[brookst]

Subscriptions align developer and user interests and produce better products and less wasted money in the long run.

One-time up front purchases only reward developers for expanding the target market of their product; whether the product improves over time has no bearing on revenue.

From a developer’s perspective, the one-time price should be the CLV of what they’d get with a subscription. For users, that means much higher risk.

I would much rather have 20 apps that I pay $10/mo/ea for than to buy one new $600 app a quarter and hope the developers I bought from years ago still care about me even though they will never make another dime.

Oh, you want apps to be one-time purchases for $20 with a useful lifetime of 10 years? Then subscriptions aren’t the problem, you just want $0.17/mo subscriptions, which are unlikely to be economically viable either.

[lapcat]

> Subscriptions align developer and user interests and produce better products and less wasted money in the long run.

This is incorrect, as evidenced by the entire history of software development before the App Store, as well as software now that is sold outside the App Store.

When developers can choose their own business model, outside the constraints out the App Store, they overwhelming do not choose subscriptions. Indie devs outside the Mac App Store still largely follow the traditional upfront paid with paid upgrade model.

The subscription model was started mostly by BigCos such as a Adobe and Microsoft, who had a monopolistic market share for their software suites and thus could bleed a captive audience for almost unlimited amounts of money.

The ahistoricalness of the claim "subscriptions were always the only viable business model" really bothers me. It feels like a kind of Stockholm Syndrome. Cupertino Complex?

Let's call it what it is: software rental. Long-term rental is almost never a good deal for consumers over ownership.

> One-time up front purchases only reward developers for expanding the target market of their product; whether the product improves over time has no bearing on revenue.

This seems ridiculous to me, as a developer. Improving your product over time is one of the most important ways you can expand the target market of your product. I mean, why do you think Apple keeps making a new iPhone ever year? Were they going to keep expanding their market by still selling the 2007 model of iPhone in 2023?

[hgsgm]

Software was incredibly expensive before the subscription era.

[goosedragons]

Was it? It's not really cheaper now. If you're lucky the subscription price is similar to the price of the standalone price after X years, usually how often they'd release an update. Except with the subscription you can't NOT update if the current version meets your needs.

I think of a few apps I've bought that moved to the subscription model where the subscription is several times the price of the app in a year.

[brookst]

> If you're lucky the subscription price is similar to the price of the standalone price after X years,

Yes! That is how it should work. Think of it as costing the same if you find value for years, but you have the option of bailing early and getting a refund if you don’t find it as valuable as you expected.

> where the subscription is several times the price of the app in a year

Don’t conflate the price and the model. Those developers found that they were not financially viable and changed both price and model. The thinking was probably something like “in order to make a decent living, we have to increase price by 3x” / “wow! Nobody will pay that up front, it’s too risky. But subscriptions will produce the same financial result and not scare off new customers.”

This is a pie-slicing problem. Developers want to make money, users don’t want to pay. Upfront pricing is a lose-lose, with lower sales for developers and higher risks for buyers.

[goosedragons]

Okay. But if you're happy with the feature set AS IS the day you subscribe then you're paying more. E.g. if Photoshop 7 still meets your needs then you don't need to upgrade to CS, CS2,... etc. Now with CC you're "upgrading" every version even if you don't touch a single new feature. That's not cheaper. There's no guarantee the user needs or wants the upgrade but with a subscription there's no choice.

Let me bail early with a trial or a return period.

It's also not cheaper if devs reprice things to be more expensive even if that's more sustainable for them.

[ghaff]

Right. (Also in-app purchases.)

It used to be routine to spend maybe $100 up to even a $1000 in today's dollars for a retail software package--and you probably got some discount on the next upgrade. Good luck selling that today. People have just gotten away from paying for digital content up-front (whether software, music, or movies)

[lozenge]

The revenue of the developer is the cost paid by the users. They are one and the same. We can't say that subscriptions help keep developers in work without also saying they are costing users.

[AlexandrB]

True in the sense that I stopped paying for any software that went subscription. Saved me hundreds of dollars a year that would otherwise have gone to the developers.

[moritz]

Not only that, in case of the App store it also made me spend way less on paid-upfront as well. Time and time again, software I paid for was replaced on my device with shareware that nags me for subscription later on. Once you experience that maximal user-hostile conduct a few times, it makes you wary of "buying" anything in that ecosystem except for maybe the occasional 1$ throwaway thing— Why should I spend 69$ on an app that will most probably pivot to a "sustainable" rentsomeware model once they have milked the market of people willing to pay upfront, and, again, take the software you paid for away from you and replace it with shareware on your device.

[lapcat]

The submitted article discusses software pricing extensively.

[Panzer04]

I don't agree with your assertion on upfront purchases. If you sell a product people get good value from, you need to meaningfully improve that product to sell it again to the same user after improving it.

Many people are perfectly happy with old versions of software - they don't need the new improvement, so they don't buy it. If anything, subscriptions somewhat disconnect the feedback of improvements, right? Users have to subscribe to use your software, and most of the time they'll do it whether you make your software better or not, unless there is a direct competitor that is easy to switch to (or becomes so superior they overcome inertia).

I agree that in theory, a subscription is not necessarily bad - but most of the time people are happy with some set of features, and do not necessarily need a continuously improved product. In that sense, subscriptions are forcing people to spend more money on software improvements they may not need. I guess this is probably good for software developers, but bad for people in general (This applies more to tools than a continuous service that requires significant maintenance to keep up to date anyway, I suppose). The problem is companies attempting to turn almost everything into a subscription, even those that don't need significant regular updates or maintenance.

[NikolaNovak]

>> I would much rather have 20 apps that I pay $10/mo/ea for than to buy one new $600

Right, and that's a fair preference, as long as we understand that some people have different preferences. I'm in completely opposite camp - I'm paying ridiculous amount of money a month for apps that I use once or twice a year. I am also paying money for apps I use all the time but that I'll lose the moment I stop paying.

I have frequently rejected a $5/month app that I would've happily bought for $30, even if I know I only need it once and can cancel after a month (utility type software usually).

[codetrotter]

> I have frequently rejected a $5/month app that I would've happily both for $30, even if I know I only need it once and can cancel after a month (utility type software usually).

I agree but I also want to point out that it is possible to cancel the subscription right after you start it, and that way you are only charged once and you get to use it for the month that you paid for, without having to remember to cancel the subscription later. This is very helpful to me at least.

[NikolaNovak]

Logistically that is 100 % true.

Practically I don't do it, cognizant it may not be a rational choice but rather an emotional one (or possibly it is long term rational - I don't want to support that model for apps that don't need updates, further development, or online / server support. E.g. Why is a file duplicate detection app, or file sync app, or data recovery app a monthly fee? If you made it well once I don't need to update it virtually ever - or if I do, than the features must be massive and it's ok to have ver 2 for money. I feel subscription is often a money grab, life fitness hope that people will forget to cancel, rather than some mutual value proposition.)

[quickthrower2]

It is almost game theory:

The SaaS wants to extract as much value as possible. They don't know YOUR individual use case or threshold, but they need to price in a general way so that based on the model of reality, the most revenue will come in (+ whatever other goals).

You want to get as much value as possible.

If they know that you use it twice a year, they could offer you a special price. But doing that for just you might be not worth the extra code in their licensing and usage tracking system. So there needs to be lots of you.

In addition there could be high paying whale users happy to pay a lot and only use it twice a year.

So they need to know how tight/loose each customer is, in addition to what they want, to come up with appropriate pricing.

It would be like a bazaar where the price for a vase is 1000 but locals will haggle it down to 100, expats will get it for 150, tourists that haggle get it down to 250, and naive tourists pay 1000, the full price. And the seller can look at them, their body language, the look in their eyes, and judge the price accordingly.

AI might get us there!

[jsmith99]

I'm sure differential pricing would be more efficient but there aren't any easy ways to do it. Maybe developers can advertise discount codes on sites where cheapskates hang out. Can you imagine the backlash on HN if it turned out apple track how much you use apps and increased the price if they thought you were likely to find the app useful?

[version_five]

SaaS and thus subscriptions makes sense when the software itself is offering a service. The example I always use is office365, or Gsuite. They offer storage, email, and online access to the office suites and email. It's "value add" over just paying a tax for the privilege of running code, and is imo a better proposition than having to pay outright for a static version of the tools.

The same is true for like Salesforce or other big name SaaS.

What rubs me the wrong way is when what are effectively utilities try and market themselves through a subscription. There were a couple image processing tools posted here recently that effectively just did some image transforms, and they wanted a subscription fee. I don't think that's a reasonable model, there is no reason why I'd want to pay a recurring fee for what amounts to a neat script. I think there's currently much of trying to cram utility software that doesn't provide a service into a service model

[swatcoder]

> whether the product improves over time has no bearing on revenue

Only very rarely do I want my software to “improve over time”. That’s code for feature accumulation, which is essentially a negative for existing users but helps publishers expand their market.

Generally, there’s something I want to do. I find software that does it in a way I like. I want to have that software, exactly as I encountered it, so that I can do the thing that I want to do in the way that I want to do it.

Changing the interface every 18 months to accommodate the 217 new and irrelevant-to-me things it does is not usually what I was looking for.

Occasionally, there is a specific new thing I want to do and I go looking for software that does it. If it’s from a publisher whose work I liked previously, I’ll likely turn to them first and will decide if I like what they’re now selling.

But again, that’s me and my goal looking for software when I need it. Adding new noise to the thing I paid for (or am paying for) is almost always a nuisance and inconvenience that removes value from my prior choice.

[scantron4]

Meditation timer this post is about you!

[AlexandrB]

> Subscriptions align developer and user interests and produce better products and less wasted money in the long run.

This is not true. One particular problem is that developers no longer have to compete with their "n-1" release, which means a product can regress but the customer is locked in regardless. Especially if proprietary data formats or some kind of cloud storage is involved.

[comfypotato]

I think your last paragraph has a lot of merit. It’s that subscription costs are too high. Netflix and company are a completely different animal because there’s content involved; I’m talking about non-professional non-content apps. Obviously .17 is too low, but often I feel that 3 or 4 would be more appropriate than the 12-20 standard. Especially when the paid app only offers 20% more utility than the free app. But I’m no business major.

[Silverback_VII]

Nice reasoning but the truth is probably simply that subscriptions generate way more money. Also because not a few ppl forget to cancel their subscriptions.

[TeMPOraL]

> Nice reasoning but the truth is probably simply that subscriptions generate way more money.

It seems that they do, but even if they didn't, I think it's enough that they derisk things for the vendor - subscriptions give you a steady stream of money, one that changes continuously and can be scaled up gradually. Nice and predictable. In contract, one-time purchase model means the vendor has to first spend a lot of money developing the product, and then hope it'll be popular enough to at least cover those costs.

I understand the appeal for the vendor, but as a user, I hate it with passion.

[TeMPOraL]

> Subscriptions align developer and user interests and produce better products and less wasted money in the long run.

In theory, maybe. In reality, I doubt it. Personally, I don't feel my interests are very much aligned with, or even cared about by, subscription software developers.

> I would much rather have 20 apps that I pay $10/mo/ea for than to buy one new $600 app a quarter and hope the developers I bought from years ago still care about me even though they will never make another dime.

Here's the thing, though: in that latter case, even if the devs no longer care about you, you still have the software, and it still works. Conversely, subscription devs may "care" about you until they get bored, or get acquihired, or run out of money, etc. and then suddenly you no longer have the software. Or they'll start making some silly or abusive changes, and then you'll be wishing the devs no longer cared.

This is to say: there's a risk attached to subscriptions (or, put another way, extra value in one-time purchase model).

Also, too little is being said about the other cost of subscriptions, which does not show up on the sticker price: each subscription is a business relationship. A relationship I need to keep track of, and which regularly reminds itself on my existence (unless the vendor is making money on forgotten subscriptions - then it stays perfectly quiet) - costing me time, effort, and occupying my memory. Importantly, it's also a relationship I don't want to have in the first place.

When I go to a grocery store to buy some bread, I want to... buy some bread. I don't want to enter into a relationship with the bakery, or their supplier. Today, I get the bread, they get the cash, and that's the end of it. Tomorrow, I may come back to the same place, or go somewhere else. It's the same with software: I may pay once, or top it up repeatedly, but all I care about is software - I don't give two damns about the company making it, or other products they have. I never, ever want to think about them. Subscriptions force me into such relationships. I have a limited capacity for them - my phone operator, utility companies, HOA, etc. are already enough.

Going back to the bakery example, theoretically I do enter a relationship with a seller every time I buy something from a physical or on-line store - a relationship I can use to e.g. get my goods fixed or my money back if something is wrong with the purchase. However, this is fully covered by consumer protection regulations, which means I can safely ignore those relationships - they literally reduce to "keep a proof of purchase, read up on relevant procedure when the vendor fucks up". Subscriptions would be nicer if they worked this way too.