Subscriptions vs one time
It'd be awesome if businesses dig deeper into these areas!
The followings are my thoughts, but I'm saying them out loud.
I think Adobe Creative Cloud is the first SaaS1 I noticed. And everyone else followed which is now a big market2.
We are familiar with the subscription model long before the Internet, right? Milk, cable, water, electricity, etc essential things like these were already here. We only raised concerns when they increased the price every now and then.
Now with software subscription models, it is totally a different feeling. Are these essentials - yes, in a way. But as an Individual, I don't want to subscribe to everything and anything. At the same time, I wish to use some features of some apps.
Yes, it may be a valuable service, and there are future updates, they have a team on payroll and things like that.
I’ll clarify.
For example, take,
Streaming services
I’m okay with a streaming service subscription. But the thing is there are a lot of services locally and internationally. How is it possible to subscribe to everything? Movies are released to OTT platforms in a scattered model. Marvel movies are mostly on Disney services. Christopher Nolan movies are Amazon Prime’s content in most cases. And then there are Netflix content. Not everyone is rich. Always think of this case internationally, not just in US economics.
What if I want to see all the movies and shows? I’m not a fan of pirated content now. Huge capital is needed to make a movie or series. But the “where to watch” experience of these contents - financially - is not something I endorse. And I know monopoly is not the solution. There is a big pain point present here.
Amazon and a few other streaming services are doing something irritating these days. They introduced ads on paid plans, movie rental inside a plan, channel subscriptions within a plan, and on top of all this, some shows and movies are not available in some locations or some periods.
From a user perspective, these are all big barriers and irritating things, but from a business perspective, they need to push the growth each quarter. But I hate it.
I really don’t like the fact that to subscribe to a channel, I need a prime subscription in place! That feels like the “Cable TV” in disguise.
After the release of Oppenheimer, prime enabled rental mode for Nolan movies.
And the sad thing is that they don't care about these complaints. So, I’m not loyal to them per se.
With streaming services, it is usually costly if we go monthly. So we onboard with an annual plan. But sometimes we rarely consume. And if go monthly due to the feeling that we are paying an amount monthly, we may overconsume.
The curious case of a movie rental is that it is always more than the monthly plan!
Another scenario - YouTube
YouTube family plan costs $22.99(₹1,913.54 - as of Oct 2023) per month in the US but only ₹189($2.27) in India. Here the purchasing power parity is enabled, so I don’t feel like it is not worth it.
I’m a happy subscriber to it. But if they increase price3 then it is questionable.
You know, one time, I had four music streaming subscriptions! Spotify by default, YouTube music because I’m paying for a family plan, Amazon Music because I’m a Prime member, and a cell phone carrier-enabled music streaming app because obviously, I’m paying for a mobile sim connection.
Do I need these four? No!
Do I have a choice and I like it? Yes and no!
See this is the problem I’m mainly talking about. Even though others provide music streaming I like Spotify’s experience. So, either I need to compromise on my needs or just subscribe and shut up about it.
Work-related apps
I mainly use free plans for most things, but I still recommend others to subscribe, because I know that the full potential of the service can be really helpful for them, especially since I've explored apps on free plans myself. And yes some people subscribed! So basically I’m the user acquisition cost here.
Big discussions are happening about these free plan offerings. Small businesses don’t encourage it as it will light up their server bills. And it is understandable. Some don't even offer a free trial. Whatever it is, if someone asks for the credit card info even before I make my decision, I’ll pass.
Now,
I see a lot of online apps out there with pricing either per user or per team starting at $5 or $10. From a business owner's perspective if the said app or service solves any of the major pain points within the budget, then the pricing is justifiable. But for an individual user, it may not be worth it.
And to my knowledge businesses started to see this as an over cost and it started to reflect I guess. Here’s the new Coda pricing model.
In the case of Figma plugins, some plugins are essential, but when they charge two or three dollars monthly then from the value-based perspective it’s not worth it, it still solves the problem but we have a feeling that “paying this much amount for this monthly is not worth it”.
I think Google Play Store felt something similar and that’s why they introduced schemes like Play Pass. Even though I don't subscribe to it, it is a fair scheme.
Back to the Figma plugin case, yes it is costly to run servers and things, but the offering is the problem. Another solution here is a “pay as you go” mode. However, the correct pricing needs to be fine-tuned after all the commissions and other deductions.
Here my suggestion is to create a pool of plugins with multiple use cases and then create a subscription model like the Google Play Pass - but for everyone, not just for the Figma subscribers. Plugin owners can decide whether to be on this pool. It is always their choice. Because to them it is a usage-based billing and it is recurring. I can see a huge potential opening in this aspect.
Whatever the product is, if it is not offered correctly or the features are not clubbed in a justifiable way, I have less expectations about the outcome.
ChatGPT did well on this part. They introduced something big and raised all the expectations and then they introduced a pricing for power users.
One another example is Telegram. I’m a true fan of Telegram and its beliefs, but I don't subscribe to it, and sometimes I feel missing out. Maybe the reason is I don't find the offering as good and valuable. But it is still valuable for hundreds of thousands of people.
Yes I know
We can’t just demand free trials or free forever plans. Because it is not easy to run a software business. But I’m where I am because of the free plans most businesses offer.
So the remarkable saying arises… “If it is free, you are the product”.
Yes, I agree that. For Google and other big techs, free users are like the guinea pig, they acquired users with these free offerings, and some are deeply tied to these platforms with services like Google Photos4. They all are saying the same thing; either pay monthly or see ads. There is no in-between anymore.
In the case of Google, it is a trick. Their offering is not inclusive of everything. We still see ads, but for storage and priority support we can subscribe to Google One. And for businesses, there is Google Workspace. And then there is the Play Pass, YouTube. Google search is never ad-free.
In the case of Figma, the generous free plan attracted everyone, and a community was created based on it. As they learn and become power users and help businesses achieve goals, more people migrate to paid plans.
To humans, it may be like images and texts. But for an optimized AI, all these data are like a gold mine if you think about it. And in every sector, work is actually happening cloud-based these days. Almost everyone is subscribed to something.
Coda announced something exciting in their 4.0 release.
And one other inspiring offering is from Capacities
These free offerings really grab my attention and encourage me to explore their platforms further. I get excited when some useful platforms offer their service for free. I wrote about anytype’s different approach here.
I recently saw that 37signals announced their upcoming " Once " product series. They are trying to re-create that old time, I guess.
From the content-based understanding, I absolutely love it. But still waiting for how the hosting and other things will turn out. Is it for only business sectors and developers or is it for regular users too? If so, how? I have a lot of questions and I’m eagerly waiting for their initial product launch.
And
Some platforms are perfect for a monthly subscription because we need continuous support and updates from them. And some platforms are simply not.
I learned from the start-up communities that it is very difficult to set a pricing. It is a continuous iteration until you reach the peak point. If you offer it very cheaply, you will regret it when the user base increases. If you offer it higher, your growth rate may suffer. It is all about finding that balance.
I have another example
Take Affinity apps. They offer each of their apps individually as a one-time payment and everything combined in a universal license too.
And check where they stand about updates.
Not ending there… If you are upgrading from an older version, pricing changes like this.
This feels more affordable, justifiable, and valuable.
With a creator tool subscription, I have always had this concern. What happens to my data if I stop subscribing? Can I easily port to a different platform? How difficult it is going to be? I have always this feeling like I’m tied to it and it is very difficult to escape.
You know
Sometimes I just want to own a feature or product, like we own a laptop or mobile. Business often markets their pricing like, “subscribe now, and cancel any time”. I don't want this in every case.
I mean I don't want to cancel and resubscribe every time I need it. I’m okay with that model for some apps. But you know in some cases - like a plugin for Figma - I don't want to subscribe or pay as you go there. I just want to own it for a price. I don't want any updates or anything like that. If I want, I’ll renew my licenses. The main reason is that I may not use it regularly but I just want it there when needed.
On a different note
For reading platforms, it is a gold mine approach. But for readers, it’s a pain and they always look for a workaround. Almost every reading platform is locking up its content due to the AI revolution. “Ok, so you wanna read an article, pay up!”
And it is always in dollars which makes it very costly for other developing countries. I think all platforms need to enable purchasing power parity as soon as possible. Because most of these online subscription amounts are three/four/five times multiple than my monthly high-speed broadband bill. I find it very not effective.
I even saw some developers and designers offering designs and development as a service - that too with unlimited revisions! Everything is now a service it seems.
I understand that it is a complex subject. But I strongly believe one-time payment needs to come back - at least for some platforms.
And then there is a big rumor out there, but many Windows insiders rejected it, but it is still circulated by the legacy media, anyway let’s wait for the future.
Because can’t neglect the chances. Basically, every product is now a cow. They will milk as much as they need. Whatever it is I don't want a future where I have to subscribe to everything, like, literally everything!
I tried to cover a lot of things in this blog, without any order. I just wrote what came to my mind. Like I said in the beginning, I’m just thinking out loud.
This is just my thought and assumption, I don’t have any data to back this statement.
Cloud-first design tools like Figma were acquired for approximately $20 billion in cash and stock. Source: https://news.adobe.com/news/news-details/2022/Adobe-to-Acquire-Figma/default.aspx
I know they are going to. A lot of signs are there, like blocking the adblockers.
Because it is a hell of a task to move to another service. Going offline storage is basically a suicide at the current time. And all those photos and videos from years and years!