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If VPNs have such big margins then why doesn't a competitor undercut them all on price?
by arrowsmith 2y ago
If VPNs have such big margins then why doesn't a competitor undercut them all on price?
- h0l0cube 2y agoBecause it’s mostly brand recognition that lends security products an aura of trustworthiness, and that involved a high ad spend with an advantage towards established brands.
- stevoski 2y agoMany of the brand-name VPNs are owned by the same parent company. They were gobbled up one by one.
- mentalgear 2y agocare to provide which one / details ?
- dngray 2y agoFunnily enough Windscribe did an article on this: - https://kumu.io/Windscribe/vpn-relationships https://kumu.io/Windscribe/vpn-relationships - https://windscribe.com/vpnmap https://windscribe.com/vpnmap The main two that parent poster would be talking about would be "Kape Technologies" and "Ziff Davis VPNs". We also did an article in 2019 https://www.privacyguides.org/articles/2019/11/20/the-trouble-with-vpn-and-privacy-review-sites https://www.privacyguides.org/articles/2019/11/20/the-troubl... They do a lot of astro-turfing with "review websites" that aren't actually independent at all.
- Ylpertnodi 2y agoMullvad very rarely (if ever) get mentioned on vpn review sites. So I've used them for the last several years.
- datadrivenangel 2y agoAnd they're doing print advertising!
- kirb 2y agoAny idea why there hasn’t been much if any enforcement from the FTC and co about the sketchy VPN review blogs? Seems like especially Lina Khan’s FTC would be interested to find a way, because giving the impression of an independent review and then adding a little “actually we’re extremely biased” disclaimer somewhere doesn’t seem like it should be acceptable. They might be offshore, but they do plenty of business with US creators.
- bluehatbrit 2y agoI think GP was probably exaggerating but there are far fewer owning companies than actual vpns. This article does a decent job of showing it https://vpnpro.com/blog/hidden-vpn-owners-unveiled-97-vpns-23-companies/ https://vpnpro.com/blog/hidden-vpn-owners-unveiled-97-vpns-2... but may be a bit out of date now (Oct 24). I believe it, or a similar one, made the rounds on HN a year or so ago.
- dngray 2y agoThat website is owned by a VPN company iirc, specifically NordVPN or at least they astroturf for them. Note that on the side there is 1 & 2 VPNs and they're NordVPN and Surfshark which have the same parent relationship as they merged. That's the thing though it makes it look like there's more than one as opposed to just slapping a NordVPN ad there. Illusion of choice. And no they're not exaggerating, have a look at the two companies I mentioned and how many "brands" they own.
- aoanevdus 2y agoThere are cheap and even free VPNs. If your ad can convert customers who aren’t going to comparison shop, you don’t need to be offering the lowest price.
- __alexs 2y agoThey do? E.g. PIA is 1/3rd the price of Nord.
- dngray 2y agoPIA is just one of the Kape brands. Nord Security owns the Nord, Surfshark and a bunch of others.
- __alexs 2y agoWhat does that have to do with pricing competition? Clearly VPNs do compete on price, just the low cost brands aren't blowing money on ad spend.
- dngray 2y agoOr maybe just different marketing strategy eg Nord costs more to begin with, and then they use "promo" deals with offer huge discounts resulting in a normal price again.
- franga2000 2y agoFew people decide between "security products" based on price, they do it mainly based on reputation. Buying that reputation through ads is expensive, so you can't go too low in price. Also, there are super low-cost VPNs out there, but they're a separate market segment and we don't usually hear about them because they don't have the money to advertise in large media outlets.