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No, this is just wrong. Whoever came up with this theory has no idea what they’re talking about. If there’s a non-zero probability of the subscription not being

No, this is just wrong. Whoever came up with this theory has no idea what they’re talking about. If there’s a non-zero probability of the subscription not being canceled (more revenue) then yes, more revenue is good. Otherwise later revenue is bad, public or private. There is no exception to this.

listenallyall 4y ago
I think you're are looking at this with a very narrow lens. a) GM can remotely disable the car if the subscription isn't paid. So likelihood of abandonment is minimal. b) more importantly, this takes $1500 off the sticker price, making GM cars more appealing when compared to Ford, BMW, etc. People who don't buy a GM car don't buy OnStar subscriptions at all... so just increasing the volume of subscriptions is the most important metric c) 3 years/$1500 is just the minimum. People who have paid for 3 years are likely to keep paying in year 4, 5 and beyond. Totally different reaction than just starting a new monthly payment in month 37. And GM can add new features as upcharges to increase those payments in future years. d) GM can use the recurring subscription creatively to roll owners into a new GM car. Think family plans where the 2nd sub costs less, or a % of future subscription payments are credited against the cost of a new vehicle.
- the_optimist 4y ago
  Yes, obviously if you increase revenue and/or create new, valuable service opportunities, that’s more valuable. Merely changing the form of existing revenue: not valuable. Getting the same cash later: not valuable. So now we’re back at this point, which is perhaps obvious, that if you sell something with value, it could be valued by “Wall Street.” There is nothing counterintuitive or non-obvious worth pointing out here.
dfee 4y ago
You don’t know what you’re talking about. There are a bag full of other tricks. Like - increasing subscription revenue, offsetting lost subscribers.
- the_optimist 4y ago
  Wrong. If you increase revenue, that’s not the same as changing the form of the revenue (and delaying cashflow to boot). The comment suggests that the latter is more valuable. It is not.

listenallyall 4y ago

I think you're are looking at this with a very narrow lens. a) GM can remotely disable the car if the subscription isn't paid. So likelihood of abandonment is minimal. b) more importantly, this takes $1500 off the sticker price, making GM cars more appealing when compared to Ford, BMW, etc. People who don't buy a GM car don't buy OnStar subscriptions at all... so just increasing the volume of subscriptions is the most important metric c) 3 years/$1500 is just the minimum. People who have paid for 3 years are likely to keep paying in year 4, 5 and beyond. Totally different reaction than just starting a new monthly payment in month 37. And GM can add new features as upcharges to increase those payments in future years. d) GM can use the recurring subscription creatively to roll owners into a new GM car. Think family plans where the 2nd sub costs less, or a % of future subscription payments are credited against the cost of a new vehicle.

the_optimist 4y ago
Yes, obviously if you increase revenue and/or create new, valuable service opportunities, that’s more valuable. Merely changing the form of existing revenue: not valuable. Getting the same cash later: not valuable. So now we’re back at this point, which is perhaps obvious, that if you sell something with value, it could be valued by “Wall Street.” There is nothing counterintuitive or non-obvious worth pointing out here.

dfee 4y ago

You don’t know what you’re talking about. There are a bag full of other tricks. Like - increasing subscription revenue, offsetting lost subscribers.

the_optimist 4y ago
Wrong. If you increase revenue, that’s not the same as changing the form of the revenue (and delaying cashflow to boot). The comment suggests that the latter is more valuable. It is not.