Friday, July 6, 2018 [Tweets] [Favorites]

Panel Discussion on Moving to Subscriptions

AltConf (tweet):

Major software products have moved to a subscription business model in the last couple of years - some successfully, some attracting considerable customer backlash.

We’ve seen many indie Mac developers considering it but unsure how to do it, from figuring out and testing the best pricing and billing models to avoiding backlash to managing the technical aspects of running both one-off customers and recurring subscriptions in parallel.

To help developers considering that approach, I propose a fireside chat where I would moderate a discussion with several leaders of awesome Mac products who have both strong opinions, and real life experience in that tricky move. […] The fireside chat will be moderated by Christian Owens (CEO at Paddle) and joined by Pieter Omvlee (Founder & CEO at Sketch), Max Seelemann (Founder & Head of Development at Ulysses), Oleksandr Kosovan (Founder & CEO at Setapp), Mark Pavlidis (Founder & CTO at Flixel) and Denys Zhadanov (Founder & VP Marketing at Readdle).

Previously: Productivity Apps and Subscription Pricing.

6 Comments

I personally like subscriptions, because I feel like (and hope) that it gives the developer incentives to improve the app and keep it up to date with current OS features and hardware. However, I have seen some apps where the subscription is completely out of whack. Want me to pay $5.99 per year for an app that I use daily or at least a few times a week? Sure. $5.99 per MONTH? Hell no. Some developers might think their app is worth that much, but when I have to consider that I have 10 apps that I'm paying monthly subscriptions to (plus Patreon for some YouTube channels)... well, something has to give. It's the same reason I have Netflix for $10.99/month because I get access to TONS of shows. But YouTube Red for $11.99/mo? Forget it. I don't mind watching a few ads, and I find it hard to believe that YouTube is making anywhere near $11.99/mo from the 10 minutes (maximum) of ads that I watch every month (since most content doesn't have ads before the video). If it was $11.99/year I'd sign up in a heartbeat, and I bet a lot of other people would too -- and YouTube would probably make more money in the end. I don't know a single person who has signed up for Red, but almost everyone I know has Netflix.

Omvlee would be a great speaker here, as he's talked about why the App Store stunk for profession, sell-once apps at Release Notes in 2015, took Sketch off of the Store, then essentially went to subscriptions the next year. Certainly has direct experience on many sides of this issue...

@ben G.

Yeah, developers have not thought through the ramnifications of moving to subscriptions. If your software is a one time purchase, then your customers scrape together the money and buy it if they need the functionality it provides. But the instant you make it a subscription, you have transformed your software into a line item in your customer's monthly budget, where it has to compete with all the other monthly budget items. Even if the total amount of money per year remains the same (and most subscription plans are *more* expensive), the calculus of what is affordable and what is worthwhile changes because monthly budget items *feel* different and for many people, are accounted for differently.

+1 to what @Glaurung wrote.

I appreciate what the developers of Sketch have done. Buying a license entitles you to use the app in perpetuity along with the next 1 year's worth of updates. It feels like the right alignment of incentives for both users and developers.

I would be happy to see more apps try this model. As a user it's easier to account for as a one-off purchase, and comes safe with the knowledge that you won't lose all access if you decide not to renew in a year. As the developer, it incentivizes continual steady improvements without needing to save up for a big point release. And in contrast to some other subscription offerings, Sketch has delivered on a steady stream of substantial improvements since moving to this model.

Beside common huge price increase my primary objection to most subscription models is the fear that if I fail to pay and things stop working. Adobe is the main bad example. Almost everything about their model is wrong. I practically decided to never subscribe to any of their products unless their change it.
Sketch on the other hand is a way better model, they offer free upgrades within the subscription period, but if I do not renew, I do not get updates, but all versions that I got during the paid period will work, and I can download them and install too.

[…] Panel Discussion on Moving to Subscriptions, Ulysses Switches to Subscription, Testing Auto-Renewable Subscriptions on […]

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