Ask HN: Why do so many web startups use subscription based revenue models?

4 points by lighttower 9y ago ↗ HN

This came to my attention when I read about Amazon Polly on HN. I wanted to convert a long text into an audiobook. A user commented on that Polly thread offering his webservice which for $ per month subscription allows doing this. However, On AWS I'd pay per word; why don't more companies adopt a pay for usage model? I didn't subscribe to his service because I only have 1 text to convert, not an ongoing need.

2 comments

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EthanBrady 9y ago ↗

I'm guessing it has a lot to do with projections. It's easy to predict revenue in upcoming months when people have signed up for subscriptions. Usage is much harder to predict.

Also, I imagine companies make a lot of money from people forgetting to cancel subscriptions that they don't use.

inputcoffee 9y ago ↗

If you store anything on the cloud, you sort of have to use a subscription model because they may have to keep your data around. They have to make sure the interface works, that bandwidth is paid up, that they are compatible with new browsers and so on.

That is why most cloud companies use subscription.

If you have a service which is a one off: you upload data, it processes it, and then you download it, it might be possible to just keep charge as a one off.