[blinzy]

If that company, the one that develops DaVinci Resolve, only produced software, would that model of £200 fixed one-time payment be sufficient to be financially viable?

Let's say the company's headcount to develop/maintain such software, plus a bunch of other required roles such as marketing, sales, hr, etc., is around 25 people averaging £80,000/year each (not that far off considering employees cost more than just their salary) to make it an even £2 million/year.

That means in order to not go bankrupt, i.e. break even, they need to sell 10,000 copies to new buyers every single year. Is that realistic? I don't think so, a company that tries that model will soon go in the red because we aren't even considering other costs that a company has, which aren't negligible. Even if you cut the estimate above in half, e.g., let's say they cost £40,000 each instead, that's still 5,000 new buyers of the software each year.

In contrast, a subscription model of £100/year requires them to have 20,000 ongoing subscriptions, which is substantially easier to achieve. I believe there's a reason that a lot of companies have shifted/are shifting to a subscription model, an alternative being monetisation models such as advertisement-supported programs.

[yakubin]

Other companies which sell (only) software based on one-time payment model:

- ACD Systems (ACDSee)

- Serif (Affinity)

- Freron Software (MailMate)

- Sublime HQ (Sublime Text)

I use them all. Wouldn't pay for a subscription. I don't want a service. I want a product.

I also pay for services, but for other purposes: mail (Fastmail), online bookmarking (Pinboard), music streaming (Spotify, mostly for discovery; after I discover something I like, I usually go and buy it to have it myself), VPN, VPS. If there existed a decent video streaming service, I'd probably pay for that as well, but there isn't any.

[blinzy]

I'm not saying it's impossible to sell software with one-time payment model, I'm saying it's noticeably harder. There's always going to be companies that make do with such business models, but what's the ratio of successful companies with one-time payment out of all companies that have tried that? How does that compare with companies that go for subscription model (or ad-supported model)?

And are there any behemoths (i.e., hugely profitable companies) that do one-time payment software? Because as far as I know Microsoft would have been one of the few or only such cases (and obviously it only applies to a subset of their products, many others are using other business models) and they are also moving towards a subscription model, e.g., for Office, which considering they probably have a legion of financial analysts, accountants, etc. I assume they have done their due diligence to figure out it's worth it.

[yakubin]

Adobe used to be such a behemoth. They didn't switch to subscriptions due to unprofitability. They just wanted more and more. Same with Microsoft. They're a behemoth switching to subscriptions now. But that's not because they're running low on money. And most games are still one-time payment today. So you can count Ubisoft, EA etc. Of course there are other sources of payment for them than just the nominal price of the game, but most gamers only pay for the game and ignore everything else.

Besides, I don't think I want a market dominated by behemoths. If popularity of one-time payment model would lead to a market dominated by <25 person companies with an odd behemoth here and there, then I'm in.

Also, most software companies today are startups which exist only thanks to investor money. It's hard to say what a customer-driven market would look like. Although maybe recession is going to clear this up.

[Gordonjcp]

As I said most of their money comes from cameras. £2M per year would be a couple of thousand cameras, which feels like a fairly easy number to hit.

[blinzy]

Yes, I know you said they do sell hardware and that's probably how they survive.

If you look at my comment I said "if they only produced software", because I wanted to use it as an example (just from your £200 figure) with back of the envelope estimates to show why many companies move to subscriptions, because if you have a niche product, having new customers in the thousands or tens of thousands every year is incredibly difficult compared to having a reliable set of recurring customers with subscriptions.