting to see what will be the consumer reaction when everything becomes compartmentalized and monetized to hell. Like the great ideas of geniuses in BMW headquarters:) https://www.thedrive.com/news/bmw-is-charging-a-subscription-fee-for-heated-seats-again https://www.thedrive.com/news/bmw-is-charging-a-subscription... https://www.wired.com/story/bmw-heated-seats-as-a-service-model-has-drivers-seeking-hacks/ https://www.wired.com/story/bmw-heated-seats-as-a-service-mo...
  • badtension 4y ago
    Making a subscription service out of physical products (that are there anyway) is really too crazy to wrap my head around. Why not make us pay monthly for everything? Trunk, headlights, the horn, blinkers, blinker fluid cap opener and so on. Oh wait, that's just car rental! Let's just abolish all private property and pay subscription for living, like a reverse UBI.
    • pixl97 4y ago
      VC's: keep talking dirty like that and I'll give you another billion to implement this as a service.
  • api 4y ago
    It’s not even growth or ROI. It’s that reliably recurring revenue is valued at a much higher multiple than non recurring revenue. VCs and other investors including public markets would rather see $1M ARR recurring through subscriptions with low churn than a single year with $10M revenue and no subscriptions. Even multiple years of growth in non recurring revenue will often be valued lower than less growth in subscription revenue. This is why SaaS type models have taken over and why every other business is trying to desperately shoehorn in some kind of subscription revenue. The latter gives us car companies with subscription cloud unlock services, etc.
  • woodpanel 4y ago
    BMWs test-balloon gets bad rep, but the PR kerfuffle just shows how much we're influenced by marketing, considering Tesla's offering of selling you a cheaper car that will be permanently disabled from receiving certain software enabled features and no such outcry happening at all. To play devils advocate: - it streamlines production massively - while still allowing the most affordable version to be bought - but improves product options on the secondary car market Im no fan of BMW's subscription model, but when you're leasing a car, it's effectively the same. Edit: I'd rather have the option to opt out of this pricing scheme even if it would coust me more upfront
• deleted 4y ago
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• nickjj 4y ago
  For technical learning material do you prefer a SAAS model where you pay $10-20 / month for all-in access to short isolated videos in a related subject (potentially ~4 new videos a month) or dropping $50-150 one time for a course that could be anywhere from 3-15 hours long? It's kind of comparing apples to oranges but as someone who has made courses for a while I've always thought about the idea of doing weekly screencasts instead. HN is one of the best places to ask this sort of question.
  • biztos 4y ago
    I don’t see what’s SAAS about a content subscription but yes, I prefer that. Reason being that I’m often unsure how deep I want to go in a subject, so putting up say $20/mo gives me the option of only spending $20 if during the first month I decide it’s not what I want. If you want to see a very good (IMO) implementation of this model, check out Ray Wenderlich. Lots of free stuff to show you the style. Then $20/mo or $40/mo for “pro.”
    • nickjj 4y ago
      > I don’t see what’s SAAS about a content subscription but yes, I prefer that. Yeah that's a fair point. I boiled this down to paying per month or a 1 time purchase. It was coming from a more general angle where it could be content, a product / service or heated seats which when you think about it all have different tastes. Content and a service could be classified as different. For example I don't mind the idea of paying a one time fee for a photo editor but paying per month bothers me on principle because it doesn't feel justified, which is weird because in both cases you'd want or expect updates and if you're going down this rabbit hole of paying for 1 year's worth of updates this boils down to paying per month but on a different schedule with an added bonus of controlling if you want to pay for a major update or not. Thanks for the feedback! Ray's site looks like he has hundreds of courses available, does your answer change if there's "only" ~30 standalone videos (not courses) on a specific topic with intent that more are being delivered every week? I guess the question there is at which point do you deem the catalogue large enough to pay? With one time course you at least know what you see is what you get with a possibility of there being more added over time in the form of updates.
• szastamasta 4y ago
  I really liked the old way it used to work. You bought a license for software and got only bugfixes and security patches. Every second year there was a new version released with 50-75% upgrade price for current users. I totally understand subscriptions for online services that run on provider servers/storage etc. (like Evernote) or content services where you get access to a vast database of always growing content, that you would never afford to buy at once. But stuff like Bear notes, Autodesk Fusion 360, etc. These I don’t understand. If you cannot justify a new version users want to pay for, then don’t make it. I think most users would gladly pay for new features and improvements. Just don’t make them cash cows driving your business model on fear of loss.
  • varispeed 4y ago
    > Autodesk Fusion 360 They shoehorn their cloud service and certain operations are done on their servers, which are awfully slow. It seems like they added this to justify a subscription and not to give any benefit to the user.
    • szastamasta 4y ago
      Yeah, and these services (namely renders of the designs) are still paid outside of main subscription fee. What’s worst is that these cloud services make the app worse. I want to work on a file I have on my computer, not upload it to cloud first so it works slower.
• varispeed 4y ago
  When I had a gig at a start up, I remember the owner couldn't stop banging about subscriptions. It was the main priority, how to get people to subscribe and anything else was an afterthought. The main idea was that even if people stop using the product, a good % will forget to unsubscribe. I remember something like 30% of users were people who subscribed, used the product for a month or so and then never unsubscribed.
• Existenceblinks 4y ago
  Unrelated: Dear customers: I hate demanding of free plan, self-host and open source. My family is starving.
• gizmo 4y ago
  The VC model is to blame, I think. The default VC calculation goes something like this. $100 million fund invested in 20 companies at $5 each. 18 or so go bust, break-even, get acquihired. The remaining two return maybe $100m each after 10 years. With this outcome the VC fund has a meager return, barely outperforms the S&P on a risk-adjusted basis. What VCs are really looking for are big multibillion dollar exits. And you can't get there by selling $50 perpetual usage licenses to consumers. It's a real shame, because most software I use can be written by a handful of good engineers in a couple of years. You can make great software that stands the test of time this way. But businesses that operate this way are not investible. And they now have to compete with free products dumped on the market by goliaths such as MS and Apple, and with free products made by venture backed companies that just want to gobble up market share, aiming for a monetizable monopoly down the road.
  • civilized 4y ago
    Sounds like VCs are going to have to either live with lower returns or get much, much better at picking winners.
  • malloryerik 4y ago
    > It's a real shame, because most software I use can be written by a handful of good engineers in a couple of years. And what if the engineers bootstrap instead of taking VC lucre?
    • cercatrova 4y ago
      Then they should be even more amenable to offering subscriptions. Unlike VCs, bootstrappers can't afford to sell only one time licenses to their products, especially at a sub 10 dollar price.
• civilized 4y ago
  I assumed everything was going to SaaS hell and was pleasantly surprised to find I could still buy Microsoft Office when I recently got a new Mac. Office for Mac wasn't great, especially in 2008 when I first got it, but it still gave me a good 13 years of use. Given a purchase price of $200 and a subscription price of $65/year for Office365, I'm very confident I get a better deal with the one-time purchase, even though I know I will probably eventually need to purchase again. (The fact that I don't get low quality add-ons like OneDrive is an added bonus.) Constant maintenance of software is overrated. Most features being added these days bring negative value.
• BonoboIO 4y ago
  I don't know anybody who pays for adobe products beside some professional photographers/artists. The support is nonexistent and their pricing is consumer unfriendly. You can only make yearly subscriptions and even the student prices are high. Acrobat for 180€ a year and it crashes one in 10 times when I convert some things and takes all the edits with it to the grave. Ridiculous.
  • njsubedi 4y ago
    We’re a small game studio and we pay for all adobe products ($84/mo/user). It’s an underestimation that people don’t pay for Adobe products. No other offerings match their products, and Acrobat is something that we rarely use. Other products work perfectly.
    • wink 4y ago
      If you're a small game studio I guess you're very much included in the professional artist category. Hell, back when we were slicing up templates to use in table-based layout I used photoshop every day and even being a 100% web developer I would put myself in that category.. not artist, but professional user ;)
  • vladvasiliu 4y ago
    I do, and I'm not a professional photographer/artist by any measure. I pay for the "photography bundle", which is Lightroom + Photoshop + some cloud storage (which I don't use). Before the subscription-based model, these two would cost some 8-900 euros. At 12 € a month and 800 € for the bundle, that's 66 months to break even, or 5.5 years. Sure, you could use the same version for 20 years if you wanted. It probably works on Windows, but probably not on the mac, what with the CPU architectures changing. And there have been improvements that I, as an amateur photographer, am happy to have. For example the new automatic selection that landed a year or two ago in Photoshop. Could the same be achieved by a skilled professional with the path tool? Probably, and maybe even better. But I'm not that professional, and I don't want to sink hours and hours into this. To me that's actually a pretty good deal. Now, you could argue that the product isn't worth it because X is better. But that's a totally different argument.
• dangus 4y ago
  The author hates subscription services, but the author doesn’t fit the ideal customer profile. Someone who only pays for something once isn’t a customer that any company should want to attract in the first place, especially when you consider marketing costs. The author would pay the LTV or even more, but the author is in the minority. Most people would pay some small amount of money once and then happily never pay another dime. They don’t drop hundreds of dollars on their LTV. The author used Adobe as an example, and that’s where I should point out that it was one of the most pirated pieces of software on the market. SaaS basically eliminates that issue entirely. Also, most consumers budget on a monthly basis. Ten bucks a month is easier to swallow than $150 all at once for a permanent copy of something like Microsoft Office. For businesses, they were buying support contracts anyway, SaaS makes even more sense for them. So, yes, that’s why everyone is SaaS. These businesses that operate on the model know it’s successful and more lucrative than one-time sales. You might hate it, but the balance sheet doesn’t.
• civilized 4y ago
  One reason to hate on subscriptions: I can't tell what the hell is charging me and why from my credit card and bank records. What is AVUT**aidurhbwkansj and why did it charge me $19.99? Sometimes I have to guess based on the transaction amount. Do these businesses want me to find out who's charging me by doing a chargeback and seeing who gets mad? Can there be some better standards for how transactions are documented in financial records?
  • nunez 4y ago
    privacy.com perfectly solves this They abide by KYC so not good for true privacy, but they are very very good at containerizing your recurring expenses
• hnarn 4y ago
  I have no problem understanding the logic behind it but I really hate being forced into a subscription only to cancel it immediately to get what I actually wanted: one month. If your customers only want one month, sell them one month and be done with it. If you’re selling something good, it will be missed, and if you’re not maybe try doing that instead of building a business on the hope that customers will forget about you.
• lewisjoe 4y ago
  This boils down to simple economics. Most softwares built by startups run over the cloud (which incur recurring costs to the startup) and most softwares are not just a one-time delivered unit like a physical object. They need patches and continuous improvements, which means it needs a supply of human intellect (which is again a recurring cost in terms of salaries) The challenge is how would you reconcile this underlying costs with a one-time-payment? It's a tougher problem than it seems, if yoy include other variables in the equation like inflation, volatile nature of softwares , etc. Nonetheless, this has to be solved. I strongly believe a simple pricing model that makes instant sense - is an important part of the UX. And a one-time payment like buying a physical product is the simplest of all.
• yummybear 4y ago
  How do you feel about a non-renewable subscription, i.e. pay for 12 months access, and then having to re-pay at the end of the cycle to restore access?
• irrational 4y ago
  Yeah, this whole subscription thing sucks. I refuse to engage. The only thing I have a subscription to is Disney+ because the wife wants it for the kids. I have no other software or service or device subscriptions. If nobody has a pay once option I do without.
• cercatrova 4y ago
  As a bootstrapped developer though, I love subscriptions. They offer consistent and predictable cashflow with which I can hire other developers and employees. A one time purchase, unless you have data [0] on how it's going, is less predictable. [0] https://remoteok.com/open https://remoteok.com/open
• archagon 4y ago
  Eventually, I imagine that open source alternatives to subscription productivity/creative software will get good enough (see Blender) that customers held hostage by these companies will migrate over en masse. Personally, I find most of these subscriptions offensive, so I gladly look forward to this future.
• hammyhavoc 4y ago
  Offer me self-hostable licenses. Simple as that. Offer everyone else the cloud with a subscription by default. The per-seat subscription model for a lot of these services doesn't make any sense when you own the hardware already, or can roll it out in the cloud and only pay for what you use with elastic models.
• tgsovlerkhgsel 4y ago
  I think the simple reason why we have so many subscription-only services is that few people would buy it at the LTVs that these companies hope to (and often do successfully) extract via the subscription. And people who see through it hate it because they realize how ridiculous the actual price is.
• fairity 4y ago
  This article is a very long rant that ultimately doesn’t make any useful claims. Of course subscription models aren’t for every business. Of course customers would prefer to not have to subscribe. What’s your point? If you’re saying that subscription is a bad decision for the products referenced in your article, I’m afraid that you’re almost definitely wrong. These big businesses have tested their pricing models and know that subscription maximizes LTV per prospective customer, which is ultimately what matters to them.
• dt3ft 4y ago
  Software is expensive to make. It can take years to build and if the price tag resembled true cost of software, very few would be ready to pay the full price. Subscription makes software available to the masses.
  • senttoschool 4y ago
    This. Maybe people forgot about the days of having to buy software one-time for $59.99 and then have to buy a new version if you want the latest. Today, you can probably get that same service for $10/month and you're continuously getting updates. Subscriptions make more sense for both users and businesses. It's not like you can fire the entire product team once you finish shipping a version of the product. And for users, the upfront cost is less and you're getting updates more frequently. You can also cancel if the service isn't what you expected. The power swings in the favor of the user more. At the end of the day, it's all about life-time value anyways. Selling two copies of your software for $120 total is the same revenue as selling $10 subscriptions for 12 months.
    • squiffsquiff 4y ago
      There's also the manufacturers' side of this equation. If you have lifetime purchase versions, users will expect a period of support that will probably be longer than the cadence between new releases. As a result you wind up supporting multiple versions of your software, as famously happened with Microsoft's Windows and office franchises
    • marssaxman 4y ago
      > Today, you can probably get that same service for $10/month and you're continuously getting updates. I remember when you could buy software, learn it, and use it effectively, without having constant habit-breaking changes stuffed down your throat. I remember when you owned your data and didn't have to rent it from a service provider. I remember what it was like to trust my machine, because everything was happening locally and software wasn't phoning home.
  • Bancakes 4y ago
    Then most people wouldn't be purchasing name-brand AAA software and would likely settle for FOSS or indie apps. Even better, you wouldn't be expected to be using said commercial solutions. Subscriptions incentivize selling programs that are in a perpetual unfinished state. We lost the opportunity to call a project "feature-complete". LZMA2, H264, and RSA/AES were developed years ago, yet 7zip, netflix, and ssh still need regular updates for some nonsensical reason.
• atoav 4y ago
  Not every service, not every software lends itself to the subscription system. E.g. if you sell an obscure format converter that I need once every year (but then I really need it) it should not be an subscription. I would gladly toss 20 Euros at the developer for something like this once. What I will not do is do any subscription, just because it takes up space in my mind perpetually.
• skilled 4y ago
  You know what I hate even more… it’s limits to subscription models. This year Ahrefs, a popular marketing tool that indexes the web, changed their pricing model to impose a strict 3,000 token limit on report generation. That limit used to be 1,500 and reset on a weekly basis. This is for the $200/month plan. Now if you “accidentally” use all 3,000 reports you are essentially locked out of the platform, like I was. What that means is that you can no longer use the export feature, which left me with a million+ unused rows. I had been their customer before, and I was told they did send out an email about the new changes (just not to people who weren’t active subscribers), and their official blog post was very sparse on appropriate wording that the report limit was changed so drastically. Was it my fault in the end? In more than one way, yes. But does that make me hate this approach less? Not in the slightest.
• arnklint 4y ago
  How come you published this article on a subscription based service?
• nunez 4y ago
  > They don’t want to see another monthly number chipping away at their bank balances month after month, year after year. They don't? My uneducated take? - People won't buy anything full boat that they can buy monthly - People prefer monthly payments - People don't actually track their monthly payments, because generally people are bad at money stuff It's not an accident that BNPL companies like Affirm and apparently Apple now are mooning right now Personally? I really like software subscriptions. They are zero commitment, auto-updating, and usually a good value relative to the price. When I'm done with them, I stop paying. Easy. Amazon Subscribe and Save is a perfect example. The items I get that I'd usually skip on getting until I absolutely had to (because work and life get in the way) come in bulk every three to six months when I need them. That's incredibly valuable for me. Most of y'all who are for paying full boat are speaking from a privileged position where full boat isn't much. For a lot of people, Office 365 with Word, Excel and PowerPoint for $6.99/mo is a much more achieveable than the $99 for a single version with feature-toggled restrictions (and better than dealing with cracks). Then again, I think that ownership in general is overrated, so I realize that I'm a contrarian on this