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Subscriptions are the New Black

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Re: Subscriptions are the New Black

#21

Post by terrellm »

maxklein wrote: post #20
DenisM wrote: post #19

Earlier quoted context omitted.

People don't want to subscribe to stuff Should we assume that you talked to 6 billion people, or would you like to qualify your blanket statement?

Actually - I have some data. I had a product priced at $2 per month subscription vs $50 one-time fee. More people paid the one-time fee than the subscription. From talks I've had with people, people prefer to pay a one-time fee than a subscription.

I think the answer is "it depends".

$50 isn't a a lot of money to many people so your product could still considered an impulse buy.

If you look at a product that runs $25/mo, a user would look at $625 one-time fee. I'd imagine the one-time purchases would be much lower.

Re: Subscriptions are the New Black

#22

Post by DenisM »

maxklein wrote: post #20
DenisM wrote: post #19

Earlier quoted context omitted.

People don't want to subscribe to stuff Should we assume that you talked to 6 billion people, or would you like to qualify your blanket statement?

Actually - I have some data. I had a product priced at $2 per month subscription vs $50 one-time fee. More people paid the one-time fee than the subscription. From talks I've had with people, people prefer to pay a one-time fee than a subscription.

And among the people I talk to most prefer to live in Seattle. Is it representative of the people at large? Your generalization is completely unwarranted, at best you could derive that "among buyers of X most prefer one-time payment".

Re: Subscriptions are the New Black

#23

Post by davemc500hats »

just to clarify: the post was trying to highlight both subscriptions AND transactions, not vs. each other... they aren't mutually exclusive.

in fact, most likely a common model would be: 1) free for most users 2) low-cost txn for first paid use 3) convert initial txn users into frequent use / regular subscription later, but continue txnl model as well.

perhaps in mid-rant I failed to explain this clearly; possibly due to lack of sleep, or the cocaine-heroin speedball I shot up before getting on the redeye to NYC.

then again, maybe you guys just need to read that little part where I say "AND" between subscriptions & transactions, not just draw your conclusion from the headline... but I digress.

Re: Subscriptions are the New Black

#24

Post by davemc500hats »

yungchin wrote: post #11
anovaskulk wrote: post #2

Making your site a frequently used one is not solving the password problem; it's sidestepping it.

I guess he forgot to add this corollary: If you can't make your product a frequent-use product, use somebody else's sign-on system (Google, Facebook Connect...).

yes, that was the conclusion I was not-very-subtly suggesting.

Re: Subscriptions are the New Black

#25

Post by jessep »

jhancock wrote: post #18

McClure gets close to a good point but fails to convert. Here's his solution to password friction: "Make a brain-dead simple, frequent-use product. If users login a lot, then they don't forget their password." He then lists the following examples that solve this better than PayPal: Social Networks, Email, IM, Games, Music, Entertainment. I can't recall the last time I needed to use my password to login to Facebook, S…

I think he's implying that your site won't have a password. You'll instead use one of these services for both auth and payment.

Re: Subscriptions are the New Black

#26

Post by supermetroid »

I personally enjoyed the articles bombastic formatting and snarky tone, but I'm not sure the author says much of anything. The fact is, Dave's second assertion (that e-commerce/subscriptions is the new default startup business model) isn't based on more than speculation. He makes this second assertion with great conviction ("Get Dem Bitches to PAY You, G.") and I almost want to believe him--until I remember that most of both the media and content industries are still fumbling with whether or not selling subscriptions /digital content is a worthwhile business endeavor.

Also, the idea that a service's success hinges on a user's ability to remember a password is preposterous. Seems as if it could be somewhat of an obstacle when a service is first launched (Dave's early Paypal), but come on. Passwords have become commonplace, and for the most part--especially when money's involved--people don't seem to forget them. They may have when e-commerce was in its absolute infancy, but with the rise of ebay, Paypal, online banking services the password has garnered undeniable legitimacy among the majority of people. I have no data to back this up, but this isn't too outrageous a claim. Right?

Maybe I'm looking at this from the wrong angle.

Re: Subscriptions are the New Black

#27

Post by jhancock »

jessep wrote: post #25
jhancock wrote: post #18

McClure gets close to a good point but fails to convert. Here's his solution to password friction: "Make a brain-dead simple, frequent-use product. If users login a lot, then they don't forget their password." He then lists the following examples that solve this better than PayPal: Social Networks, Email, IM, Games, Music, Entertainment. I can't recall the last time I needed to use my password to login to Facebook, S…

I think he's implying that your site won't have a password. You'll instead use one of these services for both auth and payment.

I understand what he's implying. His case is thin. PayPal is huge and can easily afford the customer service required by noobs forgetting their password. Can you think of another way to operate such a business? His solution implies that google, yahoo, facebook should be the next PayPal in this regard. OK, so now those organizations have to handle this type of support.

Re: Subscriptions are the New Black

#28

Post by davemc500hats »

supermetroid wrote: post #26

I personally enjoyed the articles bombastic formatting and snarky tone, but I'm not sure the author says much of anything. The fact is, Dave's second assertion (that e-commerce/subscriptions is the new default startup business model) isn't based on more than speculation. He makes this second assertion with great conviction ("Get Dem Bitches to PAY You, G.") and I almost want to believe him--until I remember that most…

>> Paypal, online banking services the password has garnered undeniable legitimacy among the majority of people. >>I have no data to back this up, but this isn't too outrageous a claim. Right?

nope, sorry you're wrong & yes you have no data to back this up. even with "100's of millions of account", it's likely PayPal has never been used by a large % of internet users -- perhaps even a majority -- and it's certainly not used frequently (ie, >1x / month) by more than tens of millions of users. even without me being there for 5 years i'm pretty sure any recent eBay quarterly stmt will back me up on that (note: accts != users != frequent users).

trust me: "the forgotten password problem" is STILL a huge issue for PayPal today, as it is with almost every large site... even one as frequent as PayPal (or Amazon).

if you think i'm mistaken, i suggest you talk to any major tech blog site that has switched to using Facebook Connect or Twitter oAuth for comment authentication, and the subsequent increase in comment activity.

it's not too much of an extrapolation to draw a similar conclusion around 3rd-party auth integrated with payments (which is what PayPal has been doing for 10 years).

Re: Subscriptions are the New Black

#29

Post by davemc500hats »

jhancock wrote: post #27
jessep wrote: post #25

Earlier quoted context omitted.

I think he's implying that your site won't have a password. You'll instead use one of these services for both auth and payment.

I understand what he's implying. His case is thin. PayPal is huge and can easily afford the customer service required by noobs forgetting their password. Can you think of another way to operate such a business? His solution implies that google, yahoo, facebook should be the next PayPal in this regard. OK, so now those organizations have to handle this type of support.

>>PayPal is huge and can easily afford the customer service required by noobs forgetting their password

nope, wrong again. ARPUs for PayPal users are probably only around $5-25 per year (excluding the minority of fanatic eBay regulars), and you can easily eat up all of that cost or more in telephone customer support.

Re: Subscriptions are the New Black

#30

Post by jhancock »

davemc500hats wrote: post #23

just to clarify: the post was trying to highlight both subscriptions AND transactions, not vs. each other... they aren't mutually exclusive. in fact, most likely a common model would be: 1) free for most users 2) low-cost txn for first paid use 3) convert initial txn users into frequent use / regular subscription later, but continue txnl model as well. perhaps in mid-rant I failed to explain this clearly; possibly du…

If your point was that businesses need to start charging for their services/content, ok fine, no argument there. But much of your rant is in finding a solution for password friction by pointing out what a major cost it is to PayPal. You make no case as to how google/yahoo/facebook will solve password friction better than PayPal other than to say that users log into these sites more frequently and therefore remember those passwords better than they do a PayPal password. While users "use" these sites more frequently, they do not type their passwords much. This does not solve the password friction problem since transactions (with the exception of some types of micro-transactions) will still need a password at the point of committing to the transaction.
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