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Companies love subscription based services. I have to assume it's becauce they're much more lucrative. But many times companies forget the other part: what valu

by chrsw 2y ago

Companies love subscription based services. I have to assume it's becauce they're much more lucrative. But many times companies forget the other part: what value are they providing? Telling me I now have to subscribe to something I'm using to owning isn't going to work, or shouldn't work.

ranger_danger 2y ago
The problem is it does work, a lot, and not enough people push back to hurt their sales, versus the number of people that just pay it, or weren't going to use the feature anyway. Same thing with all the data collection and privacy violations of many other companies as of late. They keep doing it because it's not hurting their bottom line. I think tech people often forget that we are not their target audience.
- giobox 2y ago
  > The problem is it does work, a lot, and not enough people push back to hurt their sales All the evidence in the car industry to date I've seen appears to show charging subscriptions for hardware functions that were previously free or included from factory with no ongoing cost tends to back fire - BMW famously first tried a few years ago to make heated seats subscription based, and has fully backtracked etc. > https://www.autocar.co.uk/car-news/new-cars/bmw-will-not-charge-extra-activate-existing-functions-cars https://www.autocar.co.uk/car-news/new-cars/bmw-will-not-cha... "We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high. People feel that they paid double – which was actually not true, but perception is reality, I always say. So that was the reason we stopped that." Remote start, widely available as a free to use feature in many Mazda models to date, falls in the same bucket really. If BMW can't make it work at the premium ends of the market, difficult to see Mazda doing it either.
  - beepboopboop 2y ago
    > People feel that they paid double – which was actually not true, but perception is reality, I always say. Do you have any ideas on why the double cost is not true? Maybe manufacturing efficiencies make it cheaper to install the parts despite whether the customer paid for the upgrade?
    - ProfessorLayton 2y ago
      It's likely just economies of scale, similar to how almost all cars, even the cheapest ones, have electric windows. It's cheaper to include them in all model tiers than to keep a separate SKU for roll-ups that'll barely sell anyway, because they exist so they can say "Starting at [lower $]" than what dealers actually keep in stock. This kind of stuff happens in tech all the time, like lower tier CPUs that are actually manufactured as higher tier ones, but with CPU/GPU cores disabled even if they weren't defective.
  - ranger_danger 2y ago
    Maybe if they didn't gatekeep the feature behind an app in the first place, a lot more people would use it.
quantum_state 2y ago
Very much indeed. Lots of auto makers are quite naive … there should be laws governing this …
Arainach 2y ago
How long are memories? Annoying a subset of your customers for 20 years in exchange for orders of magnitude more profit for the rest of time? We're seeing it in housing right now - predatory institutional investors buying up stock while younger generations are increasingly coming to terms with the idea of renting for their entire lives.
mikeyouse 2y ago
In theory they much better align expenses with revenue. If you need to maintain servers and pay for LTE plans in perpetuity to make this functionality work, then a subscription makes more sense than bundling it with the purchase price. People are just tired of paying for this kind of thing though, every aspect of human existence is being loaded into a subscription service.
- Justsignedup 2y ago
  The problem is value add: The old remote start system worked just fine. I click a button, a remote signal is sent to my car. Boom. Was it perfect? No. But it was local. Now we replaced a local system with a worse one. I tried using the mazda start and the delay could be 10 minutes because it depends on network coverage OR just how frequently the car wakes up to check the network. Edit: What would I pay for? - Remote start service that will automatically start my car 45 minutes after my alarm goes off if the external temperature in my area is below 40 degrees F. That's additive, and many would want this in say wisconsin, but its not a feature many would need, so the market is reduced.
  - AdamJacobMuller 2y ago
    There is lots of value to LTE-based start. It works even if you're too far from the car for the RF signal to reach. I park just below my office window because if I'm too far away, my RF-based remote start won't work. Also being able to remotely adjust climate settings would be nice. I do fully disagree with their implementation of this, especially with regards to a $10 subscription fee.
    - paxys 2y ago
      And what about if you don't have good cell service in your parking lot or garage?
    - Justsignedup 2y ago
      The problem is the trade-off. We don't get to decide "I like remote-start, but I want to be able to start it from inside the store while the car is in the parking lot" -- That's a $10 a month gain that I'd pay. I don't care about that? Well I can use short-range radios. If that was the feature? It would be hailed as awesome. This is the pushback. Mazda turns off a bunch of features unless I pay $10 and the old version was working just fine for me.
stranded22 2y ago
The stock market love companies with subscriptions…
wvenable 2y ago
It's basically free money. You get money from people who subscribe and nothing from people who don't. Since so many companies are simultaneously doing this app-powered subscription based value extraction there is no competitive disadvantage to doing it.

by chrsw 2y ago

ranger_danger 2y ago

The problem is it does work, a lot, and not enough people push back to hurt their sales, versus the number of people that just pay it, or weren't going to use the feature anyway. Same thing with all the data collection and privacy violations of many other companies as of late. They keep doing it because it's not hurting their bottom line. I think tech people often forget that we are not their target audience.

giobox 2y ago
> The problem is it does work, a lot, and not enough people push back to hurt their sales All the evidence in the car industry to date I've seen appears to show charging subscriptions for hardware functions that were previously free or included from factory with no ongoing cost tends to back fire - BMW famously first tried a few years ago to make heated seats subscription based, and has fully backtracked etc. > https://www.autocar.co.uk/car-news/new-cars/bmw-will-not-charge-extra-activate-existing-functions-cars https://www.autocar.co.uk/car-news/new-cars/bmw-will-not-cha... "We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high. People feel that they paid double – which was actually not true, but perception is reality, I always say. So that was the reason we stopped that." Remote start, widely available as a free to use feature in many Mazda models to date, falls in the same bucket really. If BMW can't make it work at the premium ends of the market, difficult to see Mazda doing it either.
- beepboopboop 2y ago
  > People feel that they paid double – which was actually not true, but perception is reality, I always say. Do you have any ideas on why the double cost is not true? Maybe manufacturing efficiencies make it cheaper to install the parts despite whether the customer paid for the upgrade?
  - ProfessorLayton 2y ago
    It's likely just economies of scale, similar to how almost all cars, even the cheapest ones, have electric windows. It's cheaper to include them in all model tiers than to keep a separate SKU for roll-ups that'll barely sell anyway, because they exist so they can say "Starting at [lower $]" than what dealers actually keep in stock. This kind of stuff happens in tech all the time, like lower tier CPUs that are actually manufactured as higher tier ones, but with CPU/GPU cores disabled even if they weren't defective.
- ranger_danger 2y ago
  Maybe if they didn't gatekeep the feature behind an app in the first place, a lot more people would use it.

quantum_state 2y ago

Very much indeed. Lots of auto makers are quite naive … there should be laws governing this …

Arainach 2y ago

How long are memories? Annoying a subset of your customers for 20 years in exchange for orders of magnitude more profit for the rest of time? We're seeing it in housing right now - predatory institutional investors buying up stock while younger generations are increasingly coming to terms with the idea of renting for their entire lives.

mikeyouse 2y ago

In theory they much better align expenses with revenue. If you need to maintain servers and pay for LTE plans in perpetuity to make this functionality work, then a subscription makes more sense than bundling it with the purchase price. People are just tired of paying for this kind of thing though, every aspect of human existence is being loaded into a subscription service.

Justsignedup 2y ago
The problem is value add: The old remote start system worked just fine. I click a button, a remote signal is sent to my car. Boom. Was it perfect? No. But it was local. Now we replaced a local system with a worse one. I tried using the mazda start and the delay could be 10 minutes because it depends on network coverage OR just how frequently the car wakes up to check the network. Edit: What would I pay for? - Remote start service that will automatically start my car 45 minutes after my alarm goes off if the external temperature in my area is below 40 degrees F. That's additive, and many would want this in say wisconsin, but its not a feature many would need, so the market is reduced.
- AdamJacobMuller 2y ago
  There is lots of value to LTE-based start. It works even if you're too far from the car for the RF signal to reach. I park just below my office window because if I'm too far away, my RF-based remote start won't work. Also being able to remotely adjust climate settings would be nice. I do fully disagree with their implementation of this, especially with regards to a $10 subscription fee.
  - paxys 2y ago
    And what about if you don't have good cell service in your parking lot or garage?
  - Justsignedup 2y ago
    The problem is the trade-off. We don't get to decide "I like remote-start, but I want to be able to start it from inside the store while the car is in the parking lot" -- That's a $10 a month gain that I'd pay. I don't care about that? Well I can use short-range radios. If that was the feature? It would be hailed as awesome. This is the pushback. Mazda turns off a bunch of features unless I pay $10 and the old version was working just fine for me.

stranded22 2y ago

The stock market love companies with subscriptions…

wvenable 2y ago

It's basically free money. You get money from people who subscribe and nothing from people who don't. Since so many companies are simultaneously doing this app-powered subscription based value extraction there is no competitive disadvantage to doing it.