this post was submitted on 15 Dec 2023
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Wow… lots of people in here bashing the subscription model, but let me point out it’s maybe not as bad as you think…
If you sell a product under a perpetual license model (I.e the one-time purchase model). Once you’ve sold the product, the manufacturer has almost no incentive to offering any support or updates to the product. At best it’s a marketing ploy, you offer support only to get word of mouth advertising of your product which is generally a losing proposition.
Since there’s little incentive to improve the experience for existing customers. Your main income comes from if you can increase your market share which generally means making products bloated often leading to a worse experience for everyone.
If the customer wants support, you need to sell them a support contract. If they want updates you have to make a new version and hope the customer sees enough additional value to be worth upgrading. Either way we’re back to a subscription model with more steps, more risk, and less upside than market expansion so it takes a backseat.
If you want to make a great product without some variation on a subscription. You need to invest heavily upfront in development (which most companies don’t have the capital to do, and investors generally won’t invest in unproven software)
From a product perspective, you don’t know if you’ve hit the mark until people start using your product. The first versions of anything but the most trivial of products is usually terrible, because no matter how good you are, half to three quarters of the ideas you build are going to be crap and not going to be what the customers need.
Perpetual licensing works for a small single purpose application with no expectation of support or updates.
It works for applications with broad market needs like office software.
For most niche applications, subscription models offer a better experience for both the customer and the manufacturer.
The customer isn’t facing a large transition cost to switch to a competitor’s product like they would if they had to buy a perpetual license of it, so you have a lot more incentive to support and improve your product. You also don’t see significant revenue if the customer that drops your service a couple months in… even more reason to focus on improving the product for existing customers.
People ought hate the idea of paying small reoccurring fees for software instead of a few big upfront costs. But from a business model perspective, businesses are way more incentivized to focus on making their products better for you under that model.
Lots of words and lots of assumptions. You can improve a product and release another version with a paid upgrade, while the old version remains completely functional. If your works have made the software substantially better, people will be happy to pay for a new version. If you aren't adding real value, having the last version should not be necessary.
Updates can both add real value, but not be worth piecemealing out as separate purchases.
Your biggest assumption is that you don't have the drive to better a product if you don't have a subscription model. It's simply not true. You can and in fact must work to better your product if you want to stay relevant in the market and drive your customer to pay for a new version of your software.
Then, you proceed by describing the positives of a subscription model. While you're not wrong about those points, you are leaving out the negatives and forgetting that every business model would have symmetrical points to be made.
There are some context in which subscription model are suited for or in fact even necessary, but the harsh reality is that now every software is turning into a subscription model only for two reason: you can extract 10x 100x more money for your customer, and you can lock-in them in order to keep them paying. This has proven to be detrimental for the quality of the softwares too: software loose interoperability and compatibility, updates are so frequent and gimmicky that they can be a problem, etc etc.
Totally fair if you don’t like the subscription model.
But I am genuinely curious what you think I’m making assumptions about.
This sounds almost identical to the script our former VP of PM parroted. Everyone in engineering was vehemently opposed. But the C suite loved it, so we switched to a subscription model. Guess what, NEMs and govt clients don’t like paying subscriptions. No one does, but these are huge, powerful business entities we’re talking about here. You can’t force their hand. We lost 3 of our 4 biggest clients within 6 months. It took a massive amount of work to reverse course.
Just admit it. Subscriptions are nothing more than a blatant money grab. We (the SW industry) have been successfully releasing software and making fucktonnes of money for decades before some bean counter decided to get too greedy and come up with this bullshit.
I will absolutely give you that transitioning an established mature product to the subscription model is usually a terrible idea. Plenty of examples of that going horribly wrong.
As for subscriptions being a “blatant money grab” that definitely happens sometimes… notably when there’s a mature product with a dominating market share. The company already captured most of the market share, so they can’t get much more revenue from new customers, existing customers are satisfied with the version they have so they’re not buying any updates. Sales go down and someone comes along say just make it a subscription and keep milking the cash cow forever…. Yep, I admit it, that totally happens. The enshitification ensues.
But none of that’s the fault of the subscription model per se.
The same subscription model that becomes the incumbent’s downfall, is what creates a market opportunity for a new competitor.
A new competitor can coming in with a new product that was built with a subscription model from the start. The competitors product is cheap to try for a month, cheap to switch to with no big upfront costs. The newcomers can generally react much faster to customers needs than the incumbent. (Not because of the model, they can because they’re smaller)
Established software companies doing blatant money grabs happen all the time. Hell most of us are here using Lemmy because Spez attempted a blatant money grab on Reddit. Had nothing to do with the model.
Subscription model gets a lot of hate because greedy companies tried to use it as a blatant money grab exactly as you described. But it doesn’t have to be that way.
Subscription models make it easier for newcomers entering a space, which is good for consumers. It’s more compatible with agile development methodologies because you don’t need wait until you’ve bundled enough features together to market it as a new version worth upgrading to. It’s in your best interest to ship new features immediately as they’re developed.
It’s totally fair of you don’t like the model.
But the model itself isn’t the problem.
Shitty companies being greedy will always happen.
Fair enough. I think us and everyone else on this thread can definitely agree on that last point, at the very least. 🫡
I don't want or need continuous updates.
I want to buy something and have it be left alone without trying to steal more money from me for the thing I already bought.
The only possible valid excuse for a subscription to software is services that cannot possibly exist without meaningful spending on server infrastructure. If that's cloud storage as the core of the purchase of the app, computations that are literally impossible to do locally or rely on data that's expensive to maintain, a subscription is legitimate.
If it's anything else it's shitty and you're a shitty person for doing it. Sell actual upgrades when they're actually upgrades, without stealing access to what people bought. It's the only acceptable model.