6 ms·

The right way to sell subscriptions is for services that actually incur ongoing costs for the company. Charging a subscription for hardware and software already

The right way to sell subscriptions is for services that actually incur ongoing costs for the company. Charging a subscription for hardware and software already built into the car, and not dependent on any external servers or anything is just plain anti-consumer. There are plenty of services BMW can charge for that people will happily pay, like remote start, remote monitoring etc.

gruez 3y ago
>Charging a subscription for hardware and software already built into the car, and not dependent on any external servers or anything is just plain anti-consumer. What's the principle here? That because it already exists, consumers don't have to pay for it? How far can we stretch this? Suppose there's a streaming service (eg. netflix or spotify) that supports downloads, does that it's "anti-consumer" to deny them access to the audio/video files because it's already on their device, and the cost to produce it has already been paid for? Moreover, is there anything fundamentally different between paying $2000 (one time) for a heated seat upgrade, and $200/year for 10 years (or whatever the expected life of a car is)?
- justapassenger 3y ago
  > Moreover, is there anything fundamentally different between paying $2000 (one time) for a heated seat upgrade, and $200/year for 10 years (or whatever the expected life of a car is)? Yes, it’s extremely different. You own it vs you lease it.
  - chrisdhoover 3y ago
    Recurring monthly revenue is something a business really wants. It smoothes their cash flow, so yes there is a difference.
- thfuran 3y ago
  But it's not a payment plan, it's a subscription. If you drive the car for 25 years, you're still on the hook every year if you want the seats to heat.
  - gnicholas 3y ago
    BMW maintained the one-time purchase option. The subscription was added for people who only wanted to pay intermittently (or who were buying a BMW new, but somehow didn't have the $500 to pay for heated seats upfront).
    - thfuran 3y ago
      That there exists an alternative doesn't make the subscription better.
      - gnicholas 3y ago
        I would heartily disagree. When I go to buy some software, which I purchase via one-time purchase, I do not care one bit that they also offer a subscription. If the subscription is a ripoff, then those customers are effectively subsidizing my purchase. And if it's a great deal, then maybe I should consider subscribing instead of paying a lump sum. Either way, I'm not hurt by the additional payment option existing.
      - gruez 3y ago
        Are you equally upset about the fact that you can get a "subscription" to a car (ie. renting or leasing it) in addition to buying it outright?
        thfuran 3y ago
        That's not really the same thing, but regardless, the fact that a car can be purchased wouldn't make an expensive lease more attractive.
        gruez 3y ago
        >That's not really the same thing How so? >the fact that a car can be purchased wouldn't make an expensive lease more attractive. Yet plenty of people lease their cars.
- deleted 3y ago
  [deleted]
- m01 3y ago
  Regarding the last question - yes. If you sell the car the add-on stays there for the next buyer. If the car lasts longer than 10 years you pay less overall. If some online validation thing stops working you don't lose access to the feature. Prices can't and don't need to be changed afterwards, not even if e.g. taxes, card fees or similar change. Etc. Opinions my own. EDIT: typo.
- lq9AJ8yrfs 3y ago
  The principle is the seller appropriating for themselves a value-driver that was previously part of the consumer surplus, without offering to exchange something of commensurate and enduring or time-series value in proportion to the time series of payments. It reeks of friction and parlor tricks to get you to miscalculate the cost / benefit situation. Compare to a "land grab" or "rent-seeking" behavior. Also compare to "financing". It may be economically efficient to establish bargaining over the value but it matters asymmetrically to the parties to the transaction who is assigned property rights and who is renting.
  - gruez 3y ago
    >The principle is the seller appropriating for themselves a value-driver that was previously part of the consumer surplus Were heated seats previously free? I don't shop luxury cars, but heated seats on regular cars are definitely a premium trim feature.
- ryandrake 3y ago
  Here's the extreme example I always reach for: Imagine BMW decides that it's cheaper for them to just make all 4 seat sedans instead of having some 2 seat models and some 4 seat models. They instead tell customers: "You're buying a 2-seater. You need to pay a $X/month 'sedan fee' to be allowed to sit in the rear seats." Would this be acceptable to many people? Of course not, and for the same reason that subscriptions for other things that are already part of your car should also be unacceptable.
  - gruez 3y ago
    >Would this be acceptable to many people? Of course not I disagree. This literally happens for CPUs, and people don't seem to get angry at it. There might be different models of CPUs sold that use the same die and come off the same manufacturing line. The only difference is that cores are disabled/fuesd off and/or clock speeds are lowered.
    - josephcsible 3y ago
      In CPUs, there's at least a legitimate reason: reducing wastage by, e.g., selling what was intended to be a quad-core but had two defective cores as a dual-core instead of throwing it away.
      - gruez 3y ago
        That's only partially true though. Back in the day you could "unlock" cores in some AMD CPUs, which indicated that they were perfectly functional. Nowadays they disable the cores in a more robust way, but I doubt every disabled core is non-functional.
  - Etrnl_President 3y ago
    Rear seatbelts won't work unless you subscribe, so this is a road safety issue, with government fining you for passengers…
branon 3y ago
Not remote start. Plenty of remote start units are standalone, install into the vehicle and operate offline using their own dedicated fobs. Subaru sells first-party remote start units which operate this way. They also have a subscription service that offers remote start, but make no mistake: if your carmaker ONLY allows remote start with a subscription and won't install a standalone unit, you are being had.
- bluGill 3y ago
  More importantly if i'm not 'close' to my car I don't want it to start accidentally. I've already started my car while it was the garrage and I was.sitting in my favorite chair with no intent to go anywhere.
thumbsup-_- 3y ago
Even a case can be made for not charging for software maintenance and upgrades since the customer has already paid for that cost while buying the device (or just include it in the device cost). Take Apple as an example. Software upgrades are free. It actually works in their benefit to give free software since they don't need to be backwards compatible for decade(s). Charging for actual recurring fee services like data makes sense though.
- WalterBright 3y ago
  I was forced to upgrade my 2015 iPhone because apps started "winking out", one at a time. No error message, they just wouldn't open anymore. It was surely the automatic free upgrades to the OS and the apps that broke them. I was surprised, though, that it would "upgrade" my phone to apps that wouldn't work anymore and didn't bother to say it wouldn't work. Bought a new phone, transferred my setup over, and they started working again.
  - thumbsup-_- 3y ago
    Yes that is also a problem. The best software is the one which is stable and isolated entirely such that no dependencies change and is also never upgraded. Nothing usually breaks in it. As an owner you buy the entire package hardware + software in its stable form and you can keep it running as long as you want. With new cars, what I dread the most is scenario where something breaks after an upgrade, especially after car is out of warranty. Would that mean I need to get an expensive repair, or an entirely new car just because my 5yr old hardware isn't compatible with latest software? I want a car which is reliable enough (including the software) to run as long as I want to keep it even if it's decades. May be keeping cars for decades is about to become a distant reality
Workaccount2 3y ago
Step one: Rush underdevelop product to market so its ridden with bugs and security flaws. Step two: Charge subscription fee to get paid to finish developing product Step three: Add useless features and do confusing redesigns to justify subscriptions Step four: "Subscriptions are necessary to cover ongoing costs"

gruez 3y ago

>Charging a subscription for hardware and software already built into the car, and not dependent on any external servers or anything is just plain anti-consumer. What's the principle here? That because it already exists, consumers don't have to pay for it? How far can we stretch this? Suppose there's a streaming service (eg. netflix or spotify) that supports downloads, does that it's "anti-consumer" to deny them access to the audio/video files because it's already on their device, and the cost to produce it has already been paid for? Moreover, is there anything fundamentally different between paying $2000 (one time) for a heated seat upgrade, and $200/year for 10 years (or whatever the expected life of a car is)?

justapassenger 3y ago
> Moreover, is there anything fundamentally different between paying $2000 (one time) for a heated seat upgrade, and $200/year for 10 years (or whatever the expected life of a car is)? Yes, it’s extremely different. You own it vs you lease it.
- chrisdhoover 3y ago
  Recurring monthly revenue is something a business really wants. It smoothes their cash flow, so yes there is a difference.
thfuran 3y ago
But it's not a payment plan, it's a subscription. If you drive the car for 25 years, you're still on the hook every year if you want the seats to heat.
- gnicholas 3y ago
  BMW maintained the one-time purchase option. The subscription was added for people who only wanted to pay intermittently (or who were buying a BMW new, but somehow didn't have the $500 to pay for heated seats upfront).
  - thfuran 3y ago
    That there exists an alternative doesn't make the subscription better.
    - gnicholas 3y ago
      I would heartily disagree. When I go to buy some software, which I purchase via one-time purchase, I do not care one bit that they also offer a subscription. If the subscription is a ripoff, then those customers are effectively subsidizing my purchase. And if it's a great deal, then maybe I should consider subscribing instead of paying a lump sum. Either way, I'm not hurt by the additional payment option existing.
    - gruez 3y ago
      Are you equally upset about the fact that you can get a "subscription" to a car (ie. renting or leasing it) in addition to buying it outright?
      - thfuran 3y ago
        That's not really the same thing, but regardless, the fact that a car can be purchased wouldn't make an expensive lease more attractive.
        gruez 3y ago
        >That's not really the same thing How so? >the fact that a car can be purchased wouldn't make an expensive lease more attractive. Yet plenty of people lease their cars.
deleted 3y ago
[deleted]
m01 3y ago
Regarding the last question - yes. If you sell the car the add-on stays there for the next buyer. If the car lasts longer than 10 years you pay less overall. If some online validation thing stops working you don't lose access to the feature. Prices can't and don't need to be changed afterwards, not even if e.g. taxes, card fees or similar change. Etc. Opinions my own. EDIT: typo.
lq9AJ8yrfs 3y ago
The principle is the seller appropriating for themselves a value-driver that was previously part of the consumer surplus, without offering to exchange something of commensurate and enduring or time-series value in proportion to the time series of payments. It reeks of friction and parlor tricks to get you to miscalculate the cost / benefit situation. Compare to a "land grab" or "rent-seeking" behavior. Also compare to "financing". It may be economically efficient to establish bargaining over the value but it matters asymmetrically to the parties to the transaction who is assigned property rights and who is renting.
- gruez 3y ago
  >The principle is the seller appropriating for themselves a value-driver that was previously part of the consumer surplus Were heated seats previously free? I don't shop luxury cars, but heated seats on regular cars are definitely a premium trim feature.
ryandrake 3y ago
Here's the extreme example I always reach for: Imagine BMW decides that it's cheaper for them to just make all 4 seat sedans instead of having some 2 seat models and some 4 seat models. They instead tell customers: "You're buying a 2-seater. You need to pay a $X/month 'sedan fee' to be allowed to sit in the rear seats." Would this be acceptable to many people? Of course not, and for the same reason that subscriptions for other things that are already part of your car should also be unacceptable.
- gruez 3y ago
  >Would this be acceptable to many people? Of course not I disagree. This literally happens for CPUs, and people don't seem to get angry at it. There might be different models of CPUs sold that use the same die and come off the same manufacturing line. The only difference is that cores are disabled/fuesd off and/or clock speeds are lowered.
  - josephcsible 3y ago
    In CPUs, there's at least a legitimate reason: reducing wastage by, e.g., selling what was intended to be a quad-core but had two defective cores as a dual-core instead of throwing it away.
    - gruez 3y ago
      That's only partially true though. Back in the day you could "unlock" cores in some AMD CPUs, which indicated that they were perfectly functional. Nowadays they disable the cores in a more robust way, but I doubt every disabled core is non-functional.
- Etrnl_President 3y ago
  Rear seatbelts won't work unless you subscribe, so this is a road safety issue, with government fining you for passengers…

branon 3y ago

Not remote start. Plenty of remote start units are standalone, install into the vehicle and operate offline using their own dedicated fobs. Subaru sells first-party remote start units which operate this way. They also have a subscription service that offers remote start, but make no mistake: if your carmaker ONLY allows remote start with a subscription and won't install a standalone unit, you are being had.

bluGill 3y ago
More importantly if i'm not 'close' to my car I don't want it to start accidentally. I've already started my car while it was the garrage and I was.sitting in my favorite chair with no intent to go anywhere.

thumbsup-_- 3y ago

Even a case can be made for not charging for software maintenance and upgrades since the customer has already paid for that cost while buying the device (or just include it in the device cost). Take Apple as an example. Software upgrades are free. It actually works in their benefit to give free software since they don't need to be backwards compatible for decade(s). Charging for actual recurring fee services like data makes sense though.

WalterBright 3y ago
I was forced to upgrade my 2015 iPhone because apps started "winking out", one at a time. No error message, they just wouldn't open anymore. It was surely the automatic free upgrades to the OS and the apps that broke them. I was surprised, though, that it would "upgrade" my phone to apps that wouldn't work anymore and didn't bother to say it wouldn't work. Bought a new phone, transferred my setup over, and they started working again.
- thumbsup-_- 3y ago
  Yes that is also a problem. The best software is the one which is stable and isolated entirely such that no dependencies change and is also never upgraded. Nothing usually breaks in it. As an owner you buy the entire package hardware + software in its stable form and you can keep it running as long as you want. With new cars, what I dread the most is scenario where something breaks after an upgrade, especially after car is out of warranty. Would that mean I need to get an expensive repair, or an entirely new car just because my 5yr old hardware isn't compatible with latest software? I want a car which is reliable enough (including the software) to run as long as I want to keep it even if it's decades. May be keeping cars for decades is about to become a distant reality

Workaccount2 3y ago

Step one: Rush underdevelop product to market so its ridden with bugs and security flaws. Step two: Charge subscription fee to get paid to finish developing product Step three: Add useless features and do confusing redesigns to justify subscriptions Step four: "Subscriptions are necessary to cover ongoing costs"