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It never ceases to amaze me how many people "fall" for this "lifetime" pricing model. In fact I said the exact same thing three months ago [1]. The fact that t

by cletus 14y ago

It never ceases to amaze me how many people "fall" for this "lifetime" pricing model. In fact I said the exact same thing three months ago [1]. The fact that the service provider is not getting any future revenue from you, even if they've fairly discounted your lifetime value, gives them the incentive to get rid of you. Additionally it gives the wrong incentives to users to "abuse" their "unlimited" service. You saw this with AT&T's "unlimited" wireless data plans recently [2]. I know why people do it: as an alternative to raising capital. Businesses do Groupons for the same reason. In fact, I'm feeling like a broken record here [3]. The problem with Groupon (and similar "offer" sites) is they create the wrong incentives and attract the worst kind of customer. The best situation for Groupon and for businesses is for lots of people to buy the offers and then not to use them. The lesson here is that if you want to create a sustainable and liked business, you need to align your incentives with those of your customers [4]. As a customer, stop falling for this charade. As a business, stop taking short term cash flows for perpetual liabilities just to raise capital. Seriously. EDIT: regarding "unlimited" (in Karunamon's comment), he is correct: we do need to hold companies to a higher standard. For example, Australia's ACCC (I guess equivalent to the FTC but with a heavy focus on consumer rights) has cracked down on the use of "unlimited" (eg [5]). But that just reinforces my point. In Australia pretty much all Internet plans have stated quotas. With unlimited plans you create the wrong incentives to throttle users, impose nebulous "fair use" conditions and generally whittle away at what's really "unlimited". It's the wrong incentive system. With Internet quotas at least you know you're getting what you pay for and your plan is priced for your usage, not some median or 95% usage that will constantly have the provider trying to throttle "power users". [1]: http://news.ycombinator.com/item?id=3936701 http://news.ycombinator.com/item?id=3936701 [2]: http://mashable.com/2012/03/01/att-limits-unlimited-data/ http://mashable.com/2012/03/01/att-limits-unlimited-data/ [3]: http://news.ycombinator.com/item?id=2649739 http://news.ycombinator.com/item?id=2649739 [4]: http://www.accountingweb.com/blogs/ronaldbaker/firms-future/incentives-matter http://www.accountingweb.com/blogs/ronaldbaker/firms-future/... [5]: http://www.lifehacker.com.au/2010/12/accc-taking-tpg-to-court-over-unlimited-plans/ http://www.lifehacker.com.au/2010/12/accc-taking-tpg-to-cour...

holgate 14y ago
Well, thanks for all your recent wisdom. Now all you need to do is travel back in time to 2004 and warn everyone that backing Dean Allen's little cottage-industry hosting venture will end in tears.
otneusnocuh 14y ago
"As a customer, stop falling for this charade." No, theres is no reason not to take them at their word. "lifetime" and "unlimited" need to be protected advertising words. There is no reason whatsoever to tolerate straight up lies in marketing because they are common lies.
Karunamon 14y ago
Reposting a dead reply from otneusnocuh because it took the exact words out of my mouth: > "As a customer, stop falling for this charade." No, theres is no reason not to take them at their word. "lifetime" and "unlimited" need to be protected advertising words. There is no reason whatsoever to tolerate straight up lies in marketing because they are common lies.
- mikeash 14y ago
  Lifetime service can be really useful for a company to sell, too. It's basically a way for them to borrow money at a cost potentially below what other capital markets may provide. If you have customers who will buy and are wiling to take the risk that you'll go out of business, it can be a good way to raise money without becoming indebted to banks or VC. I imagine Joyent benefitted from this when they were starting out. Now that they're done reaping the benefits, they no longer want to hold up their part of the bargain... but why should we let them get away with that? Letting companies get away with this is bad not only for the buyers, but also for the companies themselves. If you scare customers away from "lifetime" purchases by making it known that companies can get away with breaking their side of the agreement, you'll make it more difficult for them to use this useful tool.
  - genbattle 14y ago
    Just thinking of a specific case, but what do you think about subscription games that promise a lifetime membership (e.g. Star Trek online), then end up going F2P anyway? I would postulate that this is a similar issue, as you are now being charged for the game _again_ via the F2P model. That said, it seems like it would be a harder one to solve; would the paid content have to be available to the lifetime subscribers for free? Would you stop the game from going F2P to uphold the lifetime/unlimited advertising limitations? In the latter case I'm sure companies would just stop offering unlimited plans for games like this. I think it also sends the wrong message: if you're offering "unlimited" plans at launch, you obviously don't have that much faith in the longevity of your subscription game. I agree that companies need to stop offering unlimited use of a product or service where their costs keep scaling with use. Companies always need to base this sort of pricing on the maximum possible natural lifetime of the product, not on when they can pull it if they get into hot water. We had the same thing here in New Zealand when the incumbent ISP offered "unlimited" ADSL plans. Their network of course got clobberred, and they backtracked on it and paid out all customers who'd been on the plan after a complaint to the government about false advertising (they started surreptitiously shaping traffic after some months). They later bought the plans back, but with much more fine print, and much more traffic shaping and regulation on the connections.

by cletus 14y ago

holgate 14y ago

Well, thanks for all your recent wisdom. Now all you need to do is travel back in time to 2004 and warn everyone that backing Dean Allen's little cottage-industry hosting venture will end in tears.

otneusnocuh 14y ago

"As a customer, stop falling for this charade." No, theres is no reason not to take them at their word. "lifetime" and "unlimited" need to be protected advertising words. There is no reason whatsoever to tolerate straight up lies in marketing because they are common lies.

Karunamon 14y ago

Reposting a dead reply from otneusnocuh because it took the exact words out of my mouth: > "As a customer, stop falling for this charade." No, theres is no reason not to take them at their word. "lifetime" and "unlimited" need to be protected advertising words. There is no reason whatsoever to tolerate straight up lies in marketing because they are common lies.

mikeash 14y ago
Lifetime service can be really useful for a company to sell, too. It's basically a way for them to borrow money at a cost potentially below what other capital markets may provide. If you have customers who will buy and are wiling to take the risk that you'll go out of business, it can be a good way to raise money without becoming indebted to banks or VC. I imagine Joyent benefitted from this when they were starting out. Now that they're done reaping the benefits, they no longer want to hold up their part of the bargain... but why should we let them get away with that? Letting companies get away with this is bad not only for the buyers, but also for the companies themselves. If you scare customers away from "lifetime" purchases by making it known that companies can get away with breaking their side of the agreement, you'll make it more difficult for them to use this useful tool.
- genbattle 14y ago
  Just thinking of a specific case, but what do you think about subscription games that promise a lifetime membership (e.g. Star Trek online), then end up going F2P anyway? I would postulate that this is a similar issue, as you are now being charged for the game _again_ via the F2P model. That said, it seems like it would be a harder one to solve; would the paid content have to be available to the lifetime subscribers for free? Would you stop the game from going F2P to uphold the lifetime/unlimited advertising limitations? In the latter case I'm sure companies would just stop offering unlimited plans for games like this. I think it also sends the wrong message: if you're offering "unlimited" plans at launch, you obviously don't have that much faith in the longevity of your subscription game. I agree that companies need to stop offering unlimited use of a product or service where their costs keep scaling with use. Companies always need to base this sort of pricing on the maximum possible natural lifetime of the product, not on when they can pull it if they get into hot water. We had the same thing here in New Zealand when the incumbent ISP offered "unlimited" ADSL plans. Their network of course got clobberred, and they backtracked on it and paid out all customers who'd been on the plan after a complaint to the government about false advertising (they started surreptitiously shaping traffic after some months). They later bought the plans back, but with much more fine print, and much more traffic shaping and regulation on the connections.