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by FpUser 2436 days ago
Congrats to authors and good luck.

Have a question. I do pay for few things (netflix, amazon prime and couple of others). Their services are natural candidate in my opinion for being billed monthly.

Now everyone my cats included are trying to sell their wares however small they are as a service. If I've paid monthly fee for every notepad sized program I use I'd be out of commission.

How does this business model manage to survive is puzzling to me.

4 comments

To play devil's advocate, part of the reason that this business model survives is because of how much better it is for the creator of the service.

Receiving a steady flow of income from those who use your product every month is a great proposition. Additionally, if you build a product useful to more people, your monthly income increases (it's recurring, as opposed to being cash-flow based).

On the user's side, the argument is twofold:

(1) there's increased competition. Economically, the switching cost is lower if you're paying each month— to make an analogy, it's easier to convince someone to lease a new car at the end of a lease than it is to convince someone to buy a new car when they have already bought a car. This allows a lot of new and impressive SaaS companies to grow like wildfire.

(2) there's more freedom of choice, because you're entering a relationship with a company only for a period in which it benefits you enough that you want to continue using it (and as mentioned above, there's ideally plenty of alternatives). This motivates companies to improve their offerings.

While it isn't perfect, I doubt amazing apps like Notion would exist if not for a subscription model. It just isn't worth it to make a perfect note-taking app otherwise.

I agree, it's ridiculous! Not to mention that many app developers (as mentioned in the post) can't grind along on a single app for 10 years, so you most likely are not getting $5/mo (or more!) of value out of the product for 10 years.

Sublime did it best, IMO. Charge a non-negligable amount ($70) for an individual, but pennies to a company. That's how many of us got our licenses. That $ should be enough to run their business if it's a good product, and when the $ dries out because of competition, make something new! Seems greedy that everyone who writes a note-taking app thinks they deserve a subscription in perpetuity.

The flip side of the story is that Sublime died. I know they have had some updates recently, but for years it was completely stagnant. The hole that was left by Sublime was filled by VS Code. Maybe Sublime would've survived with a subscription model?

When you're paying a subscription you are paying for the maintainer's continued interest in the product over time, which is not to be underestimated. Software rots quickly.

I don't know how many people have downloaded or purchased Sublime but I'm not 100% convinced it slowed down due to not having recurring revenue.

ST2 has been out for over 6 years and ST1 was initially released 11 years ago (based on the wiki). I have to imagine he made really good money. Possibly even so much that he lost interest after hitting a financial goal.

Back in 2017 MS said more than 2.6 million people use VSCode on a monthly basis. That's not downloads, but monthly users. It could maybe be double that by now (who knows).

But if you're talking about millions of active users, I don't think it's unreasonable to think 3-4 million people used Sublime in its life time -- especially before VSCode existed.

If only 1% of users bought it (40,000 sales) at $70 = $2,800,000 dollars in a business where practically all of that is profit. That doesn't even account for the $30 price to upgrade from ST2 to ST3. Even if he only sold half of that amount, that's still crushing it over a 10 year period of time.

Sublime is very much alive, they had another update at the start of October. They also have a second product now, Sublime Merge.
I just went back to Sublime. I'd forgotten how fast and editor can be.
I don't agree, coworkers and I use Sublime as our daily drivers. I think it depends very heavily on the tech stack and the work being done.

I also disagree that you can even compare Sublime to VS Code because one is a text editor and one is an IDE. I don't know a single person that switched just because Sublime wasn't being updated, they switched because VS Code has some really deep integrations and features that are easy to become dependent on.

Alfred has another better option than subscriptions IMO where they release new major versions you have to pay for every couple of years, but you own the previous version in perpetuity.

VS Code isn’t really an IDE, it’s more of a text editor with a much stronger extension story than Sublime’s.
did sublime die? I use it everyday. and I am looking forward to sublime merge with plugin capabilities
None of my colleagues or friends are using Sublime anymore. I think that there's a chart somewhere at Sublime HQ that looks like a ski slope.
If they implement a sane plugin system I will switch to Sublime. Currently it takes too much effort to use Sublime as and IDE when you compare it to something like VS Code.
I went back to it after getting sick of the slowness/bloat of jetbrains and vscode.
I'm also surprised by all the talk about Sublime's death. I use it all the time for everything except C++ (for which I use CLion) and it's good as it is, I don't see why would it need update churn. Well, except for still making money for the author, I guess.
Well people seem to expect support and updates in perpetuity.

In reality most software offered a pseudo subscription through updates. Every couple of years they would offer a new release with heavily promoted features to entice you to open your wallet. Bug fixes were often an afterthought.

The minute you stopped paying for service is the minute you loose it. With software updates you can still use the old software just fine. So, no I would not consider it a form of subscription.

Lemme give you very particular example. I own old copy of DxO labs software for processing photos. It suits me just fine and works like a charm despite it being 4 years old. they keep sending me offers to upgrade to new version with new features at very attractive price. If one day the old one stops working for me for whatever reason I will upgrade then. But I have already saved tons of money on just this software alone never mind whole bunch of other titles that I bought.

It's common sense that these SaaS products are targeted towards people who use them enough to pay for it, monthly.

The reason why it's better for the creator to offer it paid only, is that they can focus on shipping features only for those who care about their offering enough to pay for it. These users could be described as power users in comparison with people who expect the service to be free.

The website FAQ even says that this is for professional use, which means that the person who's subscribing, needs to use this on a day to day for their work (or something that's important to them).

Subscription model fits better. There are ongoing costs to maintaining the service indefinitely.

One off cost only really makes sense when you can sell a piece of software as being done essentially and move onto the next piece of software to charge a one off cost for. Having a one off cost to find ongoing costs probably isn’t going to end well as soon as a product is no longer growing.

If there IS A SERVICE. Releasing new version of software is not really service, Netflix is. If new version is compelling enough I'll upgrade, if not then it is vendor's problem. As a customer I could care less what suits better for Vendor. I am not paying $5-10 or even more/month 100 times. That is insanity.