Subscription Hell

Just because a large percentage won't pay doesn't mean that putting the price high will maximise income. It's possible that at $10/month they'd get 5x the signups.

That said, increasing prices is hard; reducing is easy. If you're trying to figure out sweet spot for max revenue is it probably makes sense to start high and slowly reduce it until you find it. If you're on a rolling monthly payment and decrease everyones prices together, nobody will get upset.

At the time of this writing, all of the comments here are focused on content, but I want to touch on the author's bit about software:

> It’s not just Bloomberg and media — it’s software too. I used to write everything in Ulysses, a syncing Markdown editor for OS X and iOS. I paid $70 to buy the apps, but then the company switched to a $40 a year annual subscription, and as the dozens of angry reviews and comments illustrate, that price is vastly out of proportion from the cost of providing the software (which I might add, is entirely hosted on iCloud infrastructure).

I have noticed this as well, that a not-small number of software programs have turned from "give us one money for this version" to "give us slightly smaller amount of one money per month, but do it in perpetuity if you want to keep going with the data you've entered."

That, to me, is crap and is incredibly frustrating, especially when the subscription model is coupled with a data lockout threat. A task manager, a word processor, even a drawing program...none of these ought to require a subscription to be able to use. Sure, have a subscription service for something that needs upkeep, like a syncing service (but get out of here if all you do is just lump it into the user's iCloud storage) or a data feed. But it's almost insulting to say "we used to charge you $50 once, now we're charging you $29.95 per month forever (if you want to see those notes in two years, and no, we don't have a data takeout API); it's such a deal!"

I disagree with the author that subscriptions are objectively and inherently the superior model for web monetization. An unsung virtue of the ad-driven web it's is inclusiveness and strong worldwide redistribution effects. Everybody sees the ads, however the actual value of a pair of eyeballs is widely variable, by orders of magnitude so. It's therefore profitable to make the content free and distribute it as far as possible, to have the best chance of catching high value visitors that covert to ad action and revenue.

The net effect is that large swaths of society and indeed the world get the internet services for free, subsidized by purchases made by richer westerners, purchases and services they themselves could never afford. This model works well with the economic structure of web publishing, where marginal cost of serving an existing page to a new customer is essentially zero - even for the obese, media rich pages the author is referring to.

Once you move to a flat fee, this massive redistribution ceases. There is a clearly defined model of customer, say, those living in the middle class of an OECD country, that is targeted to maximize revenue, and a paywall is put in place that excludes 95% of the rest of the world. These are people for which 9$ might represent a tenth of their wage, and who might not even have access to modern banking through which to purchase internet services.

The open web was created by hacker ethos, but paid for using ads; a flat tax against widely variable income is strongly inequalitarian and exclusionary.

True. A subscription to Office 365 comes down to 99 Euros per years. Of course you’d pay maybe 150 every three years or so for a new version back in the days, but still that’s double.

Also, I wonder whether this will lead to a slower development of the software. Before you’d have to create a leap forward to impress people to buy the new version, if the old version was still good enough.

edit: disregard my comment below, as others have reminded me, the yearly charge is for updates and will not stop you from using it completely if you decide not to renew it, you just don't get any more updates. So this isn't the best example

> I have noticed this as well, that a not-small number of software programs have turned from "give us one money for this version" to "give us slightly smaller amount of one money per month, but do it in perpetuity if you want to keep going with the data you've entered."

Like Sketch App which used to be just US$99[1] and is now US$99/year[2]. Although in this example, "slightly smaller" doesn't apply

1. https://web.archive.org/web/20160416212244/http://sketchapp....

2. https://www.sketchapp.com/pricing/