A Critical Analysis of the Subscription Economy • Hacker News Board

Re: A Critical Analysis of the Subscription Economy

#11

Post by brynedwards » Fri, Jul 14, 2017, 4:13 PM UTC

Dylan16807 wrote: post #7

pspeter3 wrote: post #5

As a counter point, I hope that by paying a subscription, I get a continuous stream of small patches with bug fixes, security updates, and design improvements. I like the subscription model, especially if it has a free tier, because passionate customers can support the developer team and subsidize less passionate users

> a continuous stream of small patches with bug fixes, security updates, and design improvements That doesn't require a subscription. Plenty of companies offer a permanent purchase that comes with a year of updates or all minor-version updates or similar. The option is there to treat it similarly to a subscription, but importantly you never have to pay and what you already own can never be changed or taken away.

One I know is Bitwig who recently changed their licensing model so you get 12 months updates with your perpetual license and can pay to continue receiving updates after 12 months[1].

[1] https://www.bitwig.com/en/17/new-license-model.html

Re: A Critical Analysis of the Subscription Economy

#12

Post by adrianN » Fri, Jul 14, 2017, 4:17 PM UTC

michaelt wrote: post #10

I know a lot of people here on HN think subscription models are pretty swell - personally I think they're not so great. Sure, they provide revenue that can support security fixes - but at the cost of decimating the incentive to improve features to generate upgrade revenue. After all, if spending more on development doesn't raise revenues much, but cutting down to a skeleton team of maintenance developers means that s…

In my opinion software doesn't have to add features all the time. It would be okay for me if it kept doing what it's doing, except bugs get fixed and performance improves.

Re: A Critical Analysis of the Subscription Economy

#13

Post by yborg » Fri, Jul 14, 2017, 4:22 PM UTC

BuleBule wrote: post #2

This is a follow up to my previous article "To Catch A Liar: 1Password Edition" : https://medium.com/@guisebule/to-catch-a-liar-1password-edit...

Completely agree with your analysis, and at the same time cannot fault 1Password for doing this since they are in a position to do it. They are potentially a hundreds of million dollar acquisition if they juice those sub numbers. But they have to do this NOW, because what they are doing is not that difficult, and come the day, as it always does, that Google spies an attractive mechanism to drive more people into their ecosystem and decides they don't want to acquire you, your business will (probably) evaporate overnight.

This, for the vendor, is the other edge of the subscription model. If another flavor of the day arises that costs less, your customer base can swiftly move to this new contestant, especially in the enterprise space, because unlike a fixed license, a subscription isn't a capitalized cost. For Adobe, with their massive ecosystem, this is less practical for their customers, but a password manager? There are already a host of commercial alternatives that to an end user are all more or less the same.

Re: A Critical Analysis of the Subscription Economy

#14

Post by pspeter3 » Fri, Jul 14, 2017, 4:28 PM UTC

zAy0LfpBZLC8mAC wrote: post #6

pspeter3 wrote: post #5

As a counter point, I hope that by paying a subscription, I get a continuous stream of small patches with bug fixes, security updates, and design improvements. I like the subscription model, especially if it has a free tier, because passionate customers can support the developer team and subsidize less passionate users

> As a counter point, I hope that by paying a subscription, I get a continuous stream of small patches with bug fixes, security updates, and design improvements. But you do realize that the subscription model is exactly the thing that removes the incentive to do that, right?

Can you provide your reasoning? I assume that the subscriptions continue to fund software developers working on the product.

Re: A Critical Analysis of the Subscription Economy

#15

Post by pspeter3 » Fri, Jul 14, 2017, 4:29 PM UTC

brynedwards wrote: post #11

Dylan16807 wrote: post #7

Earlier quoted context omitted.

> a continuous stream of small patches with bug fixes, security updates, and design improvements That doesn't require a subscription. Plenty of companies offer a permanent purchase that comes with a year of updates or all minor-version updates or similar. The option is there to treat it similarly to a subscription, but importantly you never have to pay and what you already own can never be changed or taken away.

One I know is Bitwig who recently changed their licensing model so you get 12 months updates with your perpetual license and can pay to continue receiving updates after 12 months[1]. [1] https://www.bitwig.com/en/17/new-license-model.html

That seems like a good hybrid model

Re: A Critical Analysis of the Subscription Economy

#16

Post by samsolomon » Fri, Jul 14, 2017, 4:30 PM UTC

The case of Adobe is interesting. I think the move to a subscription model has been a hostile move for customers. The second you stop paying for the software, you lose the ability to open your old files.

This has allowed smaller software applications such as Sketch, The Affinity Suite and Capture One to grab marketshare. I think Sketch’s current business model is perfect. Customers pay for a year of updates. If a customer decides not to upgrade, they stay at the same version as when their license expires.

I’m certain Adobe has made a good amount of money in the short term, but they've forfeited a monopoly. I’m more skeptical about their long-term business.

EDIT: Updated for clarity.

Re: A Critical Analysis of the Subscription Economy

#17

Post by maxxxxx » Fri, Jul 14, 2017, 4:38 PM UTC

samsolomon wrote: post #16

The case of Adobe is interesting. I think the move to a subscription model has been a hostile move for customers. The second you stop paying for the software, you lose the ability to open your old files. This has allowed smaller software applications such as Sketch, The Affinity Suite and Capture One to grab marketshare. I think Sketch’s current business model is perfect. Customers pay for a year of updates. If a cus…

"The second you stop paying for the software, you lose access to any of your old files."

It seems you lose editing access, you still can view them. Still not great, but I wanted to clarify.

Re: A Critical Analysis of the Subscription Economy

#18

Post by ColanR » Fri, Jul 14, 2017, 4:39 PM UTC

pspeter3 wrote: post #14

zAy0LfpBZLC8mAC wrote: post #6

Earlier quoted context omitted.

> As a counter point, I hope that by paying a subscription, I get a continuous stream of small patches with bug fixes, security updates, and design improvements. But you do realize that the subscription model is exactly the thing that removes the incentive to do that, right?

Can you provide your reasoning? I assume that the subscriptions continue to fund software developers working on the product.

I think parent's point is about how the company is drawing in cashflow. If the customer owns perpetually a copy of the software, the only reason they'll buy a new copy is if the new one is substantially better than the old: hence, the only way the company makes cash next year is if they've been improving their product.

With the subscription model, the company is still going to make that income regardless if they have a new product. As long as no other competitor has developed a competing product, there's no reason to innovate. (and there's lots of ways to deal with competitors besides innovating)

Re: A Critical Analysis of the Subscription Economy

#19

Post by snuxoll » Fri, Jul 14, 2017, 4:41 PM UTC

samsolomon wrote: post #16

The case of Adobe is interesting. I think the move to a subscription model has been a hostile move for customers. The second you stop paying for the software, you lose the ability to open your old files. This has allowed smaller software applications such as Sketch, The Affinity Suite and Capture One to grab marketshare. I think Sketch’s current business model is perfect. Customers pay for a year of updates. If a cus…

While not perfect, I think JetBrains made an acceptable compromise with their new subscription licenses. Getting stuck with a 1-year-old version rather stinks if you decide to cancel, but you're never "stuck" without access to a product you rely on because you decided to stop paying.

Re: A Critical Analysis of the Subscription Economy

#20

Post by gaius » Fri, Jul 14, 2017, 4:44 PM UTC

maxxxxx wrote: post #17

samsolomon wrote: post #16

The case of Adobe is interesting. I think the move to a subscription model has been a hostile move for customers. The second you stop paying for the software, you lose the ability to open your old files. This has allowed smaller software applications such as Sketch, The Affinity Suite and Capture One to grab marketshare. I think Sketch’s current business model is perfect. Customers pay for a year of updates. If a cus…

"The second you stop paying for the software, you lose access to any of your old files." It seems you lose editing access, you still can view them. Still not great, but I wanted to clarify.

That is the case with Office 365 too.