Better yet, they don't have JS payloads with 0-days attached to them. Nor does HN engage in js miners.
I still hate adverts, but at least here its not a malware-fest. I still hate ads as they are parasitic in one of our most important resources: attention.
When I go to certain sites like Vox, I see repeated ads for women's clothing (wtf?, I'm a guy) that makeup around 40% of an article AND clickbait to other sites via Taboola.
We also have Launch HNs for YC startups, which are like the job ads in that they get a placement on the front page to begin with. After that they behave like regular threads though.
Which is an interesting issue that I have thought about recently. There are tons of services like this.
One analog of this phenomenon are loss leader products in retail. Loss leaders in grocery stores (sometimes produce or in the case of Costco, hotdogs and soda for $1.50). Loss leaders have been responsible for putting lots of small businesses out of business.
When enormous companies offer products for free, that others charge for, it makes me wonder where it all ends. Many internet companies have been put out of business by free services offered by the bigger guys.
A similar issue is the endless supply of people or businesses willing to take a loss on their product, either because they have VC money, some other revenue source, or because they are just ignorant. Google was able to lose money on YouTube for the better part of a decade, for example.
I once had a thriving business buying items at US postal auctions for resale. But the get rich quick bloggers eventually found out about the auctions and then, for years, an endless supply of clueless suckers just kept showing up and paying above MSRP for things like MacBooks and other high end electronics. Ya, they would lose their shirts, and never come back, but there were always fresh meat each month to do the same thing. So most of us that were actually making money previously, had to move on to other things.
It seems like this phenomenon could become more proliferated as some of these core internet companies get larger and larger.
Simple: Apple sucks at cloud services. They provide them because it is easier for a subset of their users not to have to think about getting a third-party service.
Google and to some extend Microsoft want/expect you to do everything in the cloud. Their sync clients are generally less reliable, do not support P2P sync, and do not do block-level sync. Google even syncs placeholders for Google Doc documents, rather than real local office files. Microsoft encourages people to create/open documents directly on/from the cloud (with its standard dialog boxes).
If you want to own your data and reliably sync them between your machines, Dropbox is the best choice. And probably they'll continue to be the best, because sync is their product and not some way to funnel people in other products.
I think it's more ironic that your example of a site doing it right is one run by a company with deep pockets that can afford for the site to not print money directly. That's not the future of the internet that I want. In fact, it's terrifying.
This misunderstanding is why the internet is gradually becoming more and more centralized. People don't want to pay money and they don't want to see ads. The only sites that can brave that reality are charities, sites that confer other benefits to the organization (like HN), and the few major services that people will pay for (like Netflix). Not much in between, and the sites in between were basically enabled by ads like the collaborative writing forum I grew up on.
Welcome to the economics of ad free websites (for now, at least).
A large percentage of people simply will not pay for website access, no matter how low the price. So you get your money from those who do, who value the service so highly that parting with it would be huge pain point for them, and, so Bloomberg assumes probably after extensive surveys, those who feel that way about their publication, will likely have 35$/month to spare for the privilege.
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.
The biggest hurdle is not price elasticity between getting someone to pay $10 versus $35, it's getting people to pay anything instead of something.
Look at the App Store as an example and how hard it is to get people to pay $1.
Besides the people who are willing to pay are by definition people who are willing to spend money - the same demographic that advertisers covet the most. Meaning they can't target their best customers for advertising.
> The biggest hurdle is not price elasticity between getting someone to pay $10 versus $35, it's getting people to pay anything instead of something.
I'm not doubting that's tough; but it's significantly easier to get someone to pay $1/month than $35/month. People aren't completely stupid; they won't just blindly pay any amount just because they'd decided they'd pay something.
Like I said though; if I was making this decision, I'd start high.
> It's possible that at $10/month they'd get 5x the signups.
I highly doubt it. Also, while it is possible that the people at bloomberg are so incompetent that they did not consider how to maximize their profits, I'm going to give them the benefit of the doubt and say that they did.
I never said it was likely, just possible. And I wouldn't question the incompetence of anyone these days; big companies make questionable decisions all the time ;-)
I think they idea is that they expect only a small percentage to pay the subscriptions. The rest may get one or two free articles a month, which for them counts as a lure to attract new customers.
They don't make enough off of subscriptions to make publishing worthwhile and if they give it away for free, the advertisers don't value the customers as highly. That's why free magazines like MacWeek and PCWeek forced you to take surveys to qualify for a free subscription back in the day.
Ha ha, I've also cursed Wired for all their ads, particularly at the beginning of the magazine. Them and the subscription card, though at least it can function as a bookmark.
You’re overstating the two options here. The choices might be to pay or see ads, but there is NOTHING requiring them to be “intrusive”. They weren’t intrusive in printed magazines, and publishers survived. Over-engineered attention-stealing data-hungry tracking ads are something invented in the Internet age, and I see absolutely no reason at all to include any of those features in the other option.
Even if we choose not to have things because they're expensive, it doesn't mean we should not complain about the prices. Companies make changes based on feedback so if there's good evidence that people think something is too expensive, the company may consider changing their prices or have offers.
I don't think people don't complain about stuff enough, we get taken for rides by big companies all the time while their CEOs take home massive pay packets. People should fight for better services and lower prices more; it works!
In agreement. I keep the site's I read to a minimum. Dose of world news, vc news, some gaming news, tech news. When I run out I browse hackaday. Maybe a total of 45 minutes if I'm really bored. The I have to start creating to entertain myself.
I purposely do not add new aggregator sites when bored. In fact my fallback (Fark) is woefully out of date. If I feel the urge to read that I immediately pick a side project and open it up.
We have way too many consumers in this world. Not enough producers.
Tho I do troll Craigslist for machinery when bored as well but hitting the limits on the amount of tooling my garage can hold.
I'd pay money for a Netflix-like service for newspapers. I know it's probably not as good for the newspaper business as the old subscription model, but it's pretty much the only viable model that I can see working.
Me and three friends worked on a similar idea at the YC hackathon a couple weeks ago. You'd pay us $10/month and we'd buy a lot of subscriptions to different newspapers. You'd install our chrome extension and when you came across a paywall, we'd autofill credentials that are just valid for one day.
We didn't win but it definitely piqued the interest of the crowd and the judges (Sam, Michael, and Adora). We're not pursuing it but hopefully others do.
This is a cool idea, but I imagine this isn't legal, right? Creating an actual business out of this would have to require buy-in from the content creators
I think it’s funny how everyone is surprised that Silicon Valley hackathon-goers don’t understand or care about copyright. Maybe they’re just “disrupting”!
Proxy and cache articles using a standard set of credentials from a set list of origin IPs, most likely. The traffic would appear as that of an average reader.
If it gains sufficient traction and was found to generate equal or more revenue for publishers I could see them willing to come to the table.
The problem I see with bringing publishers to the table is: How do you distribute revenue? Pageviews? That's what you don't want papers to optimize for right now. Equally? Hardly seems fair. Who decides which publishers are on Netscoopx? What ratio of subscribers to paper subscriptions should Netscoopx maintain?
Overall the idea reminds me of Grooveshark and Aereo simultaneously.
A standard for micropayment for content needs to evolve. Our relationships to publishers have changed substantially. I would be willing to pay per read from sources like The Guardian, New York Times, The Economist, etc, but I am not frequent enough to want to subscribe. For the citizen who wants to get their information from different sources across the globe and political spectrum, it gets unreasonable to expect subscriptions.
While something like Netflix/Spotify would be nice from a user/consumer perspective, there is both the difficulty of gathering everyone under one platform and the risks of having a single (or a few) number of brokers of news across the board.
We have a local news website that I think has a realistic model. When you view an article with an ad-blocker it shows you a dialog with a variety of options:
1. Whitelist the site
2. "Nah, journalists should go hungry" - this dismisses the popup and lets you read the article with your blocker intact
3. 5c - read the article ad-free
4. 10c - 1 hour of no-ads
5. 30c - 1 day of no-ads
I've converted to US cents, but even in local currency think these prices are extremely reasonable, and I'd love to see more sites offer similar rates
Does the service require you to maintain a wallet with them? As in, you deposit money and transactions are drawn from your deposit? Otherwise, I can't see how accepting such a low amount per transaction could be feasible.
> You suggest that the lack of even mentioning micropayments leads you to dismiss the article.
I didn't suggest, I stated it baldly.
> But then you point out that there is no viable micropayments platform.
No I didn't. I mentioned one that is defunct, and one that is popular but that I have a problem with personally. The article I linked to about Gratipay references Liberapay (https://liberapay.com/) and Open Collective (https://opencollective.com/) but I didn't want to mention them because I haven't checked them out myself. There are probably others.
> Doesn't seem like there's much to mention beyond "yup, still doesn't exist."
And yet this low bar is unsurmounted?
Wrote a whole article about "Subscription Hell" yet won't step over to the watercooler full of lemonade.
> But then you point out that there is no viable micropayments platform. Doesn't seem like there's much to mention beyond "yup, still doesn't exist."
Sure there is: "Micropayments are fundamentally infeasible".
Which is to say, payments are trivial to do. There have been dozens and dozens of startups doing online payments in various schemes since the beginning of the internet. But the fraud problem is not solvable on that kind of scale. Batching payments such that you buy one "thing" for at least a few dollars gives some level of assurance that one human being looked at the transaction and that the seller gave enough thought to be sure it was worth selling as a unit.
That all falls apart when you get to "one article" scale. You want this to be a purchase that the user doesn't even thing about (because seriously if I have to stop and think whether I want to pay $0.13 to read an article the answer is "NO"). But without that promise of thought it becomes impossible to reasonably authenticate a transaction. Users will be absolutely flooded with fraud schemes tricking them into OKing these tiny things.
Larger donations have a higher risk of fraud and chargebacks, so on average it will cost Patreon more to handle this. Additionally, it's not uncommon for credit card companies to charge a fee, even if Patreon wins the chargeback request. If a user donates $10 to a specific creator and initiates a chargeback, who should end up paying the chargeback fee and the donation amount (if the chargeback is successfull?)
You can't charge the user who initiated the chargeback, especially if they were successful. The only thing you can really do is ban them from the service in the future. So, do you take those fees from the creators who received the donation, or do you spread the cost among other creators/donors?
You can't realistically charge the donors. If I were to go to Patreon to try and give someone $5 but was told, thanks for donating, but we're going to charge you an extra $2 because that's the average cost per donor to provide the service, develop new products, advertise, etc., I'm not going to donate. Most people won't.
So do you charge the creators? Let's say the cost per creator is $20/month. If a creator only earns $10, do they then actually owe $10? What creator is going to use the service if they might end up owing money?
The answer, of course, is you figure out the average percentage of a transaction you need to take. You do this because it provides both donors and creators clear information on how much money goes to the creator, what goes to the payment processor/credit card provider, and what percentage goes to Patreon.
But I mean, if you really think that's not a good justification, why not start your own competing option with a business model you think is more fair.
Maybe a pay per click business model where you get a monthly bill from your IP for your internet activity in websites that require payment is an alternative
We already tried this with pay-per-SMS, 1-900 lines, roaming charges, data overage charges and premium content on cell phones (ringtones, wallpapers, etc) and it was a nightmare-- before you know it your bill is $1000.
Its also a nightmare for those of us who have to keep a close eye on AWS spending. Someone spins up an x1-large you didn't notice? Too bad, now pay us.
Its a terrible model for consumers in general. My wallet should not be open by default.
I am not sure why it is so fundamentally difficult for publications to understand what people want.
The issue many people, myself included, have with subscriptions are that you pay $x / month whether or not you read that month's product. And whether or not you read every article or just one. So for me, as a consumer, my "price per article" goes from small to literally infinity (pay but read zero articles).
Now the pay per article model works so much better. You can charge me to read a single article but I pay nothing if I read nothing. This is the model that blendle.com uses and my experience was that even though their "per article" price was much higher than I originally thought reasonable (9 cents to 50 cents) I was paying basically $50 a month for subscriptions to the publications that I read (WSJ, Economist, NYT, WaPo, etc) and with Blendle I end up putting maybe $15 or $25 per month into my Blendle wallet. So its half as expensive for me and I still get to read, advertising free, any article in those publications. Blendle's money back if its click bait policy is the clincher. When you read a lemon you get your money back.
I win (save money) they win (they get paid for their journalism).
This is my issue with most subscriptions too. The price has to be set based on the average use, which makes it really expensive for the infrequent user (and ultimately this means less conversions, yet nobody seems to care about this?!).
I've had the same gripe with games for years. I stopped paying for Xbox live and World of Warcraft because they're the same - if I only played for a few hours in a month, I've paid over-the-odds. I can't predict in a given month how likely I am to have how many hours, so I end up paying them £0. They could get more money out of me if they had a better PAYG or tiering option.
Obviously (in these cases) there are market segments that favor all you can eat subscriptions and those that favor à la carte. It makes sense that for most things the heavy users get the sub and the light users get to pay for what they use. However I thought of a counter example. Spotify. I would normally be a light user of music. I had some CDs in the 90s but lost interest in the whole thing by the time I graduated Uni. However it’s still nice to listen to some music sometimes. However I couldn’t imagine being able to buy all the singles I listen to in a month for less than €9.
That’s the secret. Price your subs so it’s a better offer for the lightest of users. Not hard in the music business that was ripe for disruption.
And I think that’s the message in the article. Subs themselves are not the problem , but the way they are priced . (Although the fact that he spends so much money on subs kind of negates his argument. It seems like people like him are happy to pay which reinforces the soundness of the business case).
Incidentally I subscribe to ms office even though I would never have paid a one off fee for it. I think it’s cheap enough to justify its value. I also subscribe to Netflix but should really cancel. In europe there is not much content there. When I first got it i watched maybe 4 or 5 interesting documentaries now I never see anything there worth watching. I might unsubscribe after my daughter finishes binging gravity falls. (She’s not a big user either we both find YouTube more interesting and relevant than European Netflix)
Subscriptions usually work better when the variety of content/product offered is big. Amazon, Netflix, Spotify, NY Times; these companies offer a lot of content from a lot of producers. In contrast, most media subscriptions offer you a few articles per week that is worth of reading. The rest is usually written by people who are not necessarily more knowledgeable about the topic than their readers but only have the skill/patience of writing an article about them.
I tend to prefer subscriptions for things where what I'm consuming is somewhat throwaway; so things like TV, films, books (things I'd never want to revisit/rewatch). I don't prefer it for things I might like music though. Some years ago, I ripped all my CDs (yeah, it was a lot of effort) and said I'd spend up to £10/month on music rather than a Spotify sub. I don't spend anything like that, but still tend to pick up all the new music I like. At any point I could stop buying new music and still having a big library, so I think it's worked out well.
That said, if Google Play Music Unlimited was either half the price (£5/mo) or was shareable with my wife for the current price, I'd probably have a different opinion!
This is one of the underappreciated benefits of ads: infrequent or freeloading users were subsidized by the users that converted. Every day you are being subsidized by users that don't use adblockers. Eventually this will end and you'll be left with no option but to complain about spending money, but what did anyone expect?
> Every day you are being subsidized by users that don't use adblockers
I guess I'm a subsidiser; I don't use an ad blocker (for many reasons). I'm also slightly of the opinion that people using ad-blockers have made things worse for those that don't :(
I don't mind ads - I don't even mind advertises tracking some things to give me more relevant ads (heck, I'd tell them what I like to get more relevant ads).. I do mind obtrusive and noisy ads, and the security risks that tend to come with them (and other third party content) being slapped on every site with no thought though; and for some content I would pay to a reasonable fee to remove them.
This can be relative, in some cases at least. My go-to notes app is Bear and they charge EUR14/Year. For me that's a decent price to keep the software existing in the long run.
How do they win if they end up making less money? What you are paying for is journalists doing research every month to produce those articles so you could access them on demand. If you want that on demand access you need to pay them for the work they do every month not the work they do one off.
I think the idea is instead of having 1 user pay you $30 a month, you have 10 users (or more) paying you $3 a month, you end up with a net win (even at equivalent of $30 a month of revenue because now you've had more eyeballs).
The problem is most publishers still don't necessarily believe this model or think it'll work, or think it's too risky. Blendle was able to do it because they started their own platform and essentially required little work from the publishers themselves to integrate (Blendle devs did most of the work to import the content, publishers just had to agree), and the Blendle solution doesn't "rock the boat" for these publishers, i.e. doesn't change existing users on their web site's behaviors.
> I think the idea is instead of having 1 user pay you $30 a month, you have 10 users (or more) paying you $3 a month, you end up with a net win
Intuitively, I believe it's much easier to find one person to pay you $30 a month for quality journalism than to find 10 people to pay $3 a month.
Neither of us have data to back our assertions but my argument is that the people that care about and read quality journalism are well off people and the marginal cost of paying $10 or $30 a month is not significant for them.
>Blendle was able to do it because they started their own platform and essentially required little work from the publishers themselves to integrate
I've never heard of blendle until reading the comments in this topic but just as a comparison, the WSJ has 1,270,000 digital subscribers paying $45 a month. Blendle has 550,000 users.
One of the challenges is that if you look at this as a single consumer / single producer model it is very hard to see the economics. That is why internet advertising is also hard to see sometimes. Nearly everyone I know tells me "How do they make any money on internet ads? I never click on them." And for lots of people that is true, but for another population it is not true. And when you look at page views as a 'population' of say a million different people, and 1% of them, or 10,000 of them click on an advertisement that pays $0.10 per click, that is $1,000 of revenue from that one article. And if the marginal cost to host a single article on a web site is $1 per month, there is tremendous leverage there.
So this model insures that nearly everybody that reads and article has paid a small amount. This is more reliable income than Internet Ads even with 99% of the readers not clicking. And the article lives forever, and as we see on this web site some articles get cycled through popularity again and again every couple of years. People who have blog sites and track metrics see this effect when someone puts them on Reddit (for example).
A static article page can service a lot of page views with very little hardware. Nginx on a current server can serve the same article up at 50,000 page views per second if there is enough network bandwidth and the article is on an SSD. Hosting costs go up when you add a bunch of dynamic content but much of that can be hosted on CDNs and distributed to the edge. Done with any mount of care and planning and it costs little to host material on the web.
You have no data to back any of your hand wavy assertions. You are not smarter than the people that decide the business model for these publications. People are not willing to pay 10 or 20 cents to read articles that they clicked on a whim. We already know this from the app economy.
Actually I have quite a bit of experience around this. I've been working on understanding the economics of information since the mid 90's when I helped start an online web magazine about golf of all things. With the help of some grad students at Berkeley's Haas School of business we came up with the core mechanisms about how information can gain value and how it can lose that value. Also a number of ways to capture that value without destroying it in the process. The marketing person from that web property went on to Apple where they instituted the 99 cents per song music model that came to dominate music sales. The arguments against are familiar, "We sell an album not a song because those songs that aren't hits won't support their production costs.", "All songs will be tailored to sales and music quality will suffer.", "Labels (and by trickle down Artists) will make less because even buying 3 songs is less than they would get buying one $15 album." Instead the music industry flourished in the new system and more people got to experience more music more easily than ever before.
It isn't a question of smart or not smart, it is understanding that the economics of goods models we developed during the industrial revolution are not directly translatable to the economics of information.
I've been a fan of Blendle from the start because based on my research to date, I knew that if they could be operationally efficient enough, they would be able to facilitate per article transactions in an iTunes like model. And if they could do that it would have a larger impact than iTunes did on music. They continue to hum along and I continue to use them for that.
The "App" market is interesting because as I characterized information, Apps don't qualify, rather they contain algorithms. Because of that, their value is created through novelty rather than being intrinsic.
One con of the pay per article is that it siphons money into the money making kinds of stories. The sports and celebrity pages can do a lot of funding for the slow grind investigations that are important for holding those in power accountable.
It’s not like an a la carte model couldn’t also fund profitless journalism, but I think it might push things even more in that direction.
I think they do understand what people want, but they have a healthy, eat your vegetables kind of take on things too.
How about before I purchase there's an excerpt and the number of words that lay ahead? I mean, it couldn't be that hard to distinguish comprehensive articles vs the norm.
> How will you evaluate whether an article is going to be worth the price?
I wouldn't know. And if it wasn't worth it, I probably wouldn't purchase a future piece from the same reporter. That said, there could be a review system. (Just brainstorming here)
This model already exists with those damned "click here to continue reading buttons". Just charge me a few pennies when I click that button and we're good. Give me a little browser based wallet that I can re-up with my "news" budget on a regular basis and I'm a happy paying customer.
Charge me $30/month to read your site at all (bloomberg) and you're never making a cent off of me again.
I think the new economy, some CEOs and CFOs will make terrible decisions, and lose their market share to those who provide the right price for the value, or understand what the value even is.
I don't think this is right. Even if a site goes for a subscription model, it will still be obvious which pages people click the most on, and so they will have a strong incentive to increase sports and celebrity reporting to bolster their subscriber count. The exact same incentives are there with pay-by-page. You still have to charge enough for your writers to eat, and you have the exact same incentive to tell them to write clickbait.
For some things I prefer the subscription model because of the incentives it creates, every article I read or day that I go to a gym lowers the overall cost-per-visit. With a per-article or per-visit model, I would be disincentivized to read and go to the gym. It also frees me from repeatedly making the same decision every day, do I value $1 more the content of this article? Do I value $10 more than going to the gym right now?
For me the nice thing about blendle is cheap access to several sources, if they have a prepaid plan that charges monthly at $10 for 60 articles (16c/article), I would do that.
I think it depends a lot on if you experience journalism as more similar to a gym (exercise for your brain) or netflix/hulu (entertainment).
Most people would complain at paying more than 5% for reading 5% or the articles though, and the exact pay for what you use model doesn't cover any costs that are fixed or otherwise not equally spread over each item. While this doesn't count for a fair number of individuals, people as a unit will neither want to subsidise everyone else nor want to pay the fixed costs when they use very little (why should I pay 1x for a unit when it is 2x for 4?). You can present it as a discount for bulk, but only to an extent.
> The issue many people, myself included, ...
> my "price per article" goes from small to literally infinity
This is a problem for the producers too if they try a pay-per-unit model instead: their income could waiver unpredictably between more than enough and literally negative (not meeting the production costs). Either way, someone is gambling.
> Blendle's money back if its click bait policy is the clincher.
That sounds like something I'll have to investigate. Thanks for the pointer.
I don't think that model will work, honestly. There's friction anytime you ask someone to spend anything, even if the price is de minimis.
Look what happens whenever a city adopts a $0.05 plastic bag tax. When Washington DC did it, plastic bag use dropped by 50% - 70%. I'd see people that just spent $30 bucks at the store with their arms overflowing with stuff rather than pay that extra nickel.
I'd expect prompting users to choose whether reading a story is worth $0.05 to them every time will cause them to read and engage significantly less.
> I'd expect prompting users to choose whether reading a story is worth $0.05 to them every time will cause them to read and engage significantly less.
The example that gives me a little bit of optimism in the long run is power: people don't really have a problem with the fact that their power bill is pay-per-use, and if it discourages them from unduly wasting power, all the better.
But the problem you describe is still significant: people are _already_ used to that dynamic for electricity, and it's not clear to me how to get over the hump where they'd treat micro transactions for publishing in the way you describe. Most people aren't remotely rational enough to realize on their own that stressing over each minuscule payment has a cost of its own and coming up with a better strategy for handling it. (In the electricity example, this is the difference between 1) calculating the power usage of each device in your house and considering whether you want to pay a few cents before flicking that light switch or 2) conserve in common sense ways and adjust if necessary based on your monthly bill.)
> When Washington DC did it, plastic bag use dropped by 50% - 70%. I'd see people that just spent $30 bucks at the store with their arms overflowing with stuff rather than pay that extra nickel.
Case in point... This may be one of the stupidest things I've ever heard. My city has had a ten cent bag tax for a long time now, and the way everyone reacts is 1) carry it in your hand if it's one or two small things, 2) pay a freaking dime if you have too much stuff and be slightly more likely to remember your reusable bag next time.
Do you mean that the usage and the monthly bill are separated in time? I don't see why the pay per article couldn't work the same way. The bag tax example was ludicrous for a different reason: namely that carrying multiple loads in your arms is more than worth five cents for all but the absolutely poorest Americans.
Regarding bags, that's a strange reaction given that everywhere else I've heard of that introduced a bag tax has seen usage drop dramatically. It's not the price - clearly most people can afford what they charge - it's the psychology that makes you stop and think whether you really need a single use bag for what you've bought.
Oh I completely agree. It's extremely effective as a reminder and has been extremely effective in my city. I think it's great example of damn near Pareto-efficient govt policy.
But when I _do_ forget my reusable bag for whatever reason and have an unwieldy amount of stuff to carry, it would be beyond idiotic to ride that psychological effect all the way into the absurdity of stuffing my arms full of thing (I gather from the original comment I responded to that he wasn't talking about carrying an item or three).
Regarding bag tax, I have trouble believing this is more than your own anecdotal observations, do you have any sources to back up that claim? Most cities in Europe charge a lot more than 0.05 per bag (Austrian supermarkets generally charge between 0.25-1€) yet most people just bring their own. I buy the more expensive variant (cloth material) which survive about a year.
What are you doing with those? I have one reusable bag which is 11 years old now. I just throw it in the laundry about once a year and it's as good as new.
I use them for everything... they often end up as bags for recyclables (e.g. bottles, metal with sharp edges, paper) so they get chewed up fairly fast. Even if I only use them for exclusively shopping, I go 1-3x per week (~100 excursions/year) and when it's warm we throw a lot of BBQ parties so some of those trips are overloaded with heavy stuff which ends up cutting corners in the sides.
And then you have those magical psychological effects at different price points. I remember when almost every piece of "shareware" was $20+ and most full "programs" were $100+. Now people balk at apps over $0.99 and even opt to have a ton of their personal information sent off to a stranger to avoid that price.
The tone of the engagement matters, too, because it works on psychological levels most people aren't aware of. It's essentially brainwashing. To me, "Buying" means assessing and confirming value, "Upgrading" means reassessing the value and how relevant the new features are to me, and "Renewing a subscription" means to keep the status quo and automatically remain up to date. Upgrade notifications feel like nagging, while subscription renewal notices are almost alarming.
Nag all you want because I can just use what I have now. Yay! I upgraded and now all the icons are in different spots. Maybe they added something interesting. I hope it still reads my old files.
End the subscription and who knows what happens. Yay! I renewed my subscription and now all my most precious files are no longer in danger of being wiped from existence. Subscribing sure saved my butt. I'm so glad I did!
Overall, though, I think the subscription model exists to take advantage of inattentive customers, which makes up the bulk of any user base. A person forgetting to cancel their subscription is as good as a new subscriber and there are all sorts of situations where that can happen to anyone. Hell, those are probably the same customers that didn't notice when a new version was released, so the company even makes up for missed upgrades. I have no real data to back that up, but it fits with a lot of personal observations.
> Overall, though, I think the subscription model exists to take advantage of inattentive customers, which makes up the bulk of any user base.
This may be true for some services, but I don't think it's true of the most successful services. Think about Spotify and Netflix, most users are fully aware of their subscription.
> Now people balk at apps over $0.99 and even opt to have a ton of their personal information sent off to a stranger to avoid that price
Yes! This is extremely puzzling for me and I would love to know why it happens. I am mostly free from this and do not think about trying a $1 app any longer than I do about buying a cup of tea (and always pay for an ad-free version if I still using the app a week later).
However, I am in the minority: hearing this my friends roll their eyes "you are paying for an app you may not use long term? You must be rich. Look for a free app instead, man".
It would work if the model used preloaded crypto payments where all you had to do is see how many tokens something costs and have them deducted automatically by clicking the article read button.
My purchase of <$2 apps in the Google Play store went up tremendously when I could do it with just a fingerprint read instead of a full password entry.
The amount of money I spend with Amazon's one-swipe checkout is obnoxious.
Ask me to give you my full address twice and manually enter a credit card, even if you have an item I really want? Nope, probably not doing it.
I feel terrible for all those companies which don’t analyze their shopping funnels. The simplest checkout experience should require the minimum friction. What ends up happening is that they want to collect ridiculous amount of customer data in the hopes they’ll use it some other day.
If you could click a button that says "5¢ to Read" and have it work immediately, I think the problem would be solved. But this would either require some sort of browser-based wallet or a wider adoption of cryptocurrency.
There has been a LOT of effort put behind micro transactions for publishing, from companies that have all the resources and incentive in the world, like Google. The market simply doesn't want it. The average consumer isn't remotely rational enough to amortize a subscription cost and compare it to a unit cost. The way they process the incentives of a subscription is more like: "once you've reached the threshold where you consider the subscription worth it, completely forget about the fact that you're paying it for the purposes of assessing costs". Micro-transactions, even for tiny unit prices, feel like a cost upon every use.
You or I may prefer the microtransaction model to free with ads or subscription-based, but I suspect there's a lot about the market that we'd prefer was different, and that's because we're not typical of the market.
> There has been a LOT of effort put behind micro transactions for publishing, from companies that have all the resources and incentive in the world, like Google.
I feel I used to follow Google quite closely before and I cannot remember seing any hints of this.
My feeling has rather been that any form for paying has been looked at as second class compared to ads at that company.
Youtube Red still isn't available here and I haven't heard a thing about the idea they had last year that we could pay to avoid ads.
> both Google and Facebook seems to prefer ad revenue over payments.
This is exactly the kind of conspiracy-theory mindset I was talking about in my upthread comment. What reason could they have for preferring ads, given the extra risks (esp legislative) and PR issues associated with it?
As I said, Google (I can't personally speak to Facebook) has put effort behind getting micropayments off the ground in a couple different formats, but there're substantial hurdles and substantial pushback on the part of publishers. The fact that they're not jeopardizing existing revenue by forcing pubs to do things they don't want to doesn't mean that they prefer advertising revenue per se.
> This is exactly the kind of conspiracy-theory mindset I was talking about in my upthread comment.
This is however unneccessary IMO. Im referring to observed behaviour. I might be wrong but calling it a conspiracy-theory mindset doesn't help.
> What reason could they have for preferring ads, given the extra risks (esp legislative) and PR issues associated with it?
I don't know but if I had to guess Googles infrastructure and organization is heavily optimized for it.
> As I said, Google (I can't personally speak to Facebook) has put effort behind getting micropayments off the ground in a couple different formats, but there're substantial hurdles and substantial pushback on the part of publishers.
Ok, so now we are finally talking.
So the reason I couldn't "buy the ad spots" and sponsor writers of tech blogs (and here I'm referring to personal blogs, not news outlets dressed up as one) was because "publishers"?
Do we really think blog owners with google ads would complain if parts of their revenue came from users who hadn't had to suffer ads?
I can see one issue here and that is a lot of sites would probably try double dipping by trying to install a second ad network.
I'm honest but a bit annoyed here: I guess it is because Google used to be focused on creating good products for me but now it is about whatever publishers want.
Edit: also this doesn't explain Google's hesitation to introduce Youtube red, does it? Or are publishers also active in deciding what Google does on their own properties too?
Conceptually it's exactly what you'd want, but sites had to opt-in to "some weird experiment" instead of Google rolling upgrading their adsense TOS for a year, and then rolling this out on all sites that use adsense.
Eep, I may have inadvertently been referring to information about internal trials. Suffice it to say that a public offering isn't the first step to trying out a product direction, nor is it the only way to get feedback from the market (given that a tried and failed public product incurs substantial costs).
EDIT: thanks to the downthread comment, I see that the pilot I was thinking of apparently became Contributor. This is pretty much exactly what many in this thread are talking about, with the significant difference being that there are few participating sites, and the ones on there are generally targeted at the kinds of demographics who care an unusual amount about avoiding ads. The reason there's barely any buy-in on the content provider side is because most sites know that their readers wouldn't like it.
Here’s the problem with paying per article read: The vast majority of people likely don’t want to read articles so much as they want to say, “I subscribe to The NY Times.”
Netflix released data showing that people added documentaries and art house movies to their queues but never watched them. Instead they watched the same action movies and comedies over and over.
It’s the same reason as why gyms charge per month not per visit. What people say they do and what they actually do is barely connected at all.
That seems counter to what makes moviepass so successful. I pay a fixed monthly cost, and now the incremental cost of each movie is $0. Decoupling the consumption from the payment changes how I think about going to see a movie. It seems like consumers may prefer this model, at least with regards to movies in theaters (moviepass), movies and tv at home (netflix), and music (spotify).
Fair enough. The comment I was replying to was trying to make a point that consumers don't like a la cart models, so I think the consumer side of moviepass was the pertinent feature (they're wildly successful in terms of people loving it). It may suck for moviepass's finances, but as a consumer it's great and the $0 incremental cost has changed how I think about going to the movies. You could argue that the bulk of that happiness is that I'm just happy I'm paying less, which is hard to introspect. In that regard, maybe a profitable biz like netflix is a better example.
But then I realize that artists are complaining about getting screwed by spotify, studios are jacking up prices on netflix, and even services like classpass are changing. I wonder how many (if any?) of these subscription a la cart businesses have actually reached equilibrium.
You have to question a business model which only turns a profit when customers are paying for something they don't need. Unless they can negotiate favourable deals their only path to profitability is delivering no value to a high percentage of subscribers.
On the flip side, sometimes to a service's detriment. I think this model works well for MoviePass, Netflix, Spotify, but MasterClass recently shifted to an all-you-can-eat subscription model (before you paid per class), and even though the service is the same and the price is cheaper (for me), my interaction with the service suffered. Before, I'd carefully carve out time for a MasterClass I was interested in, knowing it was a big commitment in time and dollars. Now I can just dip in and out to anything on offer, and that's exactly what I've done. My engagement has gone way down because I'm not committed to an individual class in the same way.
I've had a subscription to PluralSight off an on for years, but I recently started paying for one off videos from Udemy. I think I like that model better.
We do the same with app subscriptions. I may go a month or 2 not using an app. It's always made me question the subscription model. There are times I won't subscribe where as I would have purchased the app for a one time fee.
I love the idea of blendle and i keep trying to use it, but unfortunately they don't make it easy to find articles.
You can scroll through their list of recommended articles, but if you already know the article you want to read (if, for instance, i find a WSJ article on HN that i want to read) there's no easy way to pay for that article on blendle. They need a tool that lets me paste in a canonical article URL and get the corresponding article on Blendle.
The problem with individual access purchase is that (usually) I don't know if an article was worth reading until I have read it. Not every issue of The Atlantic or the New Yorker attracts my attention but enough go them do so so I have a subscription.
It was a matter of time that subscription plans hit the same level of annoyance as online ads. But, subscriptions have a significantly heavier impact than ads.
You cannot netflixify journalism. It's different to movies or music. Journalism is not art. The online subscription business model doesn't work for journalism, because alternatives are far more easily accessible than print media. News are not unique works, news articles share the same base - things that happened anywhere in the world. Why should I get multiple subscriptions then?
My dad subscribed to both "The Edmonton Journal" and "The Edmonton Sun". Why? Because each had it's own bias and perspective on current events. What you're describing is not only not new, it's literally the dominant business model for print journalism for the last 100 years. Will it translate to the internet? I guess we're about to find out.
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!"
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.
I like that you mentioned Office 365 because I see that as "subscription done right." You can still buy perpetual licenses for the components of Office, you can easily store the data you created with those components locally, and if you stop paying for Office-as-a-subscription the same programs still let you view (but not edit) your data.
Carrot Weather App is another good one. Pay $5 once to get a really polished weather app with some basic "cloud" functions thrown in, like notifications to a phone device, some fun "achievements," and a pretty good weather data feed. If you want the super-accurate feed or if you want more advanced notifications and mobile device access (e.g. repeatedly on your Apple Watch), pay up for the subscription because it costs the dev more. And, if you stop paying, that $5 you initially paid is still valuable because the underlying app still works.
Jetbrains also has it done "right" I think... yearly license fee... and the version at the time of payment is "perpetual" while you get to continue getting updates as long as your license is "current".
Stop paying? When you aren't "current" you can either pay up... or downgrade to your perpetual version "owned".
Conversely, I find Carrot Weather ridiculous when Dark Sky is $4 one time and uses the exact same data source. They (DS) don't try to gouge you for Apple Watch features, which I interpret as "they're probably rich so why not?"
$4 a year (or $10, if you don't dismiss the 'ultrapremium club' popup and buy that by mistake) plus the $5 one time is not remotely what I would consider worth paying for a weather app unless Carrot was out in the wild building weather stations.
You'll also note that Carrot's website nor App Store description even mention the existence of this buy-up (except on the support page - but why would I look at the support page for an app I was thinking about buying?) or the pricing. They also deceptively show a photo of the Apple Watch showing weather, which is technically correct (the best kind of correct) - but the Apple Watch doesn't update in the background (or give you weather notifications) unless you pay for a subscription. Because weather apps that don't update are really useful.
Also, it doesn't "cost the dev more" to send updates to a watch instead of the phone (they're going through the phone anyway,) so I don't buy your justification for paying more for it. It's just a way to market segment and try to scam more money from people who have already paid above market for a weather app. You get Weather Underground data with the 'cheap' sub... but only on the phone. If you want it on the watch, you have to get the expensive sub. This also makes no sense. There's no way in hell wxug is charging extra based on the target device.
It is also surprising how much other subscriptions cost compared with Office 365. Office 365 contains the most complete office suite in existence, probably larger than many operating systems. It also includes 1TB of OneDrive, and free monthly Skype minutes. And the 99 Euros that you quote are for five persons.
Most subscription software is a terrible deal in comparison. I have tried to avoid subscription software as much as possible. But we have a family subscription for 1Password because $REASONS. We pay $60 per year for (in comparison to Office) a small software product, with small cloud storage, of which we only need a couple of megabytes for storing encrypted passwords.
Also, I wonder whether this will lead to a slower development of the software.
Most likely. Once you are locked into some proprietary data format, it is often more expensive to move to an alternative, and it is easier to subscribe. Once a substantial part of the user base has a subscription, there is no more need to entice users with a new version.
> Subscription software does not benefit the user.
Depends on software, subscription and benefits...
I think Office and Jetbrains are softwares done "right". They continually release updates - quarterly?... continually add new features...
I think more companies get it "wrong" than get it "right"... but done right, the company has reasons to keep developing - no new stuff? no continued monies. no new monies.
There was some low hanging fruit for companies to create subscription plans who shouldn’t have been adding them. The more subscriptions your target customer has, the harder it is to convert them on the new one. For the business side the ceiling is a lot higher, but for consumers there is a very low limit.
Each market is different, but when I look at an area like Photoshop or Illustrator, the competition keeps getting better. In some areas they aren’t even competing.
The workflow of a game artist will have them going through a bunch of different products to get to an end result. A lot of those steps can have alternatives. If a vendor has some proprietary format that doesn’t work with anything else they never even get a user base.
If a subscription is funding continuous development, and th company is doing a good job, and I use the software daily it doesn’t bother me. If I use it twice a year, I’m going to be looking hard at alternatives.
Its going to be a real problem for Adobe. Their biggest apps (PS/AI/IND) haven’t had real upgrade worthy updates in years. Competing apps like Affinity Photo are pretty much 1 to 1 replacements. Eventually some significant portion of Adobe’s core users are going to go elsewhere.
It's not even that - they basically are back to just the isolated professional market now as the majority of built-in apps do many of the enhancements that the cheaper subscription licensees would have sought out Adobe for. No one except aspiring professionals really needs the majority of Adobe projects to do competent looking amateur work anymore.
Subscriptions from Adobe were meant to soften the initial sale, but Adobe's own rigidity with the subscription schemes on release shot them in the foot, as organizations had to wait a long time for a model to come out that met the needs of small/medium businesses who previously could have made due with a few perpetual licenses. The storage was pretty sad even at the time of the switch, so that wasn't a compelling sales point either.
I think Adobe just didn't pull the numbers they were expecting when they switched, and now they're stuck with this model and infrastructure they don't know what to do with.
>Creative revenue in the first quarter of fiscal 2018 was $1.23 billion, up from $942.2 million in the first quarter of fiscal 2017 and representing 30% year-over-year growth.
So not only are they still selling, but subscriptions increased 30% over the past year. Clearly it's working for them so much that they're finding success doing the same thing for the document cloud:
>Document Cloud revenue in the first quarter of fiscal 2018 was $231.0 million, up from $195.9 million in the first quarter of fiscal 2017 as we continue to transition Document Cloud to a subscription-based model.
> Most subscription software is a terrible deal in comparison.
This is actually my way of making decision to buy a subscription-based product. It must provide comparable service. Office 365 single user license costs around 70$/year. Now:
- Evernote is asking 60$/year. Seriously? One note is already offering same service with 1TB storage.
- Pocket is asking 45$/year. WTF? It is just a bookmarking service which is already offered by one note web clipper.
- Proton mail is asking 50$/year for 5GB mail box. Dude, Office 365 offers 50GB add-free mail box. However NSA is able to read your emails, which is not the problem here. At least MS is not selling my information to advertisers.
Other than streaming services, It is getting really difficult to find any subscription-based product that gets close to Office 365.
> 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.
I am not sure if that would be bad, though. Often enough, I feel that software vendors either just change the UI so they can show non-technical people how "improved" their new version is (MS Office), or they introduce arbitrary incompatibilities, so you need the most recent version to edit files that have been created/modified with that new version (I'm looking at you, Autodesk!).
With a subscription model, at least these vendors could focus on changes that actually provide value to their customers rather than making arbitrary changes just to make people buy a new version they might not really need.
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
> 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.
This. If you sell an app and service together, you can charge a recurring fee. If your app is more traditional, then a one time fee for the app is appropriate. Note, this does not mean that you can just add a service willy nilly like and start charging a recurring fee. That's crap.
That's crap is not exactly a great reason for why one can or can't do something. I'm reading a lot of people with strong opinions, but I'd like to see the reasoning behind them.
A restaurant has some really popular plates, fancy looking things. Owner sees a way to generate revenue, so he sells the plates for $5 and every time you bring the plate back, you can refill it for $10 (which is a discount off normal prices). That's a pretty good deal for everyone, this is good.
Alternatively, same restaurant has some really popular plates, fancy looking things. Owner sees a way to generate revenue, so he sells the plates for $5 and a recurring fee of $1 per month. That's it, nothing else. Why would I want this? What's in it for me?
Why must there be something for you? The thing in it for you is the same as before: the plates. If they're no longer worth it for you, that's fine, but that's the same if the owner had kept the same model but simply raised the prices or reduced the size of portions. I don't see why that's "crap" or "inappropriate".
The only exception I see is people who already bought a plate; I fully agree they should be allowed to keep using it as-is for free, since otherwise that's a breach of an existing agreement. But there's no such agreement between the owner and prospective buyers.
In scenario two, why should the plate get more expensive over time? It's the same exact plate. Nothing changes about it. I don't get a service where chips are fixed. I don't get a discount on food occasionally. Nothing. So, there's no _reason_ for the monthly fee, from the perspective of the purchaser.
You seem to be taking issue with my word choice, but I stand by that choice. The second scenario is a crappy deal. It's "Crap" for the consumer. I don't know anyone in their right mind who would go for deal number two willingly.
One-time payments for software amount to a pyramid scheme where you benefit from the money of future users. That's not without its downsides either, where your userbase grows indefinitely yet doesn't pay for its own support-email rent.
There's obviously a middle ground, like being able to at least use the version you paid for indefinitely but having to pay a smaller price to upgrade. But which direction a pricing structure goes also depends a lot on the niche and type of software.
Citing the worst examples of "subscription abuse" isn't really an argument either. Of course you can find examples on each end of a spectrum. But as far as most software pricing goes, if it's so bad, then people wouldn't pay.
There's a difference between charging for updates and charging for continued use. What if Sublime Text started charging a monthly fee just to use it? There's no excuse.
> But as far as most software pricing goes, if it's so bad, then people wouldn't pay.
And yet people keep paying ransomware for access to their important files.
I do feel that I get value for my money and with the yearly fee I get all the updates (which are important in the ever changing world of web development), but sometimes it still feels like protection racket.
no, not like webstorm. Webstorm is pretty similar to sublime text. You pay a price for a perpetual license. After one year of use, you can decide whether you keep on using the 'old' version, or if you pay again to have the newest one with all the updates. I think the comment you were referring to was thinking about stuff like adobe, where if you don't pay, you don't get anything.
Indeed, you're right. Don't Adobe give you some "cloud storage" thing though? Fortunately now that we're using Figma I don't have to deal with the hundred pound gorilla called Photoshop.
Jetbrains does not require subscriptions for continued use of any version. Purchasing a 12-month subscription (which is cheaper than their previous "perpetual license") gives you a perpetual license for the current version of software.
This is actually my favourite licensing technique I have come across for software.
There’s a difference though. Previously the version you ended up with was the one at the end of the year of updates. In the current model you have to reinstall the old version of the time of purchase, undoing the updates you got. It’s actually quite clever since you immediately notice what you’re missing by not paying.
I could have sworn they offer specials or something where you can get the current and next version.. can't recall, I end up upgrading each year to keep my discount going.
You can actually keep your next current version by buying for a few months to extend to the next 12 month anniversary. See last timeline example on this page:
>If they started charging just for use they wouldn't need neither an excuse nor a justification.
Actually they'd need both.
And companies are not so dumb as not to understand this. Any company that started charging or went into a subscription model, offered both excuses and justifications for doing so.
You might be think "it's a free country, it's their product, and they can do anything with it".
Which is true in a trivial way (they're allowed by the law to do anything they like in that area), but it's also wrong.
Wrong in that in practice they're not really free: to survive they are bound to the market and their customers responses.
So they're free only as much as they're OK with pissing their user base and potentially losing sales (or have most of them go for some other product, and kill their own user base -- e.g. Quark xPress vs Adobe Indesign, and tons of other similar examples).
If the sublime folk offered a “bug fix only” monthly subscription, I’d buy that. My grandfather went through a half day’s paycheck of tooling a month on his own dime. I figure bug fixes are the software equivalent of sharpening chisels, buying new bits, surfacing a mill, etc.
> If the sublime folk offered a “bug fix only” monthly subscription, I’d buy that. My grandfather went through a half day’s paycheck of tooling a month on his own dime. I figure bug fixes are the software equivalent of sharpening chisels, buying new bits, surfacing a mill, etc.
New OS versions (especially from Apple) regularly create new bugs or completely break compatibility with old software. The cost of upkeep is not entirely predictable and easy to "price-in" to the upfront cost.
Microsoft jumps through hoops for backwards compatibility, often to their own detriment. Apple - comparatively, not absolutely - almost ignores backwards compatibility...also often to their own detriment.
No, it demands that you create new features and bug fixes that are worth the cost of upgrading and then people buy it. this is great.
photoshop was fine in 2012. now you can’t get a copy of it from adobe and cd keys sell for more than they originally cost. this is only because adobe wants to take more money from people until the end of time.
The middle ground doesn't work. See MS Windows update hell.
The way things should work is like this: Subscription for when you want to use the software and open format data files that you're always easily able to export and download.
If a company goes out of business or does something stupid then another one will pop up to handle your needs. This aligns incentives correctly while still allows a healthy dose of competition.
Actually, it works in software that many of us use every day. Once again, there's more nuance to making an argument than being able to point out a single absolute example. Why is this such popular rhetoric on HN? Especially in such a varied imprecise world of pricing structures?
I use various bits of successful software like Transmit and Alfred that let you update until the next major version in which you must pay again.
It "works" in the way that having insecure software on your computer "works" which is to say that it doesn't work, we just put up with computers where the non-technical don't know the mess they are in. Every major operating system (iOS, Android, Windows, QNX) or widely used software application (MS Office, any browser, any widely used app) issues emergency security patches.
The reality is that having everyone on the same version drastically simplifies not just security, but also interoperability. It isn't 1998 anymore. The default is internet connectivity and we should stop pretending our apps are secure when they are not.
There is a kind of perverse incentive not to work too hard to secure software when doing so removes a critical reason to buy the updates.
That being said I do think truly securing an application requires first having a secure platform. Otherwise users could indefinitely demand mitigations at the application layer until it contains most of its own OS.
Now you do you, and I'll use Goldwave v4.0 for basic audio edits - exactly the same tool I used in 2000, one that works well and I never had to re-learn.
I despise tools that capriciously change in my hands. Extra "security" is not worth the productivity hit.
Again, Internet connectivity isn't my default. Dropbox can handle that, and that software gets all the updates. The tools I use to make stuff I put in Dropbox better all be offline and never changing unless I say so.
That applies to the office suite, DAW, graphics editor, etc. I haven't seen anything their online features could give except a cloud lock-in.
You may value extra security, often necessitated by the very virtue of the software being online. And I value the ability to use without having to think about whether the signal is strong and my card payments went through.
The reality is that the interests of the users are often not aligned with the interests of software vendors.
The "middle ground" has been the most common model for desktop app pricing for decades. You buy version X of a product. When the next major version is released you pay an upgrade price.
In fact, the "middle ground" has been the norm for the majority of software apps over the history of desktop computing. It's the SaaS subscription model for cloud-hosted software that is the new deviation. But that cloud-based subscription model is now leaking into desktop apps (like the Adobe suite).
> The "middle ground" has been the most common model for desktop app pricing for decades. You buy version X of a product. When the next major version is released you pay an upgrade price.
Mobile app stores killed that model, when they made continuous, perpetual updates the norm. At the time, everybody was too busy pointing out the implications of going from 50$ to 50ct when the even bigger change was a farewell to major version upgrade sales.
But there, after a few cycles of companies ruining themselves by hiring in the short-lived money surge of growing an app to saturation, parts of the industry seem to have found their way to quite reasonably priced subscriptions.
Both apple and google don't support 'pay for upgrade' model. Its either subscription or pay once. Of course, you can roll out your own payment gateway(which apple has further issues with) or re upload the app under a new v2 name, but those are not very satisfactory solutions.
There is a way to provide upgrade pricing for iOS. It's an ugly hack though....
2015 - you sold v1 for $5.00
2017 - you start selling v2.
You sell v1 for $5.00 but in the description tell everyone not to buy it.
You sell v2 for $5.00 but direct people who have already bought v1 to buy the bundle of v1 and v2 that you price at $8. Anyone who has already bought v1 can buy the bundle for $3.
It’s quadratic, not exponential. For N versions, you have prices:
N * (N + 1) / 2
It is likely that you could reduce to something approaching an upper bound of 2*N, as with version 8 out, you can drop support for a discounted upgrade from v2 to v4.
>or re upload the app under a new v2 name, but those are not very satisfactory solutions.
Not very satisfactory, but very prevalent.
And, I'd say, given the low price of apps, it might be just right to not offer any special discount for an upgrade. You could always reward older users some other way.
It was easier to price software like a physical good when the distribution method was identical to other physical goods. You'd go to the store and give them $50 to leave with a box that contained a disk. When you wanted vN+1, you'd repeat this process. It all made sense to the user. That model is collapsing as digital distribution takes over.
Also, Adobe's tools have always been among the most pirated software out there. People who needed to do occasional work wanted Photoshop but there was just no way they were going to drop $700 on it. Nowadays, Adobe just charges them an $11/mo fee. That makes it much easier and I know several instances where this newer model has resulted in real income for Adobe, from what would've otherwise been pirate installs.
People are much more willing to pay a small fee several times than a massive fee once. The subscription makes them feel like they have more control and they can cancel when they don't need the product anymore (not always true because some of Adobe's subscriptions have annual lock-ins). It reduces the friction from "figure out how to pay us more than your car payment" to "just send us the cost of a trip to Starbucks, it will only take a couple of minutes and you'll be merrily on your way".
This dramatically changes the incentives re: piracy. Instead of spending hours trying to find a cracked build from a site that won't pwn your PC so that you can save hundreds of dollars, you just pay a few bucks and speed through with a known-good version (plus a clean conscience).
It's almost a side benefit that subscriptions frequently represent additional lifetime value v. a "pay once" model.
An alternative is intentionally packaging releases into tiers (performance, stability, feature, etc) and sell them as such. Something closer to Windows XP service packs than individual updates. I'd expect small, necessary updates to continue to exist as they do.
A user can buy the base version, then a few months later when you create a release that allows processing widgets through the program twice as fast, they can update for a small fee. This would force the developer to create updates that would be easy to communicate the benefits of to the consumer.
It'd be a bit more difficult to figure out pricing for new users over time and which version they receive, but it would allow they old pricing model without forgoing the benefits of incremental development over time.
> An alternative is intentionally packaging releases into tiers (performance, stability, feature, etc) and sell them as such.
That could quickly devolve into supporting a large number of distinct versions of the software, which would be difficult and costly. Nobody wants to do that.
Not to mention that, if this versioned software is a platform (for example, WinXP and its service packs you mention), downstream vendors would also need to QA and support their software on all actively supported versions of said platform.
This is possibly the worst use of the term "pyramid scheme" I have ever seen used in print, and that's really saying something with how often it's abused nowadays.
Yet you left your entire argument up to our imagination.
I explained why I find the description fitting. You could at least entertain us with why "future users pay for your upgrades" does not fit in the context of one-time-paid "perpetual license" software beyond disagreeing with the phrase I chose to name the predicament.
It seems to me that there's one very obvious difference: once software is created, creating more copies of it is almost free. The reason pyramid schemes collapse is that they require an exponentially increasing amount of new deposits to keep up with the payments owed to existing depositors, and that's just not how software publishing works. So long as there's a sufficient stream of customers buying, it doesn't cost much more to keep everyone up to date than it does just the new customers, and if there isn't then forcing repurchases won't necessarily fix that.
But with the way that App Store economics work, you can't easily charge for upgrades but both iOS and Android have new versions yearly with new features that users expect you to implement.
Which is why most companies do a mixed model. Pay an amount for a version, get one year of updates (or that specific version + it's updates), then pay to upgrade (and/or reup your year of support).
There's a flaw in your logic: You assume that everyone keeps using every app they bought forever. If that was the case, pay-once would be unsustainable.
However, that is not the case. Everyone stops using your app at some point. So you don't need to support users forever, you just need to support them for some finite amount of time. Some users might use your app for a few years, some use your app just for a few weeks. Some users will email you half a dozen times, but most will never email you. Your app price should be priced so you can afford to support the average user.
And another thing that people forget: When your user base is growing, the amount of word of mouth recommendation you get also grows, and you automatically start selling more licenses, so your revenue also grows.
Pay-once and subscription aren't really that different in practice. Pay-once even has an advantage: You get all the money up front. And that's awesome if you are planning to grow your company.
It's not a flaw. That's just uncertainty and a gamble. Whether that's sustainable for a given piece of software varies per product. And that's kind of the point I'm making.
The extent at which some users subsidize the app for others is just one of the decisions you need to make when deciding on a pricing structure, not a rebuttal.
> There's a flaw in your logic: You assume that everyone keeps using every app they bought forever. If that was the case, pay-once would be unsustainable.
There's also a flaw in this logic: It assumes that all apps require some kind of server provided by the developer in order to run.
Once upon a time, standalone software was standalone and could run in perpetuity without requiring anything more of the original developer. It's still entirely possible to write software like this, there's just a trend away from it due to the prevalence of always-on internet connections and the ease of keeping some of your application server-side as a form of copy protection.
Until your standalone software answers customer support requests automatically, you‘re still going to have variable costs that grow with your user base.
It's trivial to only supply customer support for a limited time after sale of the software, or to offer a separate support contract for customers who require support.
“Thanks for contacting us! Our standard license includes support for 12 months after purchase. I’ve attached an offer for our extended support contract. I’m looking forward to your response!”
Atlassian has such a pricing scheme. Pay x amount per year for the cloud version, x-x/10 for the self hosted license and half that amount yearly for updates and continued support. Of course you can still use the license without updates and support. The <10 user license is almost always $10 so that the entry bar is set low, other licenses are much more expensive (>100x) with price going down with numbers until you hit the datacenter versions which are priced differently. I think it's very flexible and covers just about every use case.
> Of course you can find examples on each end of a spectrum.
A good example is the Adobe Creative Suite 6 Master Collection which was so expensive to buy in Australia that it was cheaper to fly to the US, buy a copy and fly back. Now, you can get a years subscription to Creative Cloud for 'All Apps' for about 1/5th of the price of what CS6 MC was in Australia. It is still expensive, and after 4 or 5 years you will have spent more but thats significantly longer than Office 365 which costs about 2/3rd the price per year of a copy of Office 2016 outright.
> One-time payments for software amount to a pyramid scheme where you benefit from the money of future users. That's not without its downsides either, where your userbase grows indefinitely yet doesn't pay for its own support-email rent.
This logic applies to literally any one-time purchase that includes a warranty, yet the consumer goods sector has managed it somehow. What's really happening is a deterioration of the idea of "owning[1]" software. I'm sure it's great for the publisher, but it's almost all downside for the user. I'm still using an email app that was acquired and shut down by Google in 2012 and it continues to work just fine. On PC I use WinRAR from 10 years ago with no issue. I can't imagine having to pay for all of these little apps on a subscription basis and then having to find alternatives when the creators get acquired/go bankrupt because the subscription is no longer supported.
Edit: To add to that, if the cost of the subscription is to provide me with superior support, will publishers selling me these subscriptions be removing the warranty disclaimer from their EULA? Probably not, right?
[1] Yes, you never "owned" it, but licensed a copy - but in practice it was similar to owning a physical good.
You're exposed to pretty serious security vulnerabilities if you're still using a 10-year-old version of WinRAR to unrar/unzip/uncompress files you get from the internet.
IMO except for highly priced products, paying once for software does not entitle you to support unless it's the user forum/SO type. John Doe giving a company $50 three years ago does not give him the right to email people at the company asking for tech support.
Many many companies still allow this, but I think if you want support you should be paying a support fee (e.g. monthly subscription).
The real innovation of the *aaS model is that you no longer need to compete with prior versions of your own software or hardware infrastructure. You can hike prices, cut engineering costs, cut some nines off your availability, defeature, or just plain embrace incompetence, and, in the short term, it will improve your balance sheet.
Of course, in the long term, customers will revolt, and do so swiftly, and without mercy.
I don't know. I think a lot of people have decided they like things like the Adobe products subscription.
Instead of the several thousand dollars you would have had to pay for the various softwares in the lineup up front, you just pay $50 a month. Which is reasonable of you previously used more than just Photoshop and maybe upgraded every 3 to 4 years.
If the end result is a similar cost, I would much rather keep my capital in the business and make a monthly payment.
There are some benefits in terms of product as well, if Adobe knows they have subscription revenue then they may be more focussed on fixing bugs and keeping existing customers than adding dubious features in an attempt to get upgrade revenue.
I do some vector design work maybe once a month. I'd love to buy a license for Illustrator, if it cost whatever it used to cost before Creative Cloud. I would use it for a long time.
But 50€ per month is too much. So I bought a license for Affinity Designer instead. It covers most of my needs, and it's no subscription. I also bought a license for Sketch, since the subscription is optional.
I'd love to use the same tools as professional designers, but they've become too expensive.
They never became more expensive. They were extremely expensive to begin with and now they’re a lot cheaper. Previously it was like 500€ or so? That's too much for the casual user as well.
Here’s the reality. I used to pirate Adobe software because there was no way I was going to pay 1500k or whatever Photoshop was. Adobe got $0 from me.
Now I subscribe to get access to Photoshop. Adobe now gets £100 from me a year. I’m not the only person I know who went through this.
Of course, cheaper alternatives always existed. Adobe’s adoptance of subscription pricing hasn’t changed that.
I just checked the illustrator website. One year costs 287,77€. So it's only cheaper if you updated at least every two years. But I use my software a lot longer than that.
Software used to be an investment. At university, our physics department had a lot of old computers standing around, whose only purpose was to run some specific legacy software that was no longer maintained, but still worked perfectly.
During my time there, I convinced the theoretical physics department to buy a few Illustrator licenses so we could make better diagrams. I think the academic license cost 300€ per seat. They probably never updated, but I'd assume they still have a PC somewhere with one of those licenses installed, and if someone has a PDF from Inkscape with an incorrect Color Profile, they could still use that machine to fix it.
I think you underestimate how many people use old software out there. Sure, we tech folks update every year, but people who work outside of the tech bubble don't always upgrade a system that's working perfectly fine.
they are way way more expensive now. I only upgraded every other version so $199 every 4 years or $50 a year. current Photoshop subscriptions is $239 a year or nearly 5x the price
Where are you getting your prices? I never remember being able to buy photoshop for $199. I remember it more like $600+. And the website shows $120 annually and that includes Photoshop AND lightroom AND 20GB of cloud storage.
If you need more than just photoshop, the deal is even better.
It works for Adobe, ReSharper or MSDN because people make their livelihoods off it. It makes less sense when it's a utility (window management) or tangential to your actual revenue stream (keeping notes).
What? Am I doing my math wrong? Photoshop upgrades were always $199. Photoshop subscriptions are $239 a year. So upgrading every 3 year is $199 vs paying a subscription for 3 year is $747. How is paying nearly 3x keeping money in your business?
The $199 upgrades were only after the initial PS purchase price of $699. The PS-only subscription is $9.99 a month. The $239 a year one "Includes 100GB of cloud storage, your own portfolio website, premium fonts, and social media tools". It is way cheaper now unless you go 5+ years without upgrades.
I wouldn't put any value to those perks. The average use of that 100GB storage is likely to be a very small fraction of that and all will cost pennies or less for Adobe to provide. Yes, if you just so happen to be in the market for all of those it would cost you some amount to source them independently. But the trend of bundling low-cost tangential services as a pricing defence strikes me as rather cynical.
You skipped over the meat of his post. If you don't need those extras, you can get photoshop AND lightroom for $9.99 a month. So you are getting it cheaper than you ever could.
Releasing new features and improvements is highly incentivized in the *aaS model. It’s the main way of boosting ARPC, and as you mentioned, if you fail to do it, you’ll be very vulnerable to competition. It doesn’t alway suit every situation, but in those that it does, it benefits both consumers and merchants.
Except, if the only app you need is photoshop you can own Affiniy Photo for $30. Or, you can own Affinity Design for $30. And this one is the real kicker, Blackmagic is giving away most of what you need for free, and if you need more you can get a permanent license for a few hundred bucks. How long do you think it will be before Adobe starts really bleeding.
In the past Adobe’s competition wasn’t as good. Now, the competitors products are just as good. In the past PS competitors lacked features pros needed like PMS spot channels/CMYK/LAB. Not anymore. And Resolve is very compelling in the video realm.
Many of Adobe’s core products have languished at the same time as many of the features that set them apart in the past are become less differentiating. The photo editing/vector drawing space is becoming more commoditized.
Which is the "just as good" alternative to Lightroom? I've found its tools to be astonishingly high quality. Adjustments have exactly the effect you expect them to, instead of something closely adjacent to what you expect. The spot remover is basically magical. RAW handling is top notch.
I haven't seen anything at all that comes close on a cheaper model.
LR performance with RAW is beyond horrible. LR unability to work properly with simple panoramas is pathetic - Autopano can fetch all info from RAW just as well as LR, perform the joining about 3-4x faster (no kidding), AND do a far better job at joining pictures where LR simply fails to find anything matching.
From the developers perspective though it is way easier to run a business when your software is sold on a subscription basis. If you know to a decent level of accuracy how much income you have, you can easily work out how much you can afford to spend to keep running and growing the business.
If you have no idea how much income you are going to make, stuff become a hell of a lot more complicated, unless you have a substantial cash reserve available - not a luxury that everyone has. The directors spend a hell of a lot more time running around banks begging for short term financing, cutting costs and planning out 100 different potential scenarios.
If I had to run another business, I would definitely look to running some kind of subscription scheme..
I get this, but how much more predictable are subscriptions? I mean, unless you are holding customers hostage with data lock-in, they are going to come and go.
And if you get a reputation as a hostage holder, you will likely spawn competition that avoids your negatives.
I’m sure you will get some residual low hanging fruit in the form of people that buy subscriptions and don’t care enough to cancel.
Doesn’t seem like a winning business model though.
But, generally this will be to a much more predictable level that if you are relying on upfront sales. Unless you really mess up your product, if someone subscribed last month, you can generally predict that there is a, say, 95% chance that they will still be subscribed next month.
If it is a one off payment, then you know you aren't getting any income from them and you just have to hope your sale people are going to do their job next month.
It has nothing to do with lock in. That's a bit of a red herring. You can have just the same (or more) chance of a repeat subscriber by creating a really good product as you will with some kind of hostage strategy. As you say, not a winning business model.
My experience here comes from more business to business where a months worth of expenses would be covered with 1-2 sales. I had times when the sales people would just disappear on extended unannounced holidays or decide to move to a different job without informing anyone. With our business strategy relying so heavily on upfront sales to maintain the cash flow, it was not a fun position to be in!
Things may well be different with consumer products where sales volumes are in the thousands of units.
I look at something like Overcast. Great software that I subscribe to and give him his money. Almost by definition, and through great pains from the developer, there’s almost zero lock in for a podcast client.
Subscriptions are MASSIVELY more predictable. I say this after working daily for years with FP&A team on building revenue projections for a product that had both subscription and non-subscription sales models.
You realise that your post sounds like the stereotype of every bad manager ever? "How much harder could it be to build the new feature if we did X, Y, Z? Surely you can get it done in just three days?"
Mandatory, yes, but the GDPR does not say it should be done for free. I offer data exports for all my services, so I'm compliant with the GDPR, but you will have to pay me for my time
Careful, there, it does say that in Article 12, (5):
"Information provided under Articles 13 and 14 and any communication and any actions taken under Articles 15 to 22 and 34 shall be provided free of charge".
(Article 15 is the Right of access by the data subject.)
You can only charge for subsequent copies or when "requests from a data subject are manifestly unfounded or excessive".
the data will be useless other than as a source of information. If you have data for an online vector editor, the vector data can be legally taken out via a common format (such as json), but there'll be no importers for this shape of data.
Any business can easily construe a common machine readable format that's also completely custom, and unimportable anywhere else, to satisfy the letter of the law.
If it's any sort of bigger service, competing services will implement their special format.
If they frequently change this format to break those implementations or clearly make it much more complex than it needs to be, that can also have legal repercussions.
That is a rather cynical take. More pragmatically, while it may be true that companies don't immediately jump at the opportunity to export in a common format (or there may be too many standards to export as), there is suddenly a market for data adapters if the companies do not import from their competitors, and a missing feature on a product sheet in any case.
I was looking at a piece of hardware, that had some software that runs with it. Same deal. You buy the hardware but if you want to use the app.... it's a subscription.
> that price is vastly out of proportion from the cost of providing the software
This is not how prices are set. They are set on the willingness and ability to pay. Water costs nothing to produce but if I have it all you will pay me everything you have.
For example if their main competitor went bust and not a single atom changed inside this company, they could charge you more.
Do they have a monopoly or is it hard to migrate? These are the conversations the people who set the price are having. They are not talking about people being upset if they still pay.
About Ulysses specifically... they say when they were charging a monthly fee their users still expected regular updates after they paid.. and that sales would spike after a release, then fall to an unsustainable level:
https://medium.com/building-ulysses/why-were-switching-ulyss...
"that price is vastly out of proportion from the cost of providing the software"
That's just an unfounded assumption by the author. He says he knows this, even though he doesn't know how many developers are working on it, what they get paid, how much time each release takes, how large the code base is, or how many users the product has. Essentially, he has made up a cost in his head, and decided that the costs must be less than his fantasy. For all we know, he's one of 2 users, and the cost for keeping his editor available is $100k/yr/user.
This also completely ignores the fact that prices for software aren't generally set using cost plus pricing.
well, that is economics 101. consumers price goods by value, not by costs. if your costs are higher than consumers are willing to pay, then you will at some point go bankrupt.
Exactly. No one cares what the product costs to make, they care what it costs from their own pocket. If the app isn't worth $40, then it doesn't have the features and/or the polish to have multiple full-time developers working on it. If the price people are willing to pay is lower than your cost of goods sold, lower your COGS or raise your value proposition. Those are the only options.
Ay, there's the rub. The problem is also related to price anchoring [1]: People [2] accepted the price of $70 for the perpetual value provided by the app (including cloud syncing), but balked at $40/year. The latter price makes the app more expensive over 2 years, and the developer promising updates doesn't have quite the impact to justify the change in the eyes of the angry customers.
If the app initially cost, say, $160, maybe the newer pricing would've been better accepted. I hear Adobe and Microsoft are doing quite well with the subscription models...
[2] The people who bought it. This is important, because it ignores all the people who thought this wasn't good value. Maybe some of the initial non-purchasers became subscribers. Market analysis is hard.
On the other hand, there's a million different competing not-microsoft-word text editors for writers. Whereas there's no real alternatives to adobe or microsoft products if you need them for your career.
So I guess you’ve never used one of those “open” “alternatives”? Often broken mess, lacking features, incoherent or antiquated UI, etc., ending up costing you more in time needed to ge things done than the paid alternative.
The production cost is one of the metrics customers use to decide if a price is fair or not, to them. There are other metrics, like the time that can be saved by using the product (ie. some way to quantify the product "use value"), but the production cost is often quite useful to detect abuses--and boy, aren't there a lot of attempts of such abuses.
> production cost is one of the metrics customers use to decide if a price is fair or not
only approximately, and only if the consumer really knows the cost.
Think jewlery (like diamonds), or expensive brand name goods like designer clothing. The production cost for those goods is "low", but the charge is in marketing and status symbol representation (which is modified via marketing).
It could be argued that those two examples are good cases where the customer could be concerned about the value they get, even including the status factor. Diamonds are notoriously high-priced because of a quasi-monopoly, and high-end clothing is pretty often of poor value, quality-wise. If you like designer clothes--and you're not on unlimited budget--you eventually learn what designers/brands to avoid, because the value is just not there, even for that industry.
So this looks like a case in point, where having a rough ideas of the production cost (some parts hand-made, made in France/Italy/England, expansive material like quality cashmere etc.) is important.
That is in itself a great argument for the subscription model. Consumes receive value from continued use over time, so why not fit revenue to the same shape?
I feel like Ulysses wouldn't have gotten nearly so many complaints if (a) they'd given some way cross-apply the license purchase price to a subscription, instead of expecting recent purchasers to shell out a premium price a second time to get updates, and (b) they'd actually had any substantial feature updates to show for it, instead of almost all attention since then going to just making the iOS app act more like the desktop app.
> some way cross-apply the license purchase price to a subscription
They did do this. From the footnote to to their original announcement[1]
Recent purchases of the Mac app will unlock up to 12 months of free use, and purchases of the iOS app will unlock up to 6 months of free use. Your individual free-use duration is calculated from your actual purchase date, respectively, and if you bought Ulysses on both platforms, we will add together both periods.
There really isn't a better way to run a business (even if it's just a single app) than to get someone to pay you an amount on a fixed interval. It's predictable and generally weathers shocks pretty evenly. This is also why for most investors dividends are a big selling point - consistency.
Even Apple somewhat relies on this, except it's been in 2 year intervals. It's the point of so called "planned obsolescence."
So if you're an indie developer, you only have a few options.
1.Go through the rat trap of doing ads and trying to grow a huge userbase with marketing etc..., which everyone hates but most tolerate because it's free.
2. Charge a 1 time fee and hope that you price it right to support long term development and sustainment, knowing that you'll probably limit your market significantly.
3. Charge a recurring low(er) fee and draw a balance between losing a lot of very price sensitive people and having to run a marketing campaign and ad system.
No good option there but subscription seems to have the most benefits. By the way, everything needs upkeep.
Seems weird to call Apple out for planned obsolescence considering their devices are generally supported by the manufacturer for considerably longer than the alternatives.
It's not directly comparable, however the two year upgrade is what they really want people to do - after all it was pretty definitive that they were degrading experience as a trade off on the battery issue.
> 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."
Frankly, the writing has been on the wall for something like at least 10 years and surely came into life once Adobe announced the CS 5.5 subscription model in 2011.
Ulysses has a custom markdown feature that I thought was great. The only problem was that you couldn't use it without opting in to use their own file based storage schema. So if you wanted to store your writings in "regular" files and sync them yourself etc., you couldn't use the custom markdown feature.
I thought this was absolutely ridiculous since the custom markdown would have simply gotten written as plain text. I asked why they're limiting the user like that and got even more ridiculous response: apparently they didn't want other people to get confused in case I ever shared the files that were outside their own file based schema. This non sequitur infuriated me enough to ditch the software.
None of it made any sense until they announced the subscription model.
A model I really like is the one IntelliJ uses. They encourage you to buy a subscription. But when you buy a year at once, you get a "perpetual fallback license" such that you can always keep using the version that is current when you buy: https://sales.jetbrains.com/hc/en-gb/articles/207240845-What...
That means I always will have access to my projects and to the level of functionality I start with. But I keep getting upgrades as long as I keep paying, and they get the steady revenue stream that means they don't have to play weird marketing games.
Developer Express has that too with their .NET components. We have dropped the subscription but are still using a version that's 3 years old but good enough for us.
You also get the perpetual fallback license if you pay month to month for a year, for whatever version you had 12 months ago.
E.g. I start paying month-to-month at 2016.2, after 12 months I have a license to 2016.2. But say after the first month, 2017.1 comes out. Then after 13 months I now have a license for 2017.1.
One thing that always rubbed me wrong about this is that, logically speaking, if you buy a license for a year, the perpetual fallback license should be the version you had at the end of the license, not the one that was on the market at the beginning of it. It doesn't really make sense the way they do it, and it feels like a particularly hamfisted attempt to grab an almost negligible amount of money, so I'm puzzled.
It's not the negligible amount of money that matters.
The trick is that at the end of your yearly subscription you have already upgraded to a newer version, so falling back to the perpetual license means downgrading, which is both often a practical problem and (perhaps most importantly) something that I think many have an emotional aversion to.
I'm pretty sure that if the fallback license was to the most recent version you're entitled to during your subscription way more people would take leaps between the end of a subscription and the start of the next one (though Jetbrains offers you a further discount if you don't do so).
In the end, though, when I discovered this was how it worked at the end of my PyCharm subscription, it left me quite a bitter taste in my mouth, and I just stopped purchasing any JetBrains products. These kind of details are akin to trying to trick people via putting stuff into EULAs nobody reads, and for me at least, it gives the distinct feeling that they're trying very hard to screw me over, so I try to not frequent nor support those kinds of businesses, IMHO.
So, is what they are doing worse than what most subscription models do (lose complete access)?
I've been using them for awhile and I felt they were really up front about what they were doing, but I don't know if they've always been as transparent.
It's definitely better than that. But it's still not good. This is all my personal opinion though, I already voted with my wallet by not buying their products any more.
Would it have been better if you "purchase the current version and get temporary upgrades for a year for free." Essentially the same thing, but up front and not implying that you get more than you do.
> The trick is that at the end of your yearly subscription you have already upgraded to a newer version, so falling back to the perpetual license means downgrading, which is both often a practical problem and (perhaps most importantly) something that I think many have an emotional aversion to.
Qualifies as
> a particularly hamfisted attempt to grab an almost negligible amount of money
OK, so maybe it's not as negligible an amount but it feels petty and I'd not pay money to a company that pulls stunts like that on its customers.
> falling back to the perpetual license means downgrading, which is [...] something that I think many have an emotional aversion to.
They're playing on loss aversion and the endowment effect. It feels worse to lose something than to never have it, so people are more willing to pay to keep it than they would be to pay to buy it if they were never given it in the first place.
> One thing that always rubbed me wrong about this is that, logically speaking, if you buy a license for a year, the perpetual fallback license should be the version you had at the end of the license, not the one that was on the market at the beginning of it. It doesn't really make sense the way they do it, and it feels like a particularly hamfisted attempt to grab an almost negligible amount of money, so I'm puzzled.
You are absolutely right! That's exactly how it should work but it's surprising that they don't do it that way. I can give you an explanation from accounting perspective: When the sale happens, the accountant would record the sale in their Books of Account as "Unearned/Prepaid Revenue" (as a liability). It makes sense as you have taken money "in advance" for a sale but haven't delivered the updates yet and hence you cannot claim it as Income. Every time you put out an update, you can claim a portion of the "Unearned/Prepaid Revenue" as "Revenue" and push it from liability to "Retained earnings" account as Income. When the year expires (note that the year is for the user not the financial year) the accountant would claim the remaining Unearned/Prepaid Revenue as Revenue/Income.
I wonder how they manage their Books of Accounts if they have defined that the license falls back to the earlier version. What they are doing doesn't make sense from an accounting perspective as well!
I'm not an accountant but presumably you treat it the same as the fairly common purchase+service contract. You have a sale of a license (of the version at time of purchase) and the prepaid service contract that either converts to revenue over time, or, if non-refundable, converts to revenue immediately. The proportion between the two components is fairly arbitrary. There is no constraint on how they implement this from an accounting perspective - they can change to allowing the user to keep the latest version they upgraded to without serious consequence (you can just as easily sell "product version X with one year of updates" which is very common as well, and mark that as revenue right away).
> I'm not an accountant but presumably you treat it the same as the fairly common purchase+service contract
I'm not a certified accountant either but I took the course just to understand workings of my business.
> they can change to allowing the user to keep the latest version they upgraded to without serious consequence
It'll be in their best interests if they did.
> you can just as easily sell "product version X with one year of updates" which is very common as well, and mark that as revenue right away
You definitely can. But you end up overstating your revenue and in turn your profits. The downside to that is you end up paying high taxes (unless you can minimize your profit by showing a ton of expenses as well). If it was instead treated as Unearned Revenue (which is a liability), you would be stating your true income and showing lower profits and thereby paying lower taxes.
Take for instance the case where your customer purchases a multi-year subscription. This causes a higher cash flow (assets go up) but you won't be overstating your income (as liability goes up by classifying it as Unearned Revenue instead of owner's equity). The liability can be reduced by claiming it as revenue over a multi-year period. If it was marked as revenue at the time of sale, the owner's equity (retained earnings) would go up. That would mean showing higher income which results in higher profits and you end up paying high taxes.
Remember that with unearned revenue you can carry it over to multiple financial years and spread your income between them. You lose out on this important tax saving component if you mark as revenue right away. This also has the advantage of portraying a true picture of your business in your books of accounts.
Sounds similar to employers who pay contracted bonuses late, don't pay if you quit before the bonus date, and use bonuses to make up for reduced salaries.
This is really annoying for me, how can I work for a full financial year (and get my shares allocated), receive my performance review but not get a bonus because I quit before October where they pay the bonuses on the last FY?
Hence the wave of resignations the week of bonus payouts. People play the game and wait to get paid, knowing if they prematurely signal their departure, the company will reallocate money to those who choose to stay. I'm not saying it's right but it happens.
It's not "complete crap" given that (a) it's in the paperwork they are given at signup time, and (b) if they are genuinely dissatisfied, they can downgrade back to basic membership and get refunded retroactively to the start of the membership year for the difference in cost of the higher membership.
That's strange, as that was not my experience not long ago. I'm thinking there was some miscommunication about the rebate with your family.
I received my rebate after I had let my membership lapse without any issue. You can use the rebate even without an active membership. You can even walk up to the customer service counter and get your rebate amount in cash if you want. I ended up getting pizza and took the rest as cash back.
Actually, I might have been an edge case and not representative of their normal rules.
"The Reward is issued approximately 3 months prior to the member’s renewal date in a Renewal Statement and reflects rewards earned up until the issue date. A member must be an active, paid Executive Member when the Reward is earned and issued to receive the Reward. To receive a refund for the Executive upgrade fee the membership must be canceled or downgraded to a Gold Star or Business Membership and any 2% Reward issued or accrued will be forfeited. Any additional savings and services exclusively for Executive Members will be rescinded."
https://www.costco.com/executive-rewards.html
You can even walk up to the customer service counter and get your rebate amount in cash if you want.
Here, cashing out is the only way they redeem the vouchers unless it's a really high amount (4 figures+), in which case they cut you a company check (that happened to me once in 6+ years).
Why should it work that way? You get the updates based on the assumption you are a subscriber, and you get the fallback license based on the assumption that you made a one off purchase at the date of purchase. It's logical the way it works.
It doesn't for the simple reason that they provide updates for the entire year. Surely those updates aren't provided for free. They are provided for purchase you made in advance for a year. If I cancel midway I should be entitled for all the updates till the end of the period. Unless those updates were free and not part of the sale. In which case, the licensee should still get those updates anyways for the period. You look at it either way it still doesn't make any sense. Or, they should return the update fee they charged for the year during the sale on pro-rata basis.
Also, how would you account for it? You can't retrospectively change the nature of purchase from subscription to a one-off sale! That would be audit hell for their accountant.
They sell you version at the time of purchase (fallback license) + access to updates, all accounted at the date of purchase. So when your subscription runs out in theory you could get old version then apply updates but you have no access so no updates for you.
> then apply updates but you have no access so no updates for you.
But that is denial of service that I legitimately paid for. Either they should provide the updates till end of subscription or refund the collected update fees pro-rata (viz. if I cancel after 9 months of purchase, 3 months of excess update fee collected should be refunded).
Yes it's possible to think of it that way and it makes sense now! However, they should explicitly mention it in their license terms that the updates are provided on trial basis and valid for a year and those updates can be purchased as a version upgrade at the end of the year.
It makes sense to me as removing the choice between, "Do I buy one-off license or a subscription?" If you get the subscription, you get a free one-off license at date of purchase.
Your way also makes sense, but they both seem reasonable to me. And I don't really care much, in that I renew when I'm regularly using their product, as I want to support them. If I just had to open an old project for something, then I don't mind exactly which old version I'm using. (And if I somehow did, I could just put it in 30-day trial mode.)
As I recall, the perpetual fallback thing was added to appease their customer base, who were enraged when IntelliJ announced that they were moving to a subscription model. The term "rent-seeking" was thrown around quite a bit then and seems appropriate now as well.
Another, maybe less flattering, way of looking at this is that you're buying or rent-to-owning the current version and then getting demo copies of updates so long as you keep paying your lease.
That's not entirely true. You can keep any version that you've paid one year worth of subscription for. That means that if you subscribe for three years then cancel your subscription, you'll always have access to the version that was released one year before you cancelled.
I think parent’s gripe is that if you end your subscription, you can’t keep any updates that come out during your last year, so you likely need to go backwards with your installed version.
It is particularly annoying if they introduced a serious bug, ie datagrip not refreshing queries, in the version you got when you purchased it, the one after the trial that worked. Then, a year later you get downgraded to a version that is useless.
They also drop the subscription rate after the first and second years. And even at the outset, the “everything JetBrains” license is cheaper than any two individually licensed products. If you do, say, Java and C# or Python and C++, this makes it a pretty sweet deal.
I wasn’t aware that the perpetual fallback license only covered the latest version at the time of subscription/renewal. That’s less than ideal, but apart from that, I think they’ve pretty well nailed the subscription-based model. It’s actually the _only_ software I’ve used where I feel the subscription model terms were actually an improvement over what I had before.
There are other software providers that charge annual subscription fees that will just stop support and upgrades when you decide to stop the subscription. They don't retard your licensed version down to a previous version. Some of them also allow you to buy a license for the current major version, with minor version updates for free, instead of going all in for a subscription. Heck, I spent 3 years getting free updates from one publisher. Having the choice of being able to buy outright or go on a subscription is, IMO, far better than subscription only models. I'm also pretty surprised that jetbrains took the decision to not only take away paid for updates, but not provide a rebate for people who don't want to continue with the subscription part way through. That just rubs me up the wrong way.
It's gone up since then to $500/yr. It takes you two years before you get the $300/yr price again. By then you've already spent nearly $900, with the third year making it $1200.
I think you're looking at the pricing for Businesses and Organizations (the prices displayed by default). Those are floating licenses. Most individual developers would buy an individual license. Individual licenses for the All Products Pack start at $249 for the first year, $199 for the second year, and then $149 for the third year onward.
Individual licenses can be used for commercial purposes just like a business license. AFAICT, the only difference is that a business license can be used by any single developer within an organization at a time, while the individual license can only be used by the named licensee.
There's also a 25% discount for new/recent graduates, which eases the sticker shock a little bit for new graduates.
I bought a copy of Office 2016 when it came out, it has now lasted me 2 years and I paid about the same as 2 years worth of Office 365. I intend to keep using it until it is no longer supported at all and I am sure I will have saved quite a bit of money for effectively the same product.
I got Office 2003 and it works for all of the home based stuff that I do now. I paid $70 on a sale. If I had been doing 365 since then at $48/year, I'm looking at $720.
I agree that office 2003 has enough features and is good enough for 99% of the things I use. In fact, starting with 2013, there are anti-features (integration with OneCloud, online docs) that I'd prefer were not included.
Unfortunately, Office 2010 already has issues opening files made with 2013, 2016, etc. Most of my PCs are on 2013 as I was able to grab several HUP licenses at the time. I seriously doubt 2013 will be 100% compatible in another year or two, and 2016 will be the minimum version one needs in a work environment where you're collaborating on docs made with newer versions.
I have no doubt that Microsoft has employees on the payroll who have no other function than creating annoying incompatibilities to encourage users onto the 365 treadmill.
I haven't kept up with the doc format story - are the ODF formats published, so LibreOffice can at least try to work with them? Or has MS closed them up again in the new versions?
I've been lucky enough to never have to actually develop ODF software for integration with Libre Office / MS Office, but from I've read, the specifications were half-heartedly published, and it is now basically a game where developers have to figure out all the exceptions to the interfaces that are within Office. Some work-around that might have worked yesterday might not work after an update of Office (which happens every few weeks).
Again, the cynical part of me assumes that MS employs full-time staff to ensure that Libre Office, Google Docs, and other apps that work with MS Office will never be even 95% compatible.
And from my experience, even simple spreadsheets and formatted Word docs don't display properly when opened in Google Docs or Libre Office, and large, complex business docs with macros and esoteric formatting don't have a chance.
There are a few developers in every place I've worked who use Libre Office because they're on Linux or refuse to pay for Office. And you can tell when they collaborate on a doc with MS Office users because it renders poorly when they send it back. It doesn't bother me, but I've seen how folks in management, marketing, etc. consider it unprofessional and assume the developer is just lazy or can't use Office well.
The one silver lining is that Linux users can use Office 365 online for less complex docs; it's not a full replacement for offline versions, but it's a better alternative than Libre for those of us who believe it better to be compatible with others even at the cost of a 365 subscription.
This can become problematic when an OS update breaks the perpetual fallback license software. As a developer, you can tell the customer that they have to upgrade the software (for a fee) because they upgraded their OS, but customers aren't happy about this either.
Isn't this basically what a lot of paid software with licenses used to do anyway? It's still how paid forum software and CMS plugins tend to work, with the rule being that anything released while your license is active you have access to forever and anything released after it expires you have to upgrade to get.
Why can't all subscriptions work like those old license schemes do?
It feels pointlessly complicated to me, the IDE version of picodollars. Their pricing is already a great value and I'd happily pay them a premium not to ever have to look at another weird 'perpetual fallback' Gantt chart.
In general, software has zero marginal cost, so in theory, it's price should fall near zero due to competition. So why is the subscription market behave so different ?
Even with zero marginal cost, you can still have substantial fixed costs. And actually costs don't define prices — what the market will bear defines prices.
Well, one could argue that the price is near zero. It is very rare software product that does not have somehow usable open source competitor. Then what you are paying for is something else than the zero marginal cost basic functionality. Like support, branding, network effect rents or something else.
Basically user's time invested. They know how to use the current software "I NEED Photoshop to do my job!!!".
Even if some other software has the same or even slightly better abilities at a lower cost, the overall cost of switching is much greater. Especially if someone else is paying for the tools.
Until some software appear that make user's competition more efficient and they are forced to learn new ways to not get out competed.
Many economical models (including working 9 to 5, btw) came from the times of physical labor. At that time the part of labor was relatively small in the cost structure, and the part of materials was big. And since materials is a one-time expense, it was natural to have one-time pricing.
In the knowledge-based industry such as software the cost of labor has the biggest share in cost structure. And unlike materials, the labor itself is a subscription. Social policies that make firing hard make it even more so. No wonder that revenue structure also tends to shift towards subscription-based models.
A less charitable analysis is that the software industry has failed to deliver reliable software so spectacularly that it requires constant upkeep from a team of professionals to maintain a text editor like Ulysses.
I must say I actually love the subscription model that is becoming the de facto standard.
If you sell a one time license to somebody there is no incentive for the seller to keep making the product better, to care keep caring for you.
With a subscription model - especially a non-annually-paid one, they have to keep working to keep you.
It's also a way more sustainable business model and probably the only thing which can replace ads in practice. If a service like facebook gets a load of money out of you per year, there's no way they would switch to a one-time fee instead. If it were to be replaced by a subscription though, then you're still a constant money flow for them, which would work much better.
How many products need constant feature updates? Aside from security/compatibility there are plenty of products that already meet everything required of them (to near everyone). How many new features does a file manager need? An PDF reader?
For Facebook - I don't think forced subscription would work. People would be forced to think about how much they value the service (a less ubiquitous one at that).
> How many products need constant feature updates? Aside from security/compatibility there are plenty of products that already meet everything required of them (to near everyone). How many new features does a file manager need? An PDF reader?
Do you have any example of file managers or PDF readers with a subscription-based model?
True. How many new features do they need? What about word processors? Photo editors? Email clients? There are new features that could be useful, but for many users their needs are already fulfilled. Why should they have to continue paying for Photoshop as a service if they're happy with the current version? I apologise for my poor examples.
> Why should they have to continue paying for Photoshop as a service if they're happy with the current version?
Ultimately - because the person who owns the rights for the software wants to keep charging them and since it's their software they decide what is charged for it, end of story.
If it's not a good deal for you, go somewhere else. There's no point arguing about prices beyond that. There's no 'should' in prices - only what people want to charge and what people want to pay.
Right, they pay more because the company wills it and people (I think) are more receptive to subscribitions. This is what the author of the article is complaining about and the reason consumer advocacy groups exist.
Not only feature updates. Also everyday bug, security updates and also operating costs.
1. Operating system
2. Programming IDE
3. Password Manager
4. Well I pay subscription for Netflix and Spotify but that's not really for the updates. Partly for new content, partly operating costs.
5. Facebook (I'd prefer to cover the operating costs by subscription, I really dislike ads)
6. Email - same as above
Also, actually I'd like all the services I use to provide feature updates now and then and continue trying to innovate.
Edit: also, if you do feature updates every now and then. Like it was with Windows or Photoshop. Then you end up having to support a lot of parallel versions with security and bug fixes which is wasted work really.
This one is a total non-starter for subscription pricing. I'm not willing to use software that will potentially cut access to all my accounts if I stop paying them monthly.
Not too mention when the features just become some massive bloat and ruin the core features of the product. Chat applications are pretty much the worst offender for this kind of thing.
When you say "working to keep you" I think you're imagining the software becoming more valuable and useful to you, such that you are happy to keep paying them.
In reality, those companies who don't do scummy things like attempt to lock your data or similar, will be out competed by those who do.
> If you sell a one time license to somebody there is no incentive for the seller to keep making the product better, to care keep caring for you.
I strongly disagree on this one. If they want to sell you version 2.0 (upgrade), they better make sure those new features are worth their money.
With a subscription model, you either keep paying them or you lose it all. Why would they improve their product when you're already paying them x/month?
On the other hand, since we are on HackerNews, this is a HUGE business opportunity.
Some time ago I bought Affinity Designer because I don't want to pay Adobe for a subscription. And going back to that website, one of the first things they promote is "No subscription. Only €54.99".
Seems obvious that any big player that is switching to subscription only, is leaving a gap for smaller companies that support people like us.
> Many founders choose SaaS simply because they want the recurring revenue. Just because you like the model as a founder, doesn’t mean it’s the right model for your customers!
The difference is you used to pay for a new version. Software 2 would be charged for another $50. Whereas now you pay for Software and it gets improved in perpetuity. It should be charged as such.
Look at our old software from the past decades. Old archived documents sitting in some obscure presentation program like Harvard Graphics. Now imagine not being able to load that data at all, even though you have the save file and the program, because the licensing server literally no longer exists.
Now imaging a world 15 years from now where Adobe totally goes under due to competitors making much better programs. Their servers go away and now, and you can't even start your licensed software without running it through a debugger and trying to crack the license check.
Ulysses is an egregious example as they cost more than MS Office in many cases, which is particularly noxious when you consider how little a markdown editor does in comparison.
I’m always annoyed about whiny iOS developers complaint about how they cannot make money without obnoxious schemes like this or gambling mechanisms. Software ISVs in olden times had a tiny market, huge expenses around retail channels and distributors, etc. They made money.
There is a difference between paying for tools that bring value, and discretionary spending.
If I am paying for software that I use to be more efficient and increases my profits, I am OK with a subscription model, or whatever model is offered. This is, as long as the cost of the software is considerably lower than the value bump I get from using it.
With discretionary spending, it takes a lot for me to buy a subscription. If I spend more than X% of a given month consuming what that subscription provides, I will consider buying it. Otherwise, I am fine not consuming that particular service at all.
I subscribe to a few magazines and Spotify. I read content online from many sources, but will not buy a subscription to each one of them. None of them are valuable enough for me to subscribe.
If there was a way to pay, say $20 per month, and have a set of credits that I could redeem at Washington Post, The Economist, New York Times, Bloomberg, etc, on a per-article basis (I make the decision after the first paragraph or two) I would jump at that right away. The system would need to be very user friendly and almost friction-free.
> If there was a way to pay, say $20 per month, and have a set of credits that I could redeem at Washington Post, The Economist, New York Times, Bloomberg, etc, on a per-article basis
i think this model doesn't work (but i'm willing to be pleasantly surprised). Imagine you read 10 articles a day, 30 days a month. That's 300 articles - that's about 6.6 cents an article, spread across many different organizations.
Those articles will need a readership in the 10,000's per article for any sort of return on investment with those sort of prices. Granted, a high quality article is going to be able to reach that, but there's limited time per person to read, and that 10 articles per day read is on the high end - most people read much less than that.
If there was a way to pay, say $20 per month, and have a set of credits that I could redeem at Washington Post, The Economist, New York Times, Bloomberg, etc.
blendle.com offers basically exactly what you're asking for. (Not in any way affiliated with the site, just an occasional user)
A year of updates.
A lifetime of Sketch
Your license comes with a year’s worth of updates.
Once that year is up, you can keep using the last
version of Sketch you downloaded, forever.
* You can always open the files you have made
* There is no incentive for feature creep caused by having to "sell" the next version to your current userbase every so often.
* The developer does not have to keep supporting old versions forever.
> 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
As a software (SaaS) developer, I find this comment outright bizarre. I find it is hard to make a living with $50/month subscriptions, if you write niche software (and believe me, you DO write niche software, you are not Dropbox), much less support an entire company.
Have you actually done the numbers before writing that "price is vastly out of proportion"? Just take the total cost (roughly 2x salary) of several people, divide by that $40/year and see how many subscriptions you come up with. I'm getting ~25000 subscriptions for 5 employees, just to break even, and we haven't even touched the marketing required to get 25000 subscriptions.
> that price is vastly out of proportion from the cost of providing the software
Furthermore, only devs complain about the "proportion of providing the software". Didn't especially Indie devs here on HN take their time to learn the lessons of value-based pricing?
I do charge monthly for my app. It's 30 bucks a year for a B2C app. Expensive some might say, fair for others. But I can at least confidently tell that most users use my app every single day. And people who won't use it for more than a few months came away way cheaper than if the one-time-fee was 30-40 bucks to start with.
Oh and providing an app as a one-time-fee for $5 or some ridiculous undervalued price that is considered "acceptable" simply doesn't work in niches.
I think that most armchair-businesspeople underestimate the costs of running a business and overestimate the number of paying customers. It is particularly ironic, because they both do not want to pay for software themselves, and also think that masses of other people do want to pay for software.
People tend to think that the costs of a software business are just the time of the single developer that writes the software. And they also calculate the cost of that time as what developers actually get as their salary. But this is not how you run a business, not by a long shot.
This gap in understanding has been widening recently, because of the completely unsustainable app store pricing.
Have you considered that perhaps a fucking text editor doesn't need a team of five employees? This isn't a brain-surgery guidance program, it's a Markdown text editor that uses a sync system written and operated by somebody else.
Users are balking at the price because it's garbage to expect them to support some gigantic business for a simple thing. This is very common (1Password has over 75 employees!!!) and the sense of entitlement developers have to try to force their users to support a grandiose business, no matter how bloated and unnecessary the people are, isn't sustainable.
It seems to me that you haven't written an application of similar complexity. Also, Ulysses is not one app, it's a Mac app and two mobile apps, for iPhone and iPad, yes they are quite different. Have you actually used the app? Seen the customizable theming system? The export to PDF/Text/ePub/docx/HTML? The way you can rearrange and group sheets? The smart folder system? And most of that is present in the mobile apps, too.
You are underestimating the complexity of writing, maintaining, documenting, supporting and marketing apps of this size. I think my guess of ~5 people is about right, they might be able to do it with a smaller team, but probably not less than 3. I'd say 2 developers and one person to do marketing/support is a minimum.
It's frustrating, but people wouldn't do it if it didn't work.
You will generally make far more money charging $5/mo forever than you will charging $50 once for identical software. Not to mention the steady cash flow.
An extreme example, but I always pirated Photoshop (as did probably half the people who ever used Photoshop). But now I pay $60/mo for it and a bunch of the other Creative Suite apps. I never would have paid whatever the 4-figure price was even when I was getting paid to make graphics at work. But I'll gladly pay $60/mo to have access to everything now even though I don't get paid for any graphics or video work.
I disagree with the author that subscriptions are objectively and inherently the superior model for web monetization. An unsung virtue of the ad-driven web it's is inclusiveness and strong worldwide redistribution effects. Everybody sees the ads, however the actual value of a pair of eyeballs is widely variable, by orders of magnitude so. It's therefore profitable to make the content free and distribute it as far as possible, to have the best chance of catching high value visitors that covert to ad action and revenue.
The net effect is that large swaths of society and indeed the world get the internet services for free, subsidized by purchases made by richer westerners, purchases and services they themselves could never afford. This model works well with the economic structure of web publishing, where marginal cost of serving an existing page to a new customer is essentially zero - even for the obese, media rich pages the author is referring to.
Once you move to a flat fee, this massive redistribution ceases. There is a clearly defined model of customer, say, those living in the middle class of an OECD country, that is targeted to maximize revenue, and a paywall is put in place that excludes 95% of the rest of the world. These are people for which 9$ 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.
> There is a clearly defined model of customer, say, those living in the middle class of an OECD country
And, of course, that must be the very individual who wants those "immersive experiences, well-designed pages with fonts, graphics, photos, and videos coming together into a compelling format."
> 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.
> Once you move to a flat fee, this massive redistribution ceases
I think this largely disregards the effects of targeting. A lot of the things (payday loans as the prime example) advertised to people less well off are reverse redistribution, exploiting the financial situation / needs of viewers.
Payday loans are extreme case because it’s the last option for a poor person. A poor persons usually has little family/friends or they are poor too. Banks won’t give them loans. If they are stuck in deep dark mud, the only way out is payday loan. Sure, some outright gamble their life and their should be some low against it. But paydays are taking huge risks in funding them, therefore their higher fees as insurance.
> Payday loans are extreme case because it’s the last option for a poor person.
This is a false dilemma. There are many options before succumbing to a payday loan. Depending on where you live, there are a myriad of housing assistance, energy assistance, medical bills assistance, and food assistance programs on the city, county, state, and federal levels. Heck, even bankruptcy can be better in some situations. It really does depend on the situation.
The other problem here is availability of information. Everyone is 100% aware of payday loans and the temporary relief it can provide you (advertising), not everyone is aware of the upwards of 20+ programs someone in need can participate in, and it can be exhausting to apply and follow up on everything. Again, the reason the payday loan industry is so successful is they are preying on human nature to take the quick and easy way, but to say they are some sort of last option is not true at all.
Maybe it's possible to create a sort of tiered system. The latest news and top stories are always free, but the detailed analysis and exposes (the stuff that usually wins awards) require a subscription. On the more local news level, maybe require a subscription to read the restaurant reviews or something.
I'm not going to pretend that this is the end all solution. But both the open web and journalism cannot survive in the present state. We have to adapt.
Gigaom tried that before, but it didn't work that well. Very few people care about the topic that they will purchase the analysis. Not enough for the business to be sustainable.
Seems like there is a market for deeper analysis done stratchery, the information and couple of others, but it barely sustains a few writers, hardly able to compete with the large scale newsrooms of WSJ, WaPo, NYT, ...
The issue with your observations is that Gigaom isn't known widely outside of big tech. So I don't feel it's fair to compare their failure to the possibility of a mainstream outlet attempting this.
My thinking is, that if they couldn't get it to work in a specific category, then it would be even harder to make it work in more general one.
In general, a very few people care about any topic enough to purchase deeper analysis of it. I'm not sure that this would work as a business model in general.
There was a short period of time when companies competed for monopoly status.
That time is now almost over - we have established monopolies.
Established monopolies use their power - that's why they fought so hard to become monopolies in the first place.
This article is saying 'gee, I liked it when Uber kept giving me really cheap rides, but now it doesn't anymore, such hell!'
The only reason you were getting cheaper rides was because it was a mafia deal, I help you now, for free, but when the time comes, you do something for me. That's how it works folks...
Subscriptions are terrible business models as well. The vast majority of subscriptions work on users that pay but dont use the system. They are not economically efficient at all.
A lot of good media properties are sold BECAUSE of the ads.
Think magazines like Vogue, with 800 pages of ads that people are looking at for the season's trends. Or other shopping magazines. Also, local newspapers provide useful local business advertising.
A good media property knows that ads are as useful as other content.
The thing I don't understand about this article is the author makes out like he's been forced into this situation, the "hell" he talks about is entirely of his own making.
I mean, the fact that paywalls are being introduced in front of previously free content does make this something to be dragged into, not necessarily something that's been walked into. If your habits for 5 years involved following links to free content, and that content still exists but is now paid, you're now losing access to things you previously had -- which is tantamount to force.
People need to understand that the alternative to ads is paying hundreds of dollars a month in subscription fees and then still not having access to all the services you would have had access to in an ad economy world.
People in Europe will soon get this wakeup call. Services that were only marginally profitable are already shutting down because of GDPR.
I'm confident that the EU government and its citizens have little idea of the consequences that will result from their privacy legislation.
>Maybe if the service is only marginally profitable without acting unethically it should shut down.
Also I love this neo puritan thinking. I'm sure all the users of these services agree with your ideology and you forcing it down their throats is for their own good correct?
No, tracking is unethical, which most ads rely on.
And yes, it is for their own good to not have thousands of databases with their data littered across the internet.
I know, this is not a very American way of thinking, but no one can be an expert at everything.
Most people are not experts at computers and even less can grasp the outreach and effects of their data being everywhere.
These people need help just as much as the average guy needs assistance with doctors. If they knew enough to tell when a doctor is bullshitting them, they could probably become a doctor, too.
>And yes, it is for their own good to not have thousands of databases with their data littered across the internet.
"With their data". Aka whether or not they liked a group pertaining to motorcycles or whether they searched for fishing rods on google. Yeah, we definitely need to shut off what is the most consumer friendly way of monetizing services in history so that a database of inane shit that is only relevant to marketers isn't tracked.
Well, it's not only relevant to marketers. Your two most innocent examples are not the only type of information that's going to slip in there.
And even with those two examples, you just have to be creative to find ways for them to damage you:
You'll probably have to pay more for your health insurance, if they find out that you enjoy motorcycles.
And if your next potential employer is vegetarian, they might pass on you for fishing, a.k.a. killing things as a hobby.
Someone wanting to rob/extort/kidnap/murder you, might look for you at lonely lakes in the region.
And these are the most generic examples of this supposedly useless information being used against a person.
Someone who happens to have an actual use, is going to be even more creative, since they'll find themselves in some particular situation where it's useful.
And again, there's going to be more information. They can sift through an entire list to find the ones that are useful and they can combine multiple pieces of information, too.
How showing ads is against GDPR? You still can show ads, you just need consent for tracking users. If they are going out of business because of GDPR they were not just showing ads.
Ads existed before tracking. DDG uses ads based on the page content, not what is known about the user. This is actually how ads were before everyone went tracking-happy.
It is a model I prefer simply because it is more inline with the content I'm viewing. I'm more willing to let those ads get whitelisted because they're more likely to be related to the content I'm looking at and less about "what do we think saratogacx really wants today based on all of the data across the web."
Well there are genuinely people out there who don't use the content. Our attitudes to media and who should be watching what haven't changed much from the broadcast era. "I'm not one Facebook" is the new "I don't watch TV.
I'm sure there are but that has nothing to do with my point.
Anyway, I personally never use facebook because it is not something I find interesting. Do I feel pride in that fact? No I don't because I have an equally harmful relationship with reddit and hackernews. I always have to laugh when I see people state as a point of pride how they have deleted their facebook accounts on different social networks. If anything I think reddit and hackernews could be worse because I'm ingesting unfiltered opinions from random strangers.
Yes, the thousands of tutorials/guides and content that people enjoy watching is trash. Everything that I don't find agreeable is trash.
>No need for funding. Cost to setup is zero (provided by ISP) or close to zero (basic hosting or domain name registering).
Yes, no need to give people money for work they do.
Do you have any respect for the work that goes into the content you read and or watch every day? Or do you think people should just be content volunteering their effort for no reward?
>The only point that holds in your list. Could perfectly be funded by ISPs as part of our Internet subscription.
Yes. Perfectly. Let's just tack on another $50 a month. Or are you actually suggesting that ISPs should just do it out of their good will?
Most of those are covered by either subscription models or Patreon. Some of them (news, blogs, tutorials) can, like Wikipedia, be funded with non-profit models.
For tutorials, I pay $30 a month for a PluralSight subscription, $12-$20 for the occasional Udemy video and watch vendor supplied tutorials from Amazon and Microsoft.
I hate ads for video content. I pay for Netflix and ad free Hulu. I use Plex for ad free content from CBS and the CW via by subscribing to the channels. It’s more ad blocking then piracy. Plex scrapes the content from the networks’ website real time and transcodes it and streams it.
I pay for Apple Music and before that iTunes.
I would pay for a high quality news source, I use to pay for WSJ.
> For tutorials, I pay $30 a month for a PluralSight subscription, $12-$20 for the occasional Udemy video and watch vendor supplied tutorials from Amazon and Microsoft
Good for you that you can afford that. We all know the dream of the internet was information gated behind pay walls only accessible by the well off.
BTW, I agree, but I think the opposite is the case. I strongly suspect that in fact we'll see more content as the ad economy collapses. People don't understand just how much content is driven without ads for other reasons (like HN itself) and once more and more content gets locked behind subscription walls that indeed opens the door for free content to thrive. Combine this with strong, pervasive ad blocking and what you have is a recipe for the return of the free web.
I only watch ad-free videos from content creators I fund on Patreon. I'm sick of Youtube's shitty advertising - it's as bad as TV when I was young, right down to running terrible political attack ads when I'm trying to take my mind off politics.
> - music
I don't think this is funded by ads. It's funded by VC dollars, since just about every streaming site is losing money right now. More to the point, my musical tastes are pretty eclectic so I usually have to buy Vinyl/CDs to get the music I want.
Thing is, ads don't have to track users as individuals or at all. TV ads and print media ads are based on the content, why can't web based ads also be based on content? No more GDPR issues, we still get free content. Perhaps we can still do a pay-to-remove-ads option.
If people want internet without ads then need to pay for the service with different means. I can see a problem that it is extremely difficult to find a company that would process payments for you if the website you have is for adults only for example. Potentially this could be solved by cryptocurrency, so that you can run your own payment processor, but I have not seen a solution for subscriptions yet.
I think the problem is the pricing model. If I watch one Netflix movie a month, it’s not really worth 11$ to me. These subscriptions should have tiers starting from few cents - but it may be less a Netflix problem and more a problem of labels and production companies who may not be willing to see it that way and force higher Subscriptions implicitly.
the thesis is wrong, of course compromising the entire article. you/we aren’t getting previously free content, now for a fee. you are getting content previously paid for with ad dollars, dried up thanks to advertisers abuse (leading to adblock).
this is actually what I've been moving towards. Over the years I've become addicted to way too many news sites be it tech or politics and given that I've noticed the same trend as the author I went the other way, just prune my consumption habits.
I've cut it down to one physical newspaper subscription, use the BBC or DW or other public news sources only once or twice a day, and that's pretty much it.
The most notable thing is that I don't feel like I'm missing out on anything, I was just reading the same stuff obsessively before anyway. It's a little hard these days to escape the event driven newscycle but it's not a bad idea.
I wish I could just pay $x/mo for unlimited access to all media. It would get distributed to content creators proportionally based on my time using websites, music, videos, and games. No ads or subscriptions.
I can't imagine how such a system would be implemented though. And I'm sure there would be new unintended consequences with such an incentive structure. But something like that would be nice!
If the intro video is to be believed, that seems like a terrible idea in so many ways. The video explains it like "you view ads, your browser privately tracks whether you watched them, and awards the website and the user with BATs". So while we now have middlemen in the form of ad networks, with BATs we have an additional one to convert that currency into your local currency. Additionally, the ad network will have to believe the browser that the user actually viewed ads at all (DRM all over again). And what blockchain has to do with this is, as always, unexplained.
Right now, earning BAT by watching ads is not yet implemented. After you use up the free 10 BAT you get on first install, you have to buy more to keep paying the sites you visit (this is reasonably frictionless at the moment, and is likely to get more so). I assume there aren't many people right now that buy BAT to send into the Brave wallet (though I do, and know of others that do), but it's still early days.
The part of their proposal I would suggest fixating on is the fact that if you make deposits into your Brave wallet, you get to block ads (right now, ads are blocked regardless), and publishers will be able to turn off their anti-ad-blocking measures if they see you're using Brave, since you'll be providing them with revenue. The hope is that in the future, paywall sites like WSJ may allow you to bypass their paywall if they can verify that you're using Brave.
There is a lot of uncertainty right now about how the whole ad system will work, because the team is focusing on making the browser robust enough so it can compete with FF and Chrome. But in the meantime, they're also getting useful information about what real users and publishers are actually keen on.
I suspect that the more obvious flaws, like the ones you pointed out, will be accounted for once the system is fleshed out. They have not shied away from moving away from their original proposal to more practical approaches.
Regarding the earned BAT by watching ads, I believe that it cannot actually be withdrawn, only used to pay publishers, but again, things may change. And I agree that the blockchain may superflous here, but using it has allowed them to get the funding to get things off the ground and attract users, which counts as a valid use in my book.
Well that's already the case, isn't it? Getting someone to read a Pulitzer prize winning article online currently gets <1 page view's worth of ad revenue. Having someone look at endless pages of memes gets many page views.
This model would require some way to indicate the cost of producing content (e.g. sending journalist overseas with risk to life and limb, versus 30 seconds making up a meme).
And unfortunately, it has the huge problem that a lot of technologies that could track what you do could be misused. An anonymizing scheme similar to Apple Pay might work.
With the first point, that's already a problem with an ad based revenue system. A life-risking article still just generates <1 page worth of ad revenue per reader, the same amount as a no-effort article. Maybe this system could include some sort of tip-based approach to reward quality content. Maybe 10% of your monthly $x is distributed based on your favorite content of that month.
> We didn’t need paywalls on the early web because we focused on plain text from other users.
> Plain text is easier to produce
So can we go back to plain text?
Actually is this even true? Take a newspaper like the Washington Post. Now I've seen All the President's Men, where two reporters spend days and weeks, driving and flying around the country, for just a few articles. I know Watergate was an usual amount of investigation, but I still would think the research and writing is the most expensive part of an article.
> Today’s consumers [...] want immersive experiences, well-designed pages with fonts,
> graphics, photos, and videos coming together into a compelling format.
I smirked because I have JavaScript turned off. In fact I run my own little script that strips out all the CSS and starts over.
Of course a member of Hacker News is unusual, but I know my family members are the same way, always complaining about how complicated websites are. Maybe we're all just old fuddy duddies. But if it's the young who want all this fanciness, those are the same people who aren't going to pay more than 99 cents for a newspaper subscription.
I still think pretty websites should not be a huge expense. Hire a graphic designer to give you a framework, some stylesheets. Custom multimedia affairs for each article have always, always, always been annoying to me.
> Take my colleague Connie Loizos’ article from yesterday reporting on a new venture fund. The text itself is about 3.5 kilobytes uncompressed, but the total payload of the page if nothing is cached is more than 10 MB, or more than 3000x the data usage of the actual text itself. This pattern has become so common that it has been called the website obesity crisis. Yet, all of our research shows people want high-definition images with their stories, instant loading of articles on the site, and interactivity. Those features have to be paid somehow, begetting us the advertising and subscription models we see today.
It was kindof upsetting to read this after having switched the article into Firefox's reader mode, because the page was completely unusable.
If you want to talk about consumers' wallets not existing in a vacuum: if your 3.5 KB article is sending me 10 megs of crap, then your mobile users' carriers are charging them more than the advertizers are paying you.
There are some real challenges in figuring out how to fund journalism, but if bandwidth is one of them you're doing something very wrong.
I use firefox on mobile for ad-blocking and reader mode. Sometimes I get frustrated when firefox gets unstable and try chrome, but the lack of a proper reader mode and no way to disable ads makes half the internet completely unusable. I find it hard to believe that average chrome using consumers are doing anything more than tolerating the current state of the web.
Mobile users and rural satellite users like me. I was also struck by:
> We didn’t need paywalls on the early web because we focused on plain text from other users. Plain text is easier to produce, lowering the friction for people to contribute, and it’s also cheaper to store and transmit, lowering the cost of bandwidth.
I still want plain text, and I think there must be others like me — we just want to read what they have to say, which is more immersive than the ten megabytes of dreck they sent me could possibly be.
Over 6MB of those 10MB is just one bloated photo [1]. It can be compressed down to 1-2MB. Moreover, if it was a proper responsive image, it would not be larger than 100-200 KB for most readers because a good JPEG compressor can pull 2 bits per pixel [2].
Ironically, image optimization apps don't get that much coverage.
I just took that image (which is 3300 x 2200), resized it to 50% and got 1.05 MiB, instead of 5.85. Threw it through JPEGMini (a paid product, mind you) and got 729 KiB.
Guetzli is nice, but it's slow as balls. JPEGMini is a decent alternative. (I'm a happy customer of JPEGMini, BTW. No other affiliations.)
That image is a good example for any perceptual encoder. At 50% size it's 600KB (487KB with current master), and there's still a lot to be unhappy about, e.g. a hidpi image like that can be compressed a lot harder.
Not to be that “just add blockchain” guy, but this would be a great usecase for permissionless cryptocurrency micropayments, e.x. Lightning Network. Create an open protocol, build it into browsers, let content sites ask you to pay $0.01 (or whatever) to view an article. Maybe you could set your browser to automatically pay for the first N articles or M dollars per site per day. Or maybe a site could offer an unlimited subscription option through the same system.
Blockchain isn’t necessary. You can have a debit account system and change cents per article without the high friction cost of making people buy some cryptocurrency.
Of course, but then it's not open, decentralized, and permissionless like the web is.
In that respect there's always been an impedance mismatch between the web itself and the payment systems you could use on the web. Cryptocurrency has the potential to change that, which I find interesting.
I like software subscriptions. It’s a way to ensure that the software developer is going to have a predictable revenue stream to continue to improve features and fix bugs in the software. That is valuable to me as a user.
I agree. This is an often overlooked or under-appreciated aspect of these models. Especially for smaller teams or individual software developers, it can provide some consistency in income and allow them to budget time to continue to invest in the software. Additionally, pricing models that let you keep your current version of their software when the subscription expires are pretty reasonable as well. I believe the Jetbrains licensing works this way.
It gets a little more complicated with bigger companies and software though. For example, how can adobe price Photoshop fairly for a hobby user that uses it once a month and a production designer who uses it 8 hours a day?
Do note that it depends on the subscription model.
If they give you a perpetual license when terminating the subscription, it would be good but if they won't let you use it, they just get paid by locking you up with less motivation to keep improving the software.
The issue is that they are charging too much, not that they are charging. If they consider that people start paying for everything they consider worthwhile, at some point even some of the things they love that is worthwhile will have to get the chop.
Now if they charge less, then that person (for instance, me!) can more easily pay for everything they love.
They just don't seem to understand that people have a certain amount of money, they cannot pay the prices for everything if they try to gouge too much money. Basically, they will get the more well off folks, but the issue is that there are only so many rich people - there are more ordinary people than there are wealthy people so subscriptions that cost a lot won't be much for the rich, but will be a lot of everyone else.
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[ 3.5 ms ] story [ 309 ms ] threadI still hate adverts, but at least here its not a malware-fest. I still hate ads as they are parasitic in one of our most important resources: attention.
When I go to certain sites like Vox, I see repeated ads for women's clothing (wtf?, I'm a guy) that makeup around 40% of an article AND clickbait to other sites via Taboola.
One analog of this phenomenon are loss leader products in retail. Loss leaders in grocery stores (sometimes produce or in the case of Costco, hotdogs and soda for $1.50). Loss leaders have been responsible for putting lots of small businesses out of business.
When enormous companies offer products for free, that others charge for, it makes me wonder where it all ends. Many internet companies have been put out of business by free services offered by the bigger guys.
A similar issue is the endless supply of people or businesses willing to take a loss on their product, either because they have VC money, some other revenue source, or because they are just ignorant. Google was able to lose money on YouTube for the better part of a decade, for example.
I once had a thriving business buying items at US postal auctions for resale. But the get rich quick bloggers eventually found out about the auctions and then, for years, an endless supply of clueless suckers just kept showing up and paying above MSRP for things like MacBooks and other high end electronics. Ya, they would lose their shirts, and never come back, but there were always fresh meat each month to do the same thing. So most of us that were actually making money previously, had to move on to other things.
It seems like this phenomenon could become more proliferated as some of these core internet companies get larger and larger.
I can't for the life of me understand how the HN success story Dropbox has a long term future.
For the same $9.99 a month that you pay for Dropbox's 1TB Of storage, you can get....
- 2TB of storage from Apple for iCloud
- 1TB for each of 5 users on One Drive plus access to the entire MS Office Suite for 5 computers and 5 mobile devices
- 1 TB per user plus everything else you get from G Suite.
-Amazon Drive is 1TB for $60 a year.
Yes I know that Apple isn't aimed at businesses, but the rest are.
Google and to some extend Microsoft want/expect you to do everything in the cloud. Their sync clients are generally less reliable, do not support P2P sync, and do not do block-level sync. Google even syncs placeholders for Google Doc documents, rather than real local office files. Microsoft encourages people to create/open documents directly on/from the cloud (with its standard dialog boxes).
If you want to own your data and reliably sync them between your machines, Dropbox is the best choice. And probably they'll continue to be the best, because sync is their product and not some way to funnel people in other products.
1. Free chitchat
2. Links to content.
HN isn't much without the external content.
Is there any metric for people clicking the external link compared to unique commenters?
This misunderstanding is why the internet is gradually becoming more and more centralized. People don't want to pay money and they don't want to see ads. The only sites that can brave that reality are charities, sites that confer other benefits to the organization (like HN), and the few major services that people will pay for (like Netflix). Not much in between, and the sites in between were basically enabled by ads like the collaborative writing forum I grew up on.
A large percentage of people simply will not pay for website access, no matter how low the price. So you get your money from those who do, who value the service so highly that parting with it would be huge pain point for them, and, so Bloomberg assumes probably after extensive surveys, those who feel that way about their publication, will likely have 35$/month to spare for the privilege.
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.
Look at the App Store as an example and how hard it is to get people to pay $1.
Besides the people who are willing to pay are by definition people who are willing to spend money - the same demographic that advertisers covet the most. Meaning they can't target their best customers for advertising.
I'm not doubting that's tough; but it's significantly easier to get someone to pay $1/month than $35/month. People aren't completely stupid; they won't just blindly pay any amount just because they'd decided they'd pay something.
Like I said though; if I was making this decision, I'd start high.
I highly doubt it. Also, while it is possible that the people at bloomberg are so incompetent that they did not consider how to maximize their profits, I'm going to give them the benefit of the doubt and say that they did.
I never said it was likely, just possible. And I wouldn't question the incompetence of anyone these days; big companies make questionable decisions all the time ;-)
Just like most people wouldn't pay 2000 a month for access to their terminal software.
I’m looking at you, Wired Magazine.
It's OK to not have everything, you know?
I don't think people don't complain about stuff enough, we get taken for rides by big companies all the time while their CEOs take home massive pay packets. People should fight for better services and lower prices more; it works!
I purposely do not add new aggregator sites when bored. In fact my fallback (Fark) is woefully out of date. If I feel the urge to read that I immediately pick a side project and open it up.
We have way too many consumers in this world. Not enough producers.
Tho I do troll Craigslist for machinery when bored as well but hitting the limits on the amount of tooling my garage can hold.
> All of these subscriptions are starting to add up.
Just thought I'd save everyone the time of reading this article. Not much substance.
>"Consumers want immersive experiences, well-designed pages with fonts, graphics, photos, and videos coming together into a compelling format."
We didn't win but it definitely piqued the interest of the crowd and the judges (Sam, Michael, and Adora). We're not pursuing it but hopefully others do.
The problem I see with bringing publishers to the table is: How do you distribute revenue? Pageviews? That's what you don't want papers to optimize for right now. Equally? Hardly seems fair. Who decides which publishers are on Netscoopx? What ratio of subscribers to paper subscriptions should Netscoopx maintain?
Overall the idea reminds me of Grooveshark and Aereo simultaneously.
While something like Netflix/Spotify would be nice from a user/consumer perspective, there is both the difficulty of gathering everyone under one platform and the risks of having a single (or a few) number of brokers of news across the board.
1. Whitelist the site
2. "Nah, journalists should go hungry" - this dismisses the popup and lets you read the article with your blocker intact
3. 5c - read the article ad-free
4. 10c - 1 hour of no-ads
5. 30c - 1 day of no-ads
I've converted to US cents, but even in local currency think these prices are extremely reasonable, and I'd love to see more sites offer similar rates
There still doesn't seem to be a "Twitter of Micropayments" yet.
Gratipay shut down, (RIP) https://gratipay.news/the-end-cbfba8f50981?gi=54bc4ed25327
Patreon takes a percentage, which, to me, seems unjustifiable.
But then you point out that there is no viable micropayments platform. Doesn't seem like there's much to mention beyond "yup, still doesn't exist."
I didn't suggest, I stated it baldly.
> But then you point out that there is no viable micropayments platform.
No I didn't. I mentioned one that is defunct, and one that is popular but that I have a problem with personally. The article I linked to about Gratipay references Liberapay (https://liberapay.com/) and Open Collective (https://opencollective.com/) but I didn't want to mention them because I haven't checked them out myself. There are probably others.
> Doesn't seem like there's much to mention beyond "yup, still doesn't exist."
And yet this low bar is unsurmounted?
Wrote a whole article about "Subscription Hell" yet won't step over to the watercooler full of lemonade.
Good day sir.
Sure there is: "Micropayments are fundamentally infeasible".
Which is to say, payments are trivial to do. There have been dozens and dozens of startups doing online payments in various schemes since the beginning of the internet. But the fraud problem is not solvable on that kind of scale. Batching payments such that you buy one "thing" for at least a few dollars gives some level of assurance that one human being looked at the transaction and that the seller gave enough thought to be sure it was worth selling as a unit.
That all falls apart when you get to "one article" scale. You want this to be a purchase that the user doesn't even thing about (because seriously if I have to stop and think whether I want to pay $0.13 to read an article the answer is "NO"). But without that promise of thought it becomes impossible to reasonably authenticate a transaction. Users will be absolutely flooded with fraud schemes tricking them into OKing these tiny things.
This is what killed ad-supported platforms too.
My point is they should charge in proportion to the service/value they provide, not in proportion to the size of donation/patronage.
It doesn't cost them twice as much to process a donation twice as large, so: "unjustifiable".
Can you justify that? (Not rationalize it, justify it?)
Larger donations have a higher risk of fraud and chargebacks, so on average it will cost Patreon more to handle this. Additionally, it's not uncommon for credit card companies to charge a fee, even if Patreon wins the chargeback request. If a user donates $10 to a specific creator and initiates a chargeback, who should end up paying the chargeback fee and the donation amount (if the chargeback is successfull?)
You can't charge the user who initiated the chargeback, especially if they were successful. The only thing you can really do is ban them from the service in the future. So, do you take those fees from the creators who received the donation, or do you spread the cost among other creators/donors?
You can't realistically charge the donors. If I were to go to Patreon to try and give someone $5 but was told, thanks for donating, but we're going to charge you an extra $2 because that's the average cost per donor to provide the service, develop new products, advertise, etc., I'm not going to donate. Most people won't.
So do you charge the creators? Let's say the cost per creator is $20/month. If a creator only earns $10, do they then actually owe $10? What creator is going to use the service if they might end up owing money?
The answer, of course, is you figure out the average percentage of a transaction you need to take. You do this because it provides both donors and creators clear information on how much money goes to the creator, what goes to the payment processor/credit card provider, and what percentage goes to Patreon.
But I mean, if you really think that's not a good justification, why not start your own competing option with a business model you think is more fair.
(Everytime I talk about cryptocurrencies on HN, I get downvoted without any proper response. So bring it on! ;))
Its also a nightmare for those of us who have to keep a close eye on AWS spending. Someone spins up an x1-large you didn't notice? Too bad, now pay us.
Its a terrible model for consumers in general. My wallet should not be open by default.
The issue many people, myself included, have with subscriptions are that you pay $x / month whether or not you read that month's product. And whether or not you read every article or just one. So for me, as a consumer, my "price per article" goes from small to literally infinity (pay but read zero articles).
Now the pay per article model works so much better. You can charge me to read a single article but I pay nothing if I read nothing. This is the model that blendle.com uses and my experience was that even though their "per article" price was much higher than I originally thought reasonable (9 cents to 50 cents) I was paying basically $50 a month for subscriptions to the publications that I read (WSJ, Economist, NYT, WaPo, etc) and with Blendle I end up putting maybe $15 or $25 per month into my Blendle wallet. So its half as expensive for me and I still get to read, advertising free, any article in those publications. Blendle's money back if its click bait policy is the clincher. When you read a lemon you get your money back.
I win (save money) they win (they get paid for their journalism).
I've had the same gripe with games for years. I stopped paying for Xbox live and World of Warcraft because they're the same - if I only played for a few hours in a month, I've paid over-the-odds. I can't predict in a given month how likely I am to have how many hours, so I end up paying them £0. They could get more money out of me if they had a better PAYG or tiering option.
That’s the secret. Price your subs so it’s a better offer for the lightest of users. Not hard in the music business that was ripe for disruption.
And I think that’s the message in the article. Subs themselves are not the problem , but the way they are priced . (Although the fact that he spends so much money on subs kind of negates his argument. It seems like people like him are happy to pay which reinforces the soundness of the business case).
Incidentally I subscribe to ms office even though I would never have paid a one off fee for it. I think it’s cheap enough to justify its value. I also subscribe to Netflix but should really cancel. In europe there is not much content there. When I first got it i watched maybe 4 or 5 interesting documentaries now I never see anything there worth watching. I might unsubscribe after my daughter finishes binging gravity falls. (She’s not a big user either we both find YouTube more interesting and relevant than European Netflix)
That said, if Google Play Music Unlimited was either half the price (£5/mo) or was shareable with my wife for the current price, I'd probably have a different opinion!
Free shit forever?
I guess I'm a subsidiser; I don't use an ad blocker (for many reasons). I'm also slightly of the opinion that people using ad-blockers have made things worse for those that don't :(
I don't mind ads - I don't even mind advertises tracking some things to give me more relevant ads (heck, I'd tell them what I like to get more relevant ads).. I do mind obtrusive and noisy ads, and the security risks that tend to come with them (and other third party content) being slapped on every site with no thought though; and for some content I would pay to a reasonable fee to remove them.
The problem is most publishers still don't necessarily believe this model or think it'll work, or think it's too risky. Blendle was able to do it because they started their own platform and essentially required little work from the publishers themselves to integrate (Blendle devs did most of the work to import the content, publishers just had to agree), and the Blendle solution doesn't "rock the boat" for these publishers, i.e. doesn't change existing users on their web site's behaviors.
Intuitively, I believe it's much easier to find one person to pay you $30 a month for quality journalism than to find 10 people to pay $3 a month.
Neither of us have data to back our assertions but my argument is that the people that care about and read quality journalism are well off people and the marginal cost of paying $10 or $30 a month is not significant for them.
>Blendle was able to do it because they started their own platform and essentially required little work from the publishers themselves to integrate
I've never heard of blendle until reading the comments in this topic but just as a comparison, the WSJ has 1,270,000 digital subscribers paying $45 a month. Blendle has 550,000 users.
One of the challenges is that if you look at this as a single consumer / single producer model it is very hard to see the economics. That is why internet advertising is also hard to see sometimes. Nearly everyone I know tells me "How do they make any money on internet ads? I never click on them." And for lots of people that is true, but for another population it is not true. And when you look at page views as a 'population' of say a million different people, and 1% of them, or 10,000 of them click on an advertisement that pays $0.10 per click, that is $1,000 of revenue from that one article. And if the marginal cost to host a single article on a web site is $1 per month, there is tremendous leverage there.
So this model insures that nearly everybody that reads and article has paid a small amount. This is more reliable income than Internet Ads even with 99% of the readers not clicking. And the article lives forever, and as we see on this web site some articles get cycled through popularity again and again every couple of years. People who have blog sites and track metrics see this effect when someone puts them on Reddit (for example).
A static article page can service a lot of page views with very little hardware. Nginx on a current server can serve the same article up at 50,000 page views per second if there is enough network bandwidth and the article is on an SSD. Hosting costs go up when you add a bunch of dynamic content but much of that can be hosted on CDNs and distributed to the edge. Done with any mount of care and planning and it costs little to host material on the web.
You have no data to back any of your hand wavy assertions. You are not smarter than the people that decide the business model for these publications. People are not willing to pay 10 or 20 cents to read articles that they clicked on a whim. We already know this from the app economy.
It isn't a question of smart or not smart, it is understanding that the economics of goods models we developed during the industrial revolution are not directly translatable to the economics of information.
I've been a fan of Blendle from the start because based on my research to date, I knew that if they could be operationally efficient enough, they would be able to facilitate per article transactions in an iTunes like model. And if they could do that it would have a larger impact than iTunes did on music. They continue to hum along and I continue to use them for that.
The "App" market is interesting because as I characterized information, Apps don't qualify, rather they contain algorithms. Because of that, their value is created through novelty rather than being intrinsic.
It’s not like an a la carte model couldn’t also fund profitless journalism, but I think it might push things even more in that direction.
I think they do understand what people want, but they have a healthy, eat your vegetables kind of take on things too.
How about before I purchase there's an excerpt and the number of words that lay ahead? I mean, it couldn't be that hard to distinguish comprehensive articles vs the norm.
> How will you evaluate whether an article is going to be worth the price?
I wouldn't know. And if it wasn't worth it, I probably wouldn't purchase a future piece from the same reporter. That said, there could be a review system. (Just brainstorming here)
Charge me $30/month to read your site at all (bloomberg) and you're never making a cent off of me again.
Edit: also, and this goes to the person upthread, even if mainstream media goes for gossip I'd still think we should make up a nice niche?
For me the nice thing about blendle is cheap access to several sources, if they have a prepaid plan that charges monthly at $10 for 60 articles (16c/article), I would do that.
I think it depends a lot on if you experience journalism as more similar to a gym (exercise for your brain) or netflix/hulu (entertainment).
> The issue many people, myself included, ...
> my "price per article" goes from small to literally infinity
This is a problem for the producers too if they try a pay-per-unit model instead: their income could waiver unpredictably between more than enough and literally negative (not meeting the production costs). Either way, someone is gambling.
> Blendle's money back if its click bait policy is the clincher.
That sounds like something I'll have to investigate. Thanks for the pointer.
Why do you think they don’t understand? AFAIK, Blendle’s business model (even at those prices you think are too high) hasn’t proven viable yet.
Look what happens whenever a city adopts a $0.05 plastic bag tax. When Washington DC did it, plastic bag use dropped by 50% - 70%. I'd see people that just spent $30 bucks at the store with their arms overflowing with stuff rather than pay that extra nickel.
I'd expect prompting users to choose whether reading a story is worth $0.05 to them every time will cause them to read and engage significantly less.
The example that gives me a little bit of optimism in the long run is power: people don't really have a problem with the fact that their power bill is pay-per-use, and if it discourages them from unduly wasting power, all the better.
But the problem you describe is still significant: people are _already_ used to that dynamic for electricity, and it's not clear to me how to get over the hump where they'd treat micro transactions for publishing in the way you describe. Most people aren't remotely rational enough to realize on their own that stressing over each minuscule payment has a cost of its own and coming up with a better strategy for handling it. (In the electricity example, this is the difference between 1) calculating the power usage of each device in your house and considering whether you want to pay a few cents before flicking that light switch or 2) conserve in common sense ways and adjust if necessary based on your monthly bill.)
> When Washington DC did it, plastic bag use dropped by 50% - 70%. I'd see people that just spent $30 bucks at the store with their arms overflowing with stuff rather than pay that extra nickel.
Case in point... This may be one of the stupidest things I've ever heard. My city has had a ten cent bag tax for a long time now, and the way everyone reacts is 1) carry it in your hand if it's one or two small things, 2) pay a freaking dime if you have too much stuff and be slightly more likely to remember your reusable bag next time.
The bag tax, pay per article, etc. do.
But when I _do_ forget my reusable bag for whatever reason and have an unwieldy amount of stuff to carry, it would be beyond idiotic to ride that psychological effect all the way into the absurdity of stuffing my arms full of thing (I gather from the original comment I responded to that he wasn't talking about carrying an item or three).
The price is so low that there is little friction. You also get a full refund if you are disappointed, further reducing friction.
Furthermore you don't pay every time but you pay from an account with Blendle.
What are you doing with those? I have one reusable bag which is 11 years old now. I just throw it in the laundry about once a year and it's as good as new.
The tone of the engagement matters, too, because it works on psychological levels most people aren't aware of. It's essentially brainwashing. To me, "Buying" means assessing and confirming value, "Upgrading" means reassessing the value and how relevant the new features are to me, and "Renewing a subscription" means to keep the status quo and automatically remain up to date. Upgrade notifications feel like nagging, while subscription renewal notices are almost alarming.
Nag all you want because I can just use what I have now. Yay! I upgraded and now all the icons are in different spots. Maybe they added something interesting. I hope it still reads my old files.
End the subscription and who knows what happens. Yay! I renewed my subscription and now all my most precious files are no longer in danger of being wiped from existence. Subscribing sure saved my butt. I'm so glad I did!
Overall, though, I think the subscription model exists to take advantage of inattentive customers, which makes up the bulk of any user base. A person forgetting to cancel their subscription is as good as a new subscriber and there are all sorts of situations where that can happen to anyone. Hell, those are probably the same customers that didn't notice when a new version was released, so the company even makes up for missed upgrades. I have no real data to back that up, but it fits with a lot of personal observations.
This may be true for some services, but I don't think it's true of the most successful services. Think about Spotify and Netflix, most users are fully aware of their subscription.
Yes! This is extremely puzzling for me and I would love to know why it happens. I am mostly free from this and do not think about trying a $1 app any longer than I do about buying a cup of tea (and always pay for an ad-free version if I still using the app a week later).
However, I am in the minority: hearing this my friends roll their eyes "you are paying for an app you may not use long term? You must be rich. Look for a free app instead, man".
My purchase of <$2 apps in the Google Play store went up tremendously when I could do it with just a fingerprint read instead of a full password entry.
The amount of money I spend with Amazon's one-swipe checkout is obnoxious.
Ask me to give you my full address twice and manually enter a credit card, even if you have an item I really want? Nope, probably not doing it.
Those companies deserve to die.
You or I may prefer the microtransaction model to free with ads or subscription-based, but I suspect there's a lot about the market that we'd prefer was different, and that's because we're not typical of the market.
I feel I used to follow Google quite closely before and I cannot remember seing any hints of this.
My feeling has rather been that any form for paying has been looked at as second class compared to ads at that company.
Youtube Red still isn't available here and I haven't heard a thing about the idea they had last year that we could pay to avoid ads.
Do you have any pointers?
More recently they introduced Subscribe With Google.
Would anyone care to describe why it wasn't great?
(Short summary of why I think it should be great: I want to support the sites and blogs I read. I don't want ads as they are still next to useless.)
That would explain why it didn't succeed.
In fact it would seem like it was rigged to fail which wouldn't surprise me as both Google and Facebook seems to prefer ad revenue over payments.
This is exactly the kind of conspiracy-theory mindset I was talking about in my upthread comment. What reason could they have for preferring ads, given the extra risks (esp legislative) and PR issues associated with it?
As I said, Google (I can't personally speak to Facebook) has put effort behind getting micropayments off the ground in a couple different formats, but there're substantial hurdles and substantial pushback on the part of publishers. The fact that they're not jeopardizing existing revenue by forcing pubs to do things they don't want to doesn't mean that they prefer advertising revenue per se.
> This is exactly the kind of conspiracy-theory mindset I was talking about in my upthread comment.
This is however unneccessary IMO. Im referring to observed behaviour. I might be wrong but calling it a conspiracy-theory mindset doesn't help.
> What reason could they have for preferring ads, given the extra risks (esp legislative) and PR issues associated with it?
I don't know but if I had to guess Googles infrastructure and organization is heavily optimized for it.
> As I said, Google (I can't personally speak to Facebook) has put effort behind getting micropayments off the ground in a couple different formats, but there're substantial hurdles and substantial pushback on the part of publishers.
Ok, so now we are finally talking.
So the reason I couldn't "buy the ad spots" and sponsor writers of tech blogs (and here I'm referring to personal blogs, not news outlets dressed up as one) was because "publishers"?
Do we really think blog owners with google ads would complain if parts of their revenue came from users who hadn't had to suffer ads?
I can see one issue here and that is a lot of sites would probably try double dipping by trying to install a second ad network.
I'm honest but a bit annoyed here: I guess it is because Google used to be focused on creating good products for me but now it is about whatever publishers want.
Edit: also this doesn't explain Google's hesitation to introduce Youtube red, does it? Or are publishers also active in deciding what Google does on their own properties too?
The reasons it's stuck in infancy, then, is the list of sites which support it which is here: https://support.google.com/contributor/answer/7324995
(Linked to from https://contributor.google.com/ )
There are about two dozen sites, and even then the only one I even recognize is tvtropes.
EDIT: thanks to the downthread comment, I see that the pilot I was thinking of apparently became Contributor. This is pretty much exactly what many in this thread are talking about, with the significant difference being that there are few participating sites, and the ones on there are generally targeted at the kinds of demographics who care an unusual amount about avoiding ads. The reason there's barely any buy-in on the content provider side is because most sites know that their readers wouldn't like it.
Netflix released data showing that people added documentaries and art house movies to their queues but never watched them. Instead they watched the same action movies and comedies over and over.
It’s the same reason as why gyms charge per month not per visit. What people say they do and what they actually do is barely connected at all.
Their only positive income is investment rounds. Negative return on investment.
It’s like subsidizing your company with credit cards. And having a business model of “apply for new credit cards”
But then I realize that artists are complaining about getting screwed by spotify, studios are jacking up prices on netflix, and even services like classpass are changing. I wonder how many (if any?) of these subscription a la cart businesses have actually reached equilibrium.
It's worth it to me to avoid managing dozens of separate logins for every site.
It also allows you to get a refund after reading an article if you think it was clickbait.
Articles are $0.09-0.50 in my experience.
You can scroll through their list of recommended articles, but if you already know the article you want to read (if, for instance, i find a WSJ article on HN that i want to read) there's no easy way to pay for that article on blendle. They need a tool that lets me paste in a canonical article URL and get the corresponding article on Blendle.
You cannot netflixify journalism. It's different to movies or music. Journalism is not art. The online subscription business model doesn't work for journalism, because alternatives are far more easily accessible than print media. News are not unique works, news articles share the same base - things that happened anywhere in the world. Why should I get multiple subscriptions then?
My dad subscribed to both "The Edmonton Journal" and "The Edmonton Sun". Why? Because each had it's own bias and perspective on current events. What you're describing is not only not new, it's literally the dominant business model for print journalism for the last 100 years. Will it translate to the internet? I guess we're about to find out.
> 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!"
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.
Carrot Weather App is another good one. Pay $5 once to get a really polished weather app with some basic "cloud" functions thrown in, like notifications to a phone device, some fun "achievements," and a pretty good weather data feed. If you want the super-accurate feed or if you want more advanced notifications and mobile device access (e.g. repeatedly on your Apple Watch), pay up for the subscription because it costs the dev more. And, if you stop paying, that $5 you initially paid is still valuable because the underlying app still works.
Stop paying? When you aren't "current" you can either pay up... or downgrade to your perpetual version "owned".
$4 a year (or $10, if you don't dismiss the 'ultrapremium club' popup and buy that by mistake) plus the $5 one time is not remotely what I would consider worth paying for a weather app unless Carrot was out in the wild building weather stations.
You'll also note that Carrot's website nor App Store description even mention the existence of this buy-up (except on the support page - but why would I look at the support page for an app I was thinking about buying?) or the pricing. They also deceptively show a photo of the Apple Watch showing weather, which is technically correct (the best kind of correct) - but the Apple Watch doesn't update in the background (or give you weather notifications) unless you pay for a subscription. Because weather apps that don't update are really useful.
Also, it doesn't "cost the dev more" to send updates to a watch instead of the phone (they're going through the phone anyway,) so I don't buy your justification for paying more for it. It's just a way to market segment and try to scam more money from people who have already paid above market for a weather app. You get Weather Underground data with the 'cheap' sub... but only on the phone. If you want it on the watch, you have to get the expensive sub. This also makes no sense. There's no way in hell wxug is charging extra based on the target device.
Most subscription software is a terrible deal in comparison. I have tried to avoid subscription software as much as possible. But we have a family subscription for 1Password because $REASONS. We pay $60 per year for (in comparison to Office) a small software product, with small cloud storage, of which we only need a couple of megabytes for storing encrypted passwords.
Also, I wonder whether this will lead to a slower development of the software.
Most likely. Once you are locked into some proprietary data format, it is often more expensive to move to an alternative, and it is easier to subscribe. Once a substantial part of the user base has a subscription, there is no more need to entice users with a new version.
Subscription software does not benefit the user.
Depends on software, subscription and benefits...
I think Office and Jetbrains are softwares done "right". They continually release updates - quarterly?... continually add new features...
I think more companies get it "wrong" than get it "right"... but done right, the company has reasons to keep developing - no new stuff? no continued monies. no new monies.
Each market is different, but when I look at an area like Photoshop or Illustrator, the competition keeps getting better. In some areas they aren’t even competing.
The workflow of a game artist will have them going through a bunch of different products to get to an end result. A lot of those steps can have alternatives. If a vendor has some proprietary format that doesn’t work with anything else they never even get a user base.
If a subscription is funding continuous development, and th company is doing a good job, and I use the software daily it doesn’t bother me. If I use it twice a year, I’m going to be looking hard at alternatives.
Subscriptions from Adobe were meant to soften the initial sale, but Adobe's own rigidity with the subscription schemes on release shot them in the foot, as organizations had to wait a long time for a model to come out that met the needs of small/medium businesses who previously could have made due with a few perpetual licenses. The storage was pretty sad even at the time of the switch, so that wasn't a compelling sales point either.
I think Adobe just didn't pull the numbers they were expecting when they switched, and now they're stuck with this model and infrastructure they don't know what to do with.
>Creative revenue in the first quarter of fiscal 2018 was $1.23 billion, up from $942.2 million in the first quarter of fiscal 2017 and representing 30% year-over-year growth.
So not only are they still selling, but subscriptions increased 30% over the past year. Clearly it's working for them so much that they're finding success doing the same thing for the document cloud:
>Document Cloud revenue in the first quarter of fiscal 2018 was $231.0 million, up from $195.9 million in the first quarter of fiscal 2017 as we continue to transition Document Cloud to a subscription-based model.
This is actually my way of making decision to buy a subscription-based product. It must provide comparable service. Office 365 single user license costs around 70$/year. Now:
- Evernote is asking 60$/year. Seriously? One note is already offering same service with 1TB storage.
- Pocket is asking 45$/year. WTF? It is just a bookmarking service which is already offered by one note web clipper.
- Proton mail is asking 50$/year for 5GB mail box. Dude, Office 365 offers 50GB add-free mail box. However NSA is able to read your emails, which is not the problem here. At least MS is not selling my information to advertisers.
Other than streaming services, It is getting really difficult to find any subscription-based product that gets close to Office 365.
I am not sure if that would be bad, though. Often enough, I feel that software vendors either just change the UI so they can show non-technical people how "improved" their new version is (MS Office), or they introduce arbitrary incompatibilities, so you need the most recent version to edit files that have been created/modified with that new version (I'm looking at you, Autodesk!).
With a subscription model, at least these vendors could focus on changes that actually provide value to their customers rather than making arbitrary changes just to make people buy a new version they might not really need.
> 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/
Your license comes with a year’s worth of updates. Once that year is up, you can keep using the last version of Sketch you downloaded, forever.
That sounds ok to me.
This. If you sell an app and service together, you can charge a recurring fee. If your app is more traditional, then a one time fee for the app is appropriate. Note, this does not mean that you can just add a service willy nilly like and start charging a recurring fee. That's crap.
Alternatively, same restaurant has some really popular plates, fancy looking things. Owner sees a way to generate revenue, so he sells the plates for $5 and a recurring fee of $1 per month. That's it, nothing else. Why would I want this? What's in it for me?
Why must there be something for you? The thing in it for you is the same as before: the plates. If they're no longer worth it for you, that's fine, but that's the same if the owner had kept the same model but simply raised the prices or reduced the size of portions. I don't see why that's "crap" or "inappropriate".
The only exception I see is people who already bought a plate; I fully agree they should be allowed to keep using it as-is for free, since otherwise that's a breach of an existing agreement. But there's no such agreement between the owner and prospective buyers.
You seem to be taking issue with my word choice, but I stand by that choice. The second scenario is a crappy deal. It's "Crap" for the consumer. I don't know anyone in their right mind who would go for deal number two willingly.
There's obviously a middle ground, like being able to at least use the version you paid for indefinitely but having to pay a smaller price to upgrade. But which direction a pricing structure goes also depends a lot on the niche and type of software.
Citing the worst examples of "subscription abuse" isn't really an argument either. Of course you can find examples on each end of a spectrum. But as far as most software pricing goes, if it's so bad, then people wouldn't pay.
> But as far as most software pricing goes, if it's so bad, then people wouldn't pay.
And yet people keep paying ransomware for access to their important files.
I do feel that I get value for my money and with the yearly fee I get all the updates (which are important in the ever changing world of web development), but sometimes it still feels like protection racket.
This is actually my favourite licensing technique I have come across for software.
https://sales.jetbrains.com/hc/en-gb/articles/207240845-What...
https://sales.jetbrains.com/hc/en-gb/articles/207240845-What...
If they started charging just for use they wouldn't need neither an excuse nor a justification.
I really don't see your point.
If you could explain further why you think sublime would need an excuse for charging a monthly fee I would really appreciate.
If the problem is access to files, then they could just have a free converter tool to some standard format.
Actually they'd need both.
And companies are not so dumb as not to understand this. Any company that started charging or went into a subscription model, offered both excuses and justifications for doing so.
You might be think "it's a free country, it's their product, and they can do anything with it".
Which is true in a trivial way (they're allowed by the law to do anything they like in that area), but it's also wrong.
Wrong in that in practice they're not really free: to survive they are bound to the market and their customers responses.
So they're free only as much as they're OK with pissing their user base and potentially losing sales (or have most of them go for some other product, and kill their own user base -- e.g. Quark xPress vs Adobe Indesign, and tons of other similar examples).
Except bits don't rot?
photoshop was fine in 2012. now you can’t get a copy of it from adobe and cd keys sell for more than they originally cost. this is only because adobe wants to take more money from people until the end of time.
The way things should work is like this: Subscription for when you want to use the software and open format data files that you're always easily able to export and download.
If a company goes out of business or does something stupid then another one will pop up to handle your needs. This aligns incentives correctly while still allows a healthy dose of competition.
I use various bits of successful software like Transmit and Alfred that let you update until the next major version in which you must pay again.
The reality is that having everyone on the same version drastically simplifies not just security, but also interoperability. It isn't 1998 anymore. The default is internet connectivity and we should stop pretending our apps are secure when they are not.
That being said I do think truly securing an application requires first having a secure platform. Otherwise users could indefinitely demand mitigations at the application layer until it contains most of its own OS.
Now you do you, and I'll use Goldwave v4.0 for basic audio edits - exactly the same tool I used in 2000, one that works well and I never had to re-learn.
I despise tools that capriciously change in my hands. Extra "security" is not worth the productivity hit.
Again, Internet connectivity isn't my default. Dropbox can handle that, and that software gets all the updates. The tools I use to make stuff I put in Dropbox better all be offline and never changing unless I say so.
That applies to the office suite, DAW, graphics editor, etc. I haven't seen anything their online features could give except a cloud lock-in.
You may value extra security, often necessitated by the very virtue of the software being online. And I value the ability to use without having to think about whether the signal is strong and my card payments went through.
The reality is that the interests of the users are often not aligned with the interests of software vendors.
The "middle ground" has been the most common model for desktop app pricing for decades. You buy version X of a product. When the next major version is released you pay an upgrade price.
In fact, the "middle ground" has been the norm for the majority of software apps over the history of desktop computing. It's the SaaS subscription model for cloud-hosted software that is the new deviation. But that cloud-based subscription model is now leaking into desktop apps (like the Adobe suite).
Mobile app stores killed that model, when they made continuous, perpetual updates the norm. At the time, everybody was too busy pointing out the implications of going from 50$ to 50ct when the even bigger change was a farewell to major version upgrade sales.
But there, after a few cycles of companies ruining themselves by hiring in the short-lived money surge of growing an app to saturation, parts of the industry seem to have found their way to quite reasonably priced subscriptions.
Continuous, perpetual updates are definitely NOT the norm in mobile apps.
Some get some bug-fixes and the occasional new feature, but any major update lands a version 2.0.
Far more (the "long tail") are just abandoned (like all those thousands of 32-bit apps being deprecated in the iOS store).
2015 - you sold v1 for $5.00
2017 - you start selling v2.
You sell v1 for $5.00 but in the description tell everyone not to buy it.
You sell v2 for $5.00 but direct people who have already bought v1 to buy the bundle of v1 and v2 that you price at $8. Anyone who has already bought v1 can buy the bundle for $3.
Not very satisfactory, but very prevalent.
And, I'd say, given the low price of apps, it might be just right to not offer any special discount for an upgrade. You could always reward older users some other way.
Also, Adobe's tools have always been among the most pirated software out there. People who needed to do occasional work wanted Photoshop but there was just no way they were going to drop $700 on it. Nowadays, Adobe just charges them an $11/mo fee. That makes it much easier and I know several instances where this newer model has resulted in real income for Adobe, from what would've otherwise been pirate installs.
People are much more willing to pay a small fee several times than a massive fee once. The subscription makes them feel like they have more control and they can cancel when they don't need the product anymore (not always true because some of Adobe's subscriptions have annual lock-ins). It reduces the friction from "figure out how to pay us more than your car payment" to "just send us the cost of a trip to Starbucks, it will only take a couple of minutes and you'll be merrily on your way".
This dramatically changes the incentives re: piracy. Instead of spending hours trying to find a cracked build from a site that won't pwn your PC so that you can save hundreds of dollars, you just pay a few bucks and speed through with a known-good version (plus a clean conscience).
It's almost a side benefit that subscriptions frequently represent additional lifetime value v. a "pay once" model.
A user can buy the base version, then a few months later when you create a release that allows processing widgets through the program twice as fast, they can update for a small fee. This would force the developer to create updates that would be easy to communicate the benefits of to the consumer.
It'd be a bit more difficult to figure out pricing for new users over time and which version they receive, but it would allow they old pricing model without forgoing the benefits of incremental development over time.
That could quickly devolve into supporting a large number of distinct versions of the software, which would be difficult and costly. Nobody wants to do that.
Not to mention that, if this versioned software is a platform (for example, WinXP and its service packs you mention), downstream vendors would also need to QA and support their software on all actively supported versions of said platform.
I explained why I find the description fitting. You could at least entertain us with why "future users pay for your upgrades" does not fit in the context of one-time-paid "perpetual license" software beyond disagreeing with the phrase I chose to name the predicament.
However, that is not the case. Everyone stops using your app at some point. So you don't need to support users forever, you just need to support them for some finite amount of time. Some users might use your app for a few years, some use your app just for a few weeks. Some users will email you half a dozen times, but most will never email you. Your app price should be priced so you can afford to support the average user.
And another thing that people forget: When your user base is growing, the amount of word of mouth recommendation you get also grows, and you automatically start selling more licenses, so your revenue also grows.
Pay-once and subscription aren't really that different in practice. Pay-once even has an advantage: You get all the money up front. And that's awesome if you are planning to grow your company.
The extent at which some users subsidize the app for others is just one of the decisions you need to make when deciding on a pricing structure, not a rebuttal.
There's also a flaw in this logic: It assumes that all apps require some kind of server provided by the developer in order to run.
Once upon a time, standalone software was standalone and could run in perpetuity without requiring anything more of the original developer. It's still entirely possible to write software like this, there's just a trend away from it due to the prevalence of always-on internet connections and the ease of keeping some of your application server-side as a form of copy protection.
“Thanks for contacting us! Our standard license includes support for 12 months after purchase. I’ve attached an offer for our extended support contract. I’m looking forward to your response!”
A good example is the Adobe Creative Suite 6 Master Collection which was so expensive to buy in Australia that it was cheaper to fly to the US, buy a copy and fly back. Now, you can get a years subscription to Creative Cloud for 'All Apps' for about 1/5th of the price of what CS6 MC was in Australia. It is still expensive, and after 4 or 5 years you will have spent more but thats significantly longer than Office 365 which costs about 2/3rd the price per year of a copy of Office 2016 outright.
This logic applies to literally any one-time purchase that includes a warranty, yet the consumer goods sector has managed it somehow. What's really happening is a deterioration of the idea of "owning[1]" software. I'm sure it's great for the publisher, but it's almost all downside for the user. I'm still using an email app that was acquired and shut down by Google in 2012 and it continues to work just fine. On PC I use WinRAR from 10 years ago with no issue. I can't imagine having to pay for all of these little apps on a subscription basis and then having to find alternatives when the creators get acquired/go bankrupt because the subscription is no longer supported.
Edit: To add to that, if the cost of the subscription is to provide me with superior support, will publishers selling me these subscriptions be removing the warranty disclaimer from their EULA? Probably not, right?
[1] Yes, you never "owned" it, but licensed a copy - but in practice it was similar to owning a physical good.
In the US, companies have product liability to correct defects for the lifetime of the product, subject to routine limitations. [1]
So companies create business models to compensate for this limitation.
Companies figured this out with software decades ago, so it’s certainly possible (eg, Microsoft).
[1] https://injury.findlaw.com/product-liability/what-is-product...
Many many companies still allow this, but I think if you want support you should be paying a support fee (e.g. monthly subscription).
Of course, in the long term, customers will revolt, and do so swiftly, and without mercy.
Instead of the several thousand dollars you would have had to pay for the various softwares in the lineup up front, you just pay $50 a month. Which is reasonable of you previously used more than just Photoshop and maybe upgraded every 3 to 4 years.
If the end result is a similar cost, I would much rather keep my capital in the business and make a monthly payment.
I do some vector design work maybe once a month. I'd love to buy a license for Illustrator, if it cost whatever it used to cost before Creative Cloud. I would use it for a long time.
But 50€ per month is too much. So I bought a license for Affinity Designer instead. It covers most of my needs, and it's no subscription. I also bought a license for Sketch, since the subscription is optional.
I'd love to use the same tools as professional designers, but they've become too expensive.
Here’s the reality. I used to pirate Adobe software because there was no way I was going to pay 1500k or whatever Photoshop was. Adobe got $0 from me.
Now I subscribe to get access to Photoshop. Adobe now gets £100 from me a year. I’m not the only person I know who went through this.
Of course, cheaper alternatives always existed. Adobe’s adoptance of subscription pricing hasn’t changed that.
Software used to be an investment. At university, our physics department had a lot of old computers standing around, whose only purpose was to run some specific legacy software that was no longer maintained, but still worked perfectly.
During my time there, I convinced the theoretical physics department to buy a few Illustrator licenses so we could make better diagrams. I think the academic license cost 300€ per seat. They probably never updated, but I'd assume they still have a PC somewhere with one of those licenses installed, and if someone has a PDF from Inkscape with an incorrect Color Profile, they could still use that machine to fix it.
I think you underestimate how many people use old software out there. Sure, we tech folks update every year, but people who work outside of the tech bubble don't always upgrade a system that's working perfectly fine.
If you need more than just photoshop, the deal is even better.
https://www.adobe.com/creativecloud/plans.html
Many of Adobe’s core products have languished at the same time as many of the features that set them apart in the past are become less differentiating. The photo editing/vector drawing space is becoming more commoditized.
I haven't seen anything at all that comes close on a cheaper model.
And those are just panoramas
If you have no idea how much income you are going to make, stuff become a hell of a lot more complicated, unless you have a substantial cash reserve available - not a luxury that everyone has. The directors spend a hell of a lot more time running around banks begging for short term financing, cutting costs and planning out 100 different potential scenarios.
If I had to run another business, I would definitely look to running some kind of subscription scheme..
And if you get a reputation as a hostage holder, you will likely spawn competition that avoids your negatives.
I’m sure you will get some residual low hanging fruit in the form of people that buy subscriptions and don’t care enough to cancel.
Doesn’t seem like a winning business model though.
But, generally this will be to a much more predictable level that if you are relying on upfront sales. Unless you really mess up your product, if someone subscribed last month, you can generally predict that there is a, say, 95% chance that they will still be subscribed next month.
If it is a one off payment, then you know you aren't getting any income from them and you just have to hope your sale people are going to do their job next month.
It has nothing to do with lock in. That's a bit of a red herring. You can have just the same (or more) chance of a repeat subscriber by creating a really good product as you will with some kind of hostage strategy. As you say, not a winning business model.
My experience here comes from more business to business where a months worth of expenses would be covered with 1-2 sales. I had times when the sales people would just disappear on extended unannounced holidays or decide to move to a different job without informing anyone. With our business strategy relying so heavily on upfront sales to maintain the cash flow, it was not a fun position to be in!
Things may well be different with consumer products where sales volumes are in the thousands of units.
You realise that your post sounds like the stereotype of every bad manager ever? "How much harder could it be to build the new feature if we did X, Y, Z? Surely you can get it done in just three days?"
"Information provided under Articles 13 and 14 and any communication and any actions taken under Articles 15 to 22 and 34 shall be provided free of charge".
(Article 15 is the Right of access by the data subject.)
You can only charge for subsequent copies or when "requests from a data subject are manifestly unfounded or excessive".
--
See also the ICO FAQ on the subject: https://ico.org.uk/for-organisations/guide-to-the-general-da...
the data will be useless other than as a source of information. If you have data for an online vector editor, the vector data can be legally taken out via a common format (such as json), but there'll be no importers for this shape of data.
Any business can easily construe a common machine readable format that's also completely custom, and unimportable anywhere else, to satisfy the letter of the law.
If they frequently change this format to break those implementations or clearly make it much more complex than it needs to be, that can also have legal repercussions.
This is not how prices are set. They are set on the willingness and ability to pay. Water costs nothing to produce but if I have it all you will pay me everything you have.
For example if their main competitor went bust and not a single atom changed inside this company, they could charge you more.
Do they have a monopoly or is it hard to migrate? These are the conversations the people who set the price are having. They are not talking about people being upset if they still pay.
"that price is vastly out of proportion from the cost of providing the software"
That's just an unfounded assumption by the author. He says he knows this, even though he doesn't know how many developers are working on it, what they get paid, how much time each release takes, how large the code base is, or how many users the product has. Essentially, he has made up a cost in his head, and decided that the costs must be less than his fantasy. For all we know, he's one of 2 users, and the cost for keeping his editor available is $100k/yr/user.
This also completely ignores the fact that prices for software aren't generally set using cost plus pricing.
Ay, there's the rub. The problem is also related to price anchoring [1]: People [2] accepted the price of $70 for the perpetual value provided by the app (including cloud syncing), but balked at $40/year. The latter price makes the app more expensive over 2 years, and the developer promising updates doesn't have quite the impact to justify the change in the eyes of the angry customers.
If the app initially cost, say, $160, maybe the newer pricing would've been better accepted. I hear Adobe and Microsoft are doing quite well with the subscription models...
[1] https://en.wikipedia.org/wiki/Anchoring
[2] The people who bought it. This is important, because it ignores all the people who thought this wasn't good value. Maybe some of the initial non-purchasers became subscribers. Market analysis is hard.
if you need 'em for your career, then make the person providing your career pay for it.
if you're self-employed, then use an open alternative.
The production cost is one of the metrics customers use to decide if a price is fair or not, to them. There are other metrics, like the time that can be saved by using the product (ie. some way to quantify the product "use value"), but the production cost is often quite useful to detect abuses--and boy, aren't there a lot of attempts of such abuses.
only approximately, and only if the consumer really knows the cost.
Think jewlery (like diamonds), or expensive brand name goods like designer clothing. The production cost for those goods is "low", but the charge is in marketing and status symbol representation (which is modified via marketing).
So this looks like a case in point, where having a rough ideas of the production cost (some parts hand-made, made in France/Italy/England, expansive material like quality cashmere etc.) is important.
But the point is he's a consumer and he isn't pricing by value - he's pricing by costs.
That is in itself a great argument for the subscription model. Consumes receive value from continued use over time, so why not fit revenue to the same shape?
They did do this. From the footnote to to their original announcement[1]
Recent purchases of the Mac app will unlock up to 12 months of free use, and purchases of the iOS app will unlock up to 6 months of free use. Your individual free-use duration is calculated from your actual purchase date, respectively, and if you bought Ulysses on both platforms, we will add together both periods.
[1] https://ulyssesapp.com/blog/2017/08/ulysses-switches-to-subs...
Even Apple somewhat relies on this, except it's been in 2 year intervals. It's the point of so called "planned obsolescence."
So if you're an indie developer, you only have a few options.
1.Go through the rat trap of doing ads and trying to grow a huge userbase with marketing etc..., which everyone hates but most tolerate because it's free.
2. Charge a 1 time fee and hope that you price it right to support long term development and sustainment, knowing that you'll probably limit your market significantly.
3. Charge a recurring low(er) fee and draw a balance between losing a lot of very price sensitive people and having to run a marketing campaign and ad system.
No good option there but subscription seems to have the most benefits. By the way, everything needs upkeep.
Frankly, the writing has been on the wall for something like at least 10 years and surely came into life once Adobe announced the CS 5.5 subscription model in 2011.
I thought this was absolutely ridiculous since the custom markdown would have simply gotten written as plain text. I asked why they're limiting the user like that and got even more ridiculous response: apparently they didn't want other people to get confused in case I ever shared the files that were outside their own file based schema. This non sequitur infuriated me enough to ditch the software.
None of it made any sense until they announced the subscription model.
That means I always will have access to my projects and to the level of functionality I start with. But I keep getting upgrades as long as I keep paying, and they get the steady revenue stream that means they don't have to play weird marketing games.
E.g. I start paying month-to-month at 2016.2, after 12 months I have a license to 2016.2. But say after the first month, 2017.1 comes out. Then after 13 months I now have a license for 2017.1.
I'm pretty sure that if the fallback license was to the most recent version you're entitled to during your subscription way more people would take leaps between the end of a subscription and the start of the next one (though Jetbrains offers you a further discount if you don't do so).
In the end, though, when I discovered this was how it worked at the end of my PyCharm subscription, it left me quite a bitter taste in my mouth, and I just stopped purchasing any JetBrains products. These kind of details are akin to trying to trick people via putting stuff into EULAs nobody reads, and for me at least, it gives the distinct feeling that they're trying very hard to screw me over, so I try to not frequent nor support those kinds of businesses, IMHO.
I've been using them for awhile and I felt they were really up front about what they were doing, but I don't know if they've always been as transparent.
Initially JetBrains didn't even want to offer rollback licenses when they went to subscription only model a few years ago.
There was a big uproar among programmer communities (including here on HN) and after few weeks of deliberation a compromise of sorts was reached.
Despite offering a nice product line, JetBrains did lose a bunch of goodwill including mine. But goodwill does not pay the bills.
> The trick is that at the end of your yearly subscription you have already upgraded to a newer version, so falling back to the perpetual license means downgrading, which is both often a practical problem and (perhaps most importantly) something that I think many have an emotional aversion to.
Qualifies as
> a particularly hamfisted attempt to grab an almost negligible amount of money
OK, so maybe it's not as negligible an amount but it feels petty and I'd not pay money to a company that pulls stunts like that on its customers.
They're playing on loss aversion and the endowment effect. It feels worse to lose something than to never have it, so people are more willing to pay to keep it than they would be to pay to buy it if they were never given it in the first place.
https://en.wikipedia.org/wiki/Loss_aversion
You are absolutely right! That's exactly how it should work but it's surprising that they don't do it that way. I can give you an explanation from accounting perspective: When the sale happens, the accountant would record the sale in their Books of Account as "Unearned/Prepaid Revenue" (as a liability). It makes sense as you have taken money "in advance" for a sale but haven't delivered the updates yet and hence you cannot claim it as Income. Every time you put out an update, you can claim a portion of the "Unearned/Prepaid Revenue" as "Revenue" and push it from liability to "Retained earnings" account as Income. When the year expires (note that the year is for the user not the financial year) the accountant would claim the remaining Unearned/Prepaid Revenue as Revenue/Income.
I wonder how they manage their Books of Accounts if they have defined that the license falls back to the earlier version. What they are doing doesn't make sense from an accounting perspective as well!
I'm not a certified accountant either but I took the course just to understand workings of my business.
> they can change to allowing the user to keep the latest version they upgraded to without serious consequence
It'll be in their best interests if they did.
> you can just as easily sell "product version X with one year of updates" which is very common as well, and mark that as revenue right away
You definitely can. But you end up overstating your revenue and in turn your profits. The downside to that is you end up paying high taxes (unless you can minimize your profit by showing a ton of expenses as well). If it was instead treated as Unearned Revenue (which is a liability), you would be stating your true income and showing lower profits and thereby paying lower taxes.
Take for instance the case where your customer purchases a multi-year subscription. This causes a higher cash flow (assets go up) but you won't be overstating your income (as liability goes up by classifying it as Unearned Revenue instead of owner's equity). The liability can be reduced by claiming it as revenue over a multi-year period. If it was marked as revenue at the time of sale, the owner's equity (retained earnings) would go up. That would mean showing higher income which results in higher profits and you end up paying high taxes.
Remember that with unearned revenue you can carry it over to multiple financial years and spread your income between them. You lose out on this important tax saving component if you mark as revenue right away. This also has the advantage of portraying a true picture of your business in your books of accounts.
Long to short, the "rebate" was paid ~60 days prior to the end of the 12 months. The remaining 60 days' purchased will only be rebated if they renew.
I presume this is in the small print somewhere. None the less, it's complete crap.
I received my rebate after I had let my membership lapse without any issue. You can use the rebate even without an active membership. You can even walk up to the customer service counter and get your rebate amount in cash if you want. I ended up getting pizza and took the rest as cash back.
"The Reward is issued approximately 3 months prior to the member’s renewal date in a Renewal Statement and reflects rewards earned up until the issue date. A member must be an active, paid Executive Member when the Reward is earned and issued to receive the Reward. To receive a refund for the Executive upgrade fee the membership must be canceled or downgraded to a Gold Star or Business Membership and any 2% Reward issued or accrued will be forfeited. Any additional savings and services exclusively for Executive Members will be rescinded." https://www.costco.com/executive-rewards.html
Also, how would you account for it? You can't retrospectively change the nature of purchase from subscription to a one-off sale! That would be audit hell for their accountant.
But that is denial of service that I legitimately paid for. Either they should provide the updates till end of subscription or refund the collected update fees pro-rata (viz. if I cancel after 9 months of purchase, 3 months of excess update fee collected should be refunded).
With that you get a trial of all updates for a year. If you don’t like the trial you don’t pay and revert to the version you paid for.
Your way also makes sense, but they both seem reasonable to me. And I don't really care much, in that I renew when I'm regularly using their product, as I want to support them. If I just had to open an old project for something, then I don't mind exactly which old version I'm using. (And if I somehow did, I could just put it in 30-day trial mode.)
Some lag from the latest version seems fair, e.g. 6 months before the latest major version is perpetual...
Don't upgrade until after renewing the subscription for next year.
I wasn’t aware that the perpetual fallback license only covered the latest version at the time of subscription/renewal. That’s less than ideal, but apart from that, I think they’ve pretty well nailed the subscription-based model. It’s actually the _only_ software I’ve used where I feel the subscription model terms were actually an improvement over what I had before.
I graduated from college and to see their lowest cost package was ~300 USD IIRC was infuriating.
I went full Netbeans for PHP. It does the job, the debugger works, and it doesnt cost me a yearly fee.
Android Studio is free.
Individual licenses can be used for commercial purposes just like a business license. AFAICT, the only difference is that a business license can be used by any single developer within an organization at a time, while the individual license can only be used by the named licensee.
There's also a 25% discount for new/recent graduates, which eases the sticker shock a little bit for new graduates.
Unfortunately, Office 2010 already has issues opening files made with 2013, 2016, etc. Most of my PCs are on 2013 as I was able to grab several HUP licenses at the time. I seriously doubt 2013 will be 100% compatible in another year or two, and 2016 will be the minimum version one needs in a work environment where you're collaborating on docs made with newer versions.
I have no doubt that Microsoft has employees on the payroll who have no other function than creating annoying incompatibilities to encourage users onto the 365 treadmill.
Again, the cynical part of me assumes that MS employs full-time staff to ensure that Libre Office, Google Docs, and other apps that work with MS Office will never be even 95% compatible.
And from my experience, even simple spreadsheets and formatted Word docs don't display properly when opened in Google Docs or Libre Office, and large, complex business docs with macros and esoteric formatting don't have a chance.
There are a few developers in every place I've worked who use Libre Office because they're on Linux or refuse to pay for Office. And you can tell when they collaborate on a doc with MS Office users because it renders poorly when they send it back. It doesn't bother me, but I've seen how folks in management, marketing, etc. consider it unprofessional and assume the developer is just lazy or can't use Office well.
The one silver lining is that Linux users can use Office 365 online for less complex docs; it's not a full replacement for offline versions, but it's a better alternative than Libre for those of us who believe it better to be compatible with others even at the cost of a 365 subscription.
Why can't all subscriptions work like those old license schemes do?
And what can be done about that ?
only if there's no competition, or there are substantial barriers to entry (such as regulation).
Even if some other software has the same or even slightly better abilities at a lower cost, the overall cost of switching is much greater. Especially if someone else is paying for the tools.
Until some software appear that make user's competition more efficient and they are forced to learn new ways to not get out competed.
Then the cycle starts all over again.
In the knowledge-based industry such as software the cost of labor has the biggest share in cost structure. And unlike materials, the labor itself is a subscription. Social policies that make firing hard make it even more so. No wonder that revenue structure also tends to shift towards subscription-based models.
If you sell a one time license to somebody there is no incentive for the seller to keep making the product better, to care keep caring for you.
With a subscription model - especially a non-annually-paid one, they have to keep working to keep you.
It's also a way more sustainable business model and probably the only thing which can replace ads in practice. If a service like facebook gets a load of money out of you per year, there's no way they would switch to a one-time fee instead. If it were to be replaced by a subscription though, then you're still a constant money flow for them, which would work much better.
For Facebook - I don't think forced subscription would work. People would be forced to think about how much they value the service (a less ubiquitous one at that).
Do you have any example of file managers or PDF readers with a subscription-based model?
Ultimately - because the person who owns the rights for the software wants to keep charging them and since it's their software they decide what is charged for it, end of story.
If it's not a good deal for you, go somewhere else. There's no point arguing about prices beyond that. There's no 'should' in prices - only what people want to charge and what people want to pay.
http://dopus.com/ not exactly subscription, but you buy a major version, and each new major version is a new purchase.
1. Operating system 2. Programming IDE 3. Password Manager 4. Well I pay subscription for Netflix and Spotify but that's not really for the updates. Partly for new content, partly operating costs. 5. Facebook (I'd prefer to cover the operating costs by subscription, I really dislike ads) 6. Email - same as above
Also, actually I'd like all the services I use to provide feature updates now and then and continue trying to innovate.
Edit: also, if you do feature updates every now and then. Like it was with Windows or Photoshop. Then you end up having to support a lot of parallel versions with security and bug fixes which is wasted work really.
But - if those preferring a perpetual license were to be a strong minority, there would be no business incentive to make products in such a way.
This one is a total non-starter for subscription pricing. I'm not willing to use software that will potentially cut access to all my accounts if I stop paying them monthly.
In reality, those companies who don't do scummy things like attempt to lock your data or similar, will be out competed by those who do.
I strongly disagree on this one. If they want to sell you version 2.0 (upgrade), they better make sure those new features are worth their money.
With a subscription model, you either keep paying them or you lose it all. Why would they improve their product when you're already paying them x/month?
Some time ago I bought Affinity Designer because I don't want to pay Adobe for a subscription. And going back to that website, one of the first things they promote is "No subscription. Only €54.99".
Seems obvious that any big player that is switching to subscription only, is leaving a gap for smaller companies that support people like us.
(from https://justinjackson.ca/saas/)
Now imaging a world 15 years from now where Adobe totally goes under due to competitors making much better programs. Their servers go away and now, and you can't even start your licensed software without running it through a debugger and trying to crack the license check.
I’m always annoyed about whiny iOS developers complaint about how they cannot make money without obnoxious schemes like this or gambling mechanisms. Software ISVs in olden times had a tiny market, huge expenses around retail channels and distributors, etc. They made money.
If I am paying for software that I use to be more efficient and increases my profits, I am OK with a subscription model, or whatever model is offered. This is, as long as the cost of the software is considerably lower than the value bump I get from using it.
With discretionary spending, it takes a lot for me to buy a subscription. If I spend more than X% of a given month consuming what that subscription provides, I will consider buying it. Otherwise, I am fine not consuming that particular service at all.
I subscribe to a few magazines and Spotify. I read content online from many sources, but will not buy a subscription to each one of them. None of them are valuable enough for me to subscribe.
If there was a way to pay, say $20 per month, and have a set of credits that I could redeem at Washington Post, The Economist, New York Times, Bloomberg, etc, on a per-article basis (I make the decision after the first paragraph or two) I would jump at that right away. The system would need to be very user friendly and almost friction-free.
i think this model doesn't work (but i'm willing to be pleasantly surprised). Imagine you read 10 articles a day, 30 days a month. That's 300 articles - that's about 6.6 cents an article, spread across many different organizations.
Those articles will need a readership in the 10,000's per article for any sort of return on investment with those sort of prices. Granted, a high quality article is going to be able to reach that, but there's limited time per person to read, and that 10 articles per day read is on the high end - most people read much less than that.
blendle.com offers basically exactly what you're asking for. (Not in any way affiliated with the site, just an occasional user)
* There is no incentive for feature creep caused by having to "sell" the next version to your current userbase every so often.
* The developer does not have to keep supporting old versions forever.
As a software (SaaS) developer, I find this comment outright bizarre. I find it is hard to make a living with $50/month subscriptions, if you write niche software (and believe me, you DO write niche software, you are not Dropbox), much less support an entire company.
Have you actually done the numbers before writing that "price is vastly out of proportion"? Just take the total cost (roughly 2x salary) of several people, divide by that $40/year and see how many subscriptions you come up with. I'm getting ~25000 subscriptions for 5 employees, just to break even, and we haven't even touched the marketing required to get 25000 subscriptions.
Furthermore, only devs complain about the "proportion of providing the software". Didn't especially Indie devs here on HN take their time to learn the lessons of value-based pricing?
I do charge monthly for my app. It's 30 bucks a year for a B2C app. Expensive some might say, fair for others. But I can at least confidently tell that most users use my app every single day. And people who won't use it for more than a few months came away way cheaper than if the one-time-fee was 30-40 bucks to start with.
Oh and providing an app as a one-time-fee for $5 or some ridiculous undervalued price that is considered "acceptable" simply doesn't work in niches.
People tend to think that the costs of a software business are just the time of the single developer that writes the software. And they also calculate the cost of that time as what developers actually get as their salary. But this is not how you run a business, not by a long shot.
This gap in understanding has been widening recently, because of the completely unsustainable app store pricing.
Users are balking at the price because it's garbage to expect them to support some gigantic business for a simple thing. This is very common (1Password has over 75 employees!!!) and the sense of entitlement developers have to try to force their users to support a grandiose business, no matter how bloated and unnecessary the people are, isn't sustainable.
You are underestimating the complexity of writing, maintaining, documenting, supporting and marketing apps of this size. I think my guess of ~5 people is about right, they might be able to do it with a smaller team, but probably not less than 3. I'd say 2 developers and one person to do marketing/support is a minimum.
You will generally make far more money charging $5/mo forever than you will charging $50 once for identical software. Not to mention the steady cash flow.
An extreme example, but I always pirated Photoshop (as did probably half the people who ever used Photoshop). But now I pay $60/mo for it and a bunch of the other Creative Suite apps. I never would have paid whatever the 4-figure price was even when I was getting paid to make graphics at work. But I'll gladly pay $60/mo to have access to everything now even though I don't get paid for any graphics or video work.
The net effect is that large swaths of society and indeed the world get the internet services for free, subsidized by purchases made by richer westerners, purchases and services they themselves could never afford. This model works well with the economic structure of web publishing, where marginal cost of serving an existing page to a new customer is essentially zero - even for the obese, media rich pages the author is referring to.
Once you move to a flat fee, this massive redistribution ceases. There is a clearly defined model of customer, say, those living in the middle class of an OECD country, that is targeted to maximize revenue, and a paywall is put in place that excludes 95% of the rest of the world. These are people for which 9$ 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.
And, of course, that must be the very individual who wants those "immersive experiences, well-designed pages with fonts, graphics, photos, and videos coming together into a compelling format."
> Once you move to a flat fee, this massive redistribution ceases
I think this largely disregards the effects of targeting. A lot of the things (payday loans as the prime example) advertised to people less well off are reverse redistribution, exploiting the financial situation / needs of viewers.
This is a false dilemma. There are many options before succumbing to a payday loan. Depending on where you live, there are a myriad of housing assistance, energy assistance, medical bills assistance, and food assistance programs on the city, county, state, and federal levels. Heck, even bankruptcy can be better in some situations. It really does depend on the situation.
The other problem here is availability of information. Everyone is 100% aware of payday loans and the temporary relief it can provide you (advertising), not everyone is aware of the upwards of 20+ programs someone in need can participate in, and it can be exhausting to apply and follow up on everything. Again, the reason the payday loan industry is so successful is they are preying on human nature to take the quick and easy way, but to say they are some sort of last option is not true at all.
No one is saying that the fee should be flat. There are ways of selling roughly the same service for different prices - just look at air travel.
I'm not going to pretend that this is the end all solution. But both the open web and journalism cannot survive in the present state. We have to adapt.
Seems like there is a market for deeper analysis done stratchery, the information and couple of others, but it barely sustains a few writers, hardly able to compete with the large scale newsrooms of WSJ, WaPo, NYT, ...
The issue with your observations is that Gigaom isn't known widely outside of big tech. So I don't feel it's fair to compare their failure to the possibility of a mainstream outlet attempting this.
My thinking is, that if they couldn't get it to work in a specific category, then it would be even harder to make it work in more general one.
In general, a very few people care about any topic enough to purchase deeper analysis of it. I'm not sure that this would work as a business model in general.
That time is now almost over - we have established monopolies.
Established monopolies use their power - that's why they fought so hard to become monopolies in the first place.
This article is saying 'gee, I liked it when Uber kept giving me really cheap rides, but now it doesn't anymore, such hell!'
The only reason you were getting cheaper rides was because it was a mafia deal, I help you now, for free, but when the time comes, you do something for me. That's how it works folks...
Think magazines like Vogue, with 800 pages of ads that people are looking at for the season's trends. Or other shopping magazines. Also, local newspapers provide useful local business advertising.
A good media property knows that ads are as useful as other content.
People in Europe will soon get this wakeup call. Services that were only marginally profitable are already shutting down because of GDPR.
I'm confident that the EU government and its citizens have little idea of the consequences that will result from their privacy legislation.
>Maybe if the service is only marginally profitable without acting unethically it should shut down.
Also I love this neo puritan thinking. I'm sure all the users of these services agree with your ideology and you forcing it down their throats is for their own good correct?
And yes, it is for their own good to not have thousands of databases with their data littered across the internet.
I know, this is not a very American way of thinking, but no one can be an expert at everything. Most people are not experts at computers and even less can grasp the outreach and effects of their data being everywhere.
These people need help just as much as the average guy needs assistance with doctors. If they knew enough to tell when a doctor is bullshitting them, they could probably become a doctor, too.
"With their data". Aka whether or not they liked a group pertaining to motorcycles or whether they searched for fishing rods on google. Yeah, we definitely need to shut off what is the most consumer friendly way of monetizing services in history so that a database of inane shit that is only relevant to marketers isn't tracked.
And even with those two examples, you just have to be creative to find ways for them to damage you:
You'll probably have to pay more for your health insurance, if they find out that you enjoy motorcycles.
And if your next potential employer is vegetarian, they might pass on you for fishing, a.k.a. killing things as a hobby.
Someone wanting to rob/extort/kidnap/murder you, might look for you at lonely lakes in the region.
And these are the most generic examples of this supposedly useless information being used against a person.
Someone who happens to have an actual use, is going to be even more creative, since they'll find themselves in some particular situation where it's useful.
And again, there's going to be more information. They can sift through an entire list to find the ones that are useful and they can combine multiple pieces of information, too.
It is a model I prefer simply because it is more inline with the content I'm viewing. I'm more willing to let those ads get whitelisted because they're more likely to be related to the content I'm looking at and less about "what do we think saratogacx really wants today based on all of the data across the web."
I can definitively say you're wrong because I saw a billboard on my way to work today.
Also, in the early internet days tracking was referred to as spyware and security software would uninstall it from your machine.
Edit: or have “legitimate interest” - in either case it’s a very low bar for ethical standards so GDPR shouldn’t be an issue
Since you clearly haven't put much thought into this comment let's just start listing things that are funded by ads
- News
- content creators on youtube
- music
- twitch
- search
- blogs
- websites with tutorials
- a thousand different things which I have missed
and then facebook, snapchat, instagram, and twitter which of course you are too good for
Anyway, I personally never use facebook because it is not something I find interesting. Do I feel pride in that fact? No I don't because I have an equally harmful relationship with reddit and hackernews. I always have to laugh when I see people state as a point of pride how they have deleted their facebook accounts on different social networks. If anything I think reddit and hackernews could be worse because I'm ingesting unfiltered opinions from random strangers.
Best TV and radio channels across the globe are government channels, funded by tax.
- content creators on youtube & twitch
99,99% dispensable trash.
- music
Music funded by ads???
- search
The only point that holds in your list. Could perfectly be funded by ISPs as part of our Internet subscription.
- blogs & websites with tutorials
No need for funding. Cost to setup is zero (provided by ISP) or close to zero (basic hosting or domain name registering).
>99,99% dispensable trash.
Yes, the thousands of tutorials/guides and content that people enjoy watching is trash. Everything that I don't find agreeable is trash.
>No need for funding. Cost to setup is zero (provided by ISP) or close to zero (basic hosting or domain name registering).
Yes, no need to give people money for work they do.
Do you have any respect for the work that goes into the content you read and or watch every day? Or do you think people should just be content volunteering their effort for no reward?
>The only point that holds in your list. Could perfectly be funded by ISPs as part of our Internet subscription.
Yes. Perfectly. Let's just tack on another $50 a month. Or are you actually suggesting that ISPs should just do it out of their good will?
I hate ads for video content. I pay for Netflix and ad free Hulu. I use Plex for ad free content from CBS and the CW via by subscribing to the channels. It’s more ad blocking then piracy. Plex scrapes the content from the networks’ website real time and transcodes it and streams it.
I pay for Apple Music and before that iTunes.
I would pay for a high quality news source, I use to pay for WSJ.
Good for you that you can afford that. We all know the dream of the internet was information gated behind pay walls only accessible by the well off.
Sorry, did I say something to offend you?
I only watch ad-free videos from content creators I fund on Patreon. I'm sick of Youtube's shitty advertising - it's as bad as TV when I was young, right down to running terrible political attack ads when I'm trying to take my mind off politics.
> - music
I don't think this is funded by ads. It's funded by VC dollars, since just about every streaming site is losing money right now. More to the point, my musical tastes are pretty eclectic so I usually have to buy Vinyl/CDs to get the music I want.
I've cut it down to one physical newspaper subscription, use the BBC or DW or other public news sources only once or twice a day, and that's pretty much it.
The most notable thing is that I don't feel like I'm missing out on anything, I was just reading the same stuff obsessively before anyway. It's a little hard these days to escape the event driven newscycle but it's not a bad idea.
I can't imagine how such a system would be implemented though. And I'm sure there would be new unintended consequences with such an incentive structure. But something like that would be nice!
[1] https://basicattentiontoken.org/
[2] https://brave.com/
The part of their proposal I would suggest fixating on is the fact that if you make deposits into your Brave wallet, you get to block ads (right now, ads are blocked regardless), and publishers will be able to turn off their anti-ad-blocking measures if they see you're using Brave, since you'll be providing them with revenue. The hope is that in the future, paywall sites like WSJ may allow you to bypass their paywall if they can verify that you're using Brave.
There is a lot of uncertainty right now about how the whole ad system will work, because the team is focusing on making the browser robust enough so it can compete with FF and Chrome. But in the meantime, they're also getting useful information about what real users and publishers are actually keen on.
I suspect that the more obvious flaws, like the ones you pointed out, will be accounted for once the system is fleshed out. They have not shied away from moving away from their original proposal to more practical approaches.
Regarding the earned BAT by watching ads, I believe that it cannot actually be withdrawn, only used to pay publishers, but again, things may change. And I agree that the blockchain may superflous here, but using it has allowed them to get the funding to get things off the ground and attract users, which counts as a valid use in my book.
And unfortunately, it has the huge problem that a lot of technologies that could track what you do could be misused. An anonymizing scheme similar to Apple Pay might work.
Actually is this even true? Take a newspaper like the Washington Post. Now I've seen All the President's Men, where two reporters spend days and weeks, driving and flying around the country, for just a few articles. I know Watergate was an usual amount of investigation, but I still would think the research and writing is the most expensive part of an article.
I smirked because I have JavaScript turned off. In fact I run my own little script that strips out all the CSS and starts over.Of course a member of Hacker News is unusual, but I know my family members are the same way, always complaining about how complicated websites are. Maybe we're all just old fuddy duddies. But if it's the young who want all this fanciness, those are the same people who aren't going to pay more than 99 cents for a newspaper subscription.
I still think pretty websites should not be a huge expense. Hire a graphic designer to give you a framework, some stylesheets. Custom multimedia affairs for each article have always, always, always been annoying to me.
It was kindof upsetting to read this after having switched the article into Firefox's reader mode, because the page was completely unusable.
If you want to talk about consumers' wallets not existing in a vacuum: if your 3.5 KB article is sending me 10 megs of crap, then your mobile users' carriers are charging them more than the advertizers are paying you.
There are some real challenges in figuring out how to fund journalism, but if bandwidth is one of them you're doing something very wrong.
> We didn’t need paywalls on the early web because we focused on plain text from other users. Plain text is easier to produce, lowering the friction for people to contribute, and it’s also cheaper to store and transmit, lowering the cost of bandwidth.
I still want plain text, and I think there must be others like me — we just want to read what they have to say, which is more immersive than the ten megabytes of dreck they sent me could possibly be.
Over 6MB of those 10MB is just one bloated photo [1]. It can be compressed down to 1-2MB. Moreover, if it was a proper responsive image, it would not be larger than 100-200 KB for most readers because a good JPEG compressor can pull 2 bits per pixel [2].
Ironically, image optimization apps don't get that much coverage.
[1] https://techcrunch.com/wp-content/uploads/2018/05/vikbajaj20...
[2] https://arxiv.org/pdf/1703.04416.pdf
Guetzli is nice, but it's slow as balls. JPEGMini is a decent alternative. (I'm a happy customer of JPEGMini, BTW. No other affiliations.)
That image is a good example for any perceptual encoder. At 50% size it's 600KB (487KB with current master), and there's still a lot to be unhappy about, e.g. a hidpi image like that can be compressed a lot harder.
[1] https://getoptimage.com
In that respect there's always been an impedance mismatch between the web itself and the payment systems you could use on the web. Cryptocurrency has the potential to change that, which I find interesting.
It gets a little more complicated with bigger companies and software though. For example, how can adobe price Photoshop fairly for a hobby user that uses it once a month and a production designer who uses it 8 hours a day?
Now if they charge less, then that person (for instance, me!) can more easily pay for everything they love.
They just don't seem to understand that people have a certain amount of money, they cannot pay the prices for everything if they try to gouge too much money. Basically, they will get the more well off folks, but the issue is that there are only so many rich people - there are more ordinary people than there are wealthy people so subscriptions that cost a lot won't be much for the rich, but will be a lot of everyone else.