4 ms·

>So yeah, why is that? And is anyone else tired of the constant barrage of subscriptions for things that should be one off purchases? It's extremely tiresome.

by 37 4y ago

>So yeah, why is that? And is anyone else tired of the constant barrage of subscriptions for things that should be one off purchases? It's extremely tiresome. And surely the only motives are profit and control. It's gotten so bad that now auto manufacturers are charging monthly subscriptions to use features that are built into the car that you have already purchased.[0] It's a disturbing trend that will eventually have to fall short somewhere down the line. [0] https://www.motor1.com/news/597376/bmw-heated-seats-subscription/ https://www.motor1.com/news/597376/bmw-heated-seats-subscrip...

rincebrain 4y ago
Charging a sub for things like heated seats is obviously broken, but I also don't know if people have an appetite for what the upfront costs would be for many pieces of software that are currently subscription based, in order to provide support for any length of time. Look at the pricing for IDA, which tries to balance having an astonishingly good product, but very limited market, for how this can end up distorted without being because the company is trying to make money hand over fist. It seems similar, to my eye, to a problem with video game development - the total cost of development continues to grow as expectations for many games do, faster than we make production costs cheaper, but consumers are very sensitive to prices upfront, so we end up with many alternate revenue streams to try and make up the gap, to say nothing of the continuous revenue needs for anything ongoing. And people lament companies being greedy, which is sometimes the case, but ultimately, if your game costs over 45 million euros to produce, retail price is $50, and you get perhaps 50% of that (to be generous), you need to sell 1.9 million copies to break even, let alone earn anything back. [1] But revenue streams like in-game cosmetic stores may get you a very different profit cut, even if they're only a few dollars each. [2] The same logic holds for things like recurring subscriptions or ad-supported content - much smaller amounts, but many more sources, adding up to mitigate this problem. I don't like it any more than anyone else does, but it's not just naked profit seeking, it's often that development and maintenance are expensive, and more people would pay $20/mo for Photoshop when they need it than would pay $500 or more upfront, and I don't see a good alternate model that works in the majority of cases. [1] - yes I'm eliding the complications of other companies putting up the upfront costs in exchange for all the money until their costs plus are made back. [2] - Also not touching the economics of gambling in-game and the long tail and whale economies.
- falcolas 4y ago
  > The same logic holds for things like recurring subscriptions or ad-supported content - much smaller amounts, but many more sources, adding up to mitigate this problem. And at some point your customers are saturated. How many subscriptions before they can't afford another subscription? After all, if they're subscribed to the max, it's not as if their budget will have room for another one next month, or even next year. It's fully allocated, and will likely remain so.
  - rincebrain 4y ago
    Indeed; from my perspective, from the people I know who regularly use enough subscription services that they're close to or saturated, they will drop something they're not using as much if they need e.g. Photoshop for just one month, or the like, so even that mixed subscription revenue of only getting a month every so often is a win for them in that case...
- MisterSandman 4y ago
  What's IDA?
  - syntheticcorp 4y ago
    It’s a good disassembler that is fairly expensive. https://hex-rays.com/ida-pro/ https://hex-rays.com/ida-pro/
- phrom 4y ago
  At least my lament is not so much that it is naked profit seeking, but that it is naked profit seeking that warps the product. In the example of games, that additional revenue stream of day 1 DLC means content being arbitrarily cut off from the game before it's even released. That premium subscription with a +30% XP bonus is often a -30% XP loss for normal players in disguise. Those loot boxes and battle passes are holding hostage rewards that would be given out naturally through gameplay in another time. Those energy and gacha systems are preying on whales and gamblers. In the case of software, at the same time the subscription model got popular, every application has also been reimagined as a "service, not a product". Maybe the death of local desktop apps would have happened anyway. I don't know.
closeparen 4y ago
Cars are funny. The automakers pretend they are simply selling an object for a pile of money, but in the real world of the dealership & lending ecosystem it's all 60-72 month loans and service contracts and warranties. And it's all pretty smarmy compared to what people would accept from a reputable national brand. If cars are subscription products anyway, then having the automakers internalize & centralize that part isn't the worst thing.
- FearlessNebula 4y ago
  A loan from the bank is very different than a service or subscription with the manufacturer to me
  - TeMPOraL 4y ago
    On that note, perhaps banks should be the middlemen between companies seeking recurring revenue and people seeking one-off purchases? Have the company charge $X, the bank turns that into $X/24 + interest - this already exists, but it's too tied into the credit system. Perhaps there's a space for innovation there, to make a product specialized for mediating between subscriptions and one-off purchases.
    - fragmede 4y ago
      That's all of finance, translating from one to the other. At the consumer level, Klarna seems to offer to go from lump sum to subscription. Or just using a credit card, really.
- throwoutway 4y ago
  Not accurate exactly. The bank finances the loan, the dealership gets the money right away. The dealership gets a small commission from the bank for being the sole proprietor of the financing. The warranties are the dealership though
  - closeparen 4y ago
    If you look in the fine print, the warranties are often third party insurance companies. And the financing bank is often the OEM! And the dealer also has its inventory on credit, and the creditor is also often the OEM. Yes, there's a web of entities and transactions going on, but at some level that's accounting. You pay a monthly fee in exchange for use of the car. Making this deal with a whole ecosystem may or may not be better than making it directly with the OEM.

by 37 4y ago

rincebrain 4y ago

Charging a sub for things like heated seats is obviously broken, but I also don't know if people have an appetite for what the upfront costs would be for many pieces of software that are currently subscription based, in order to provide support for any length of time. Look at the pricing for IDA, which tries to balance having an astonishingly good product, but very limited market, for how this can end up distorted without being because the company is trying to make money hand over fist. It seems similar, to my eye, to a problem with video game development - the total cost of development continues to grow as expectations for many games do, faster than we make production costs cheaper, but consumers are very sensitive to prices upfront, so we end up with many alternate revenue streams to try and make up the gap, to say nothing of the continuous revenue needs for anything ongoing. And people lament companies being greedy, which is sometimes the case, but ultimately, if your game costs over 45 million euros to produce, retail price is $50, and you get perhaps 50% of that (to be generous), you need to sell 1.9 million copies to break even, let alone earn anything back. [1] But revenue streams like in-game cosmetic stores may get you a very different profit cut, even if they're only a few dollars each. [2] The same logic holds for things like recurring subscriptions or ad-supported content - much smaller amounts, but many more sources, adding up to mitigate this problem. I don't like it any more than anyone else does, but it's not just naked profit seeking, it's often that development and maintenance are expensive, and more people would pay $20/mo for Photoshop when they need it than would pay $500 or more upfront, and I don't see a good alternate model that works in the majority of cases. [1] - yes I'm eliding the complications of other companies putting up the upfront costs in exchange for all the money until their costs plus are made back. [2] - Also not touching the economics of gambling in-game and the long tail and whale economies.

falcolas 4y ago
> The same logic holds for things like recurring subscriptions or ad-supported content - much smaller amounts, but many more sources, adding up to mitigate this problem. And at some point your customers are saturated. How many subscriptions before they can't afford another subscription? After all, if they're subscribed to the max, it's not as if their budget will have room for another one next month, or even next year. It's fully allocated, and will likely remain so.
- rincebrain 4y ago
  Indeed; from my perspective, from the people I know who regularly use enough subscription services that they're close to or saturated, they will drop something they're not using as much if they need e.g. Photoshop for just one month, or the like, so even that mixed subscription revenue of only getting a month every so often is a win for them in that case...
MisterSandman 4y ago
What's IDA?
- syntheticcorp 4y ago
  It’s a good disassembler that is fairly expensive. https://hex-rays.com/ida-pro/ https://hex-rays.com/ida-pro/
phrom 4y ago
At least my lament is not so much that it is naked profit seeking, but that it is naked profit seeking that warps the product. In the example of games, that additional revenue stream of day 1 DLC means content being arbitrarily cut off from the game before it's even released. That premium subscription with a +30% XP bonus is often a -30% XP loss for normal players in disguise. Those loot boxes and battle passes are holding hostage rewards that would be given out naturally through gameplay in another time. Those energy and gacha systems are preying on whales and gamblers. In the case of software, at the same time the subscription model got popular, every application has also been reimagined as a "service, not a product". Maybe the death of local desktop apps would have happened anyway. I don't know.

closeparen 4y ago

Cars are funny. The automakers pretend they are simply selling an object for a pile of money, but in the real world of the dealership & lending ecosystem it's all 60-72 month loans and service contracts and warranties. And it's all pretty smarmy compared to what people would accept from a reputable national brand. If cars are subscription products anyway, then having the automakers internalize & centralize that part isn't the worst thing.

FearlessNebula 4y ago
A loan from the bank is very different than a service or subscription with the manufacturer to me
- TeMPOraL 4y ago
  On that note, perhaps banks should be the middlemen between companies seeking recurring revenue and people seeking one-off purchases? Have the company charge $X, the bank turns that into $X/24 + interest - this already exists, but it's too tied into the credit system. Perhaps there's a space for innovation there, to make a product specialized for mediating between subscriptions and one-off purchases.
  - fragmede 4y ago
    That's all of finance, translating from one to the other. At the consumer level, Klarna seems to offer to go from lump sum to subscription. Or just using a credit card, really.
throwoutway 4y ago
Not accurate exactly. The bank finances the loan, the dealership gets the money right away. The dealership gets a small commission from the bank for being the sole proprietor of the financing. The warranties are the dealership though
- closeparen 4y ago
  If you look in the fine print, the warranties are often third party insurance companies. And the financing bank is often the OEM! And the dealer also has its inventory on credit, and the creditor is also often the OEM. Yes, there's a web of entities and transactions going on, but at some level that's accounting. You pay a monthly fee in exchange for use of the car. Making this deal with a whole ecosystem may or may not be better than making it directly with the OEM.