I have subscription fatigue
POLL below!! Please vote.
Laying down the law
Aight. I’ve had enough. No offense, but if you are selling subscriptions, I won’t even consider your app due to pricing.
Use a lifetime license option, charge per major version, a year of updates, permanently unlock features, a free tier, etc.—literally anything else.
I’m not passing any judgement on your app itself, it’s just there are way too many things asking me for $5/mo. And I already skip coffee and Netflix.
The best thing I ever did as an indiehacker was have low overhead. I don’t want anymore subscriptions, ever.
The history
I started hating subscriptions when Adobe first screwed me over. Suddenly, I couldn’t own the software anymore. The second I stop paying, everything is worthless. I was a high school student—it’s literally unaffordable. In college, an Adobe evangelist spoke to my class, bragging about the high pay and stock options of working for them. I asked about the subscription switch, and the reply boiled down to not understanding my concerns and thinking people should just get over it. The whole saga is just infuriating.
Now I support Affinity, not Adobe. The Paste App switched to subscription without delivering any new features—I went from recommending their app to all of my friends to using their competitor. I put my money where my mouth is.
Unfortunately, I have had many more similar experiences over the years. Great products are forcing me to stop supporting them. It’s so frustrating. And it’s spreading like Covid.
The future
I really hope you stop hanging a subscription around your customer’s necks. At the very least, let us use the last version of the software we purchased. Don’t make all of our effort we put into using your product go to naught. Don’t push me away—make me want to come back time and time again.
Lifetime deals (LTDs) are more popular than you think. Many indiehackers post about their unexpected successes with them, like this story just two days ago. Shoutout to the awesome makers who have given me a lifetime license when I email with an offer.
I know I’m not the only one. Recent studies show:
Nearly half (47%) of U.S. consumers say they’re frustrated by the growing number of subscriptions and services (source)
Please, let me be your customer. I love and support many apps. Just stop with the subscriptions.
P.S.
As an indiehacker, I totally see why subscriptions are appealing. But, see if there’s a compromise out there with your customers. Understand their perspective, and you’ll make better products too. I invite you to join me in the comments section.
EDIT: Great comments! Loving the discussion. I’ll respond to everyone this evening.
EDIT 2: Thanks everyone! We have more than a hundred comments and votes in the poll. I read a lot of great insights and learned a lot.
</rant>
Subscription fatigue is real, but at the same time, the developers who make the software you use gotta eat.
Also, if it's a business expense, the math feels a lot different to me.
For example, I do software development freelancing/consulting. I pay a monthly fee for some software that handles my time tracking, invoicing, payment processing, digital signatures on contracts, etc.
While I could certainly build my own software to do this, it would cost me thousands in lost earnings to spend time creating that and maintaining that. I'd rather pay $19/mo.
I wrote this in another comment, but I think there’s a balance to be had.
I think there’s many alternatives pricing strategies that support continuous development, like a year of updates or major versions.
Just yesterday, I paid for another year to https://devutils.app/ but he lets me use the last update I purchased. He’s been making continuous updates and I want to support that.
There’s a big difference to me between saying “Here’s a feature filled update, wouldn’t you like to buy it?” and “We’ve added new features, and if you stop paying us you lose all access”.
Can’t there be a middle ground?
Sure, subscriptions are a no-brainer to medium-to-large businesses. Subscription only for businesses makes sense.
I do freelancing too, but often have a few large contracts, rather than many small ones. For me, the math for subscribing to a lot of these products just doesn’t work out.
There’s always a break-even point. I guess I just don’t like feeling held hostage for a subscription. I’ll always be looking for an alternative in these cases.
Maintaining multiple production versions of your web app is going to be like pushing rock in the mountain. Just think about maintaining multi version SQL database, that sounds like hell to me.
Also guys who sell lifetime licenses will always earn less. It will make them lose in marketing fight against products that offer subscription.
Based on what I heard, customer acquisition cost in most SaaS products is so high, that it takes product 6 months on average to breakeven after acquiring that customer. So you need to be caught in subscription for around 6 months before you pay anything comparable to what you would have paid when purchasing lifetime license.
Subscription makes you pay less if you manage it right. Being a customer myself, I only wish that SaaS companies offer subscription that is only charged when you are using it. I have too many services that are super useful but I use them rarely.
I have, on rare occasions, actually seen companies doing this. It’s a really cool concept that I wish was more common
Not necessarily. Just as an example, if you have high user churn, you can make money if you convince them to purchase an LTD priced at a longer commitment. It also appeals to a customer segment you may have missed. Anyway, it doesn’t make sense in all cases, but I like the option.
Affinity is doing very well in its marketing fight against Adobe.
There’s lots of other methods that don’t involve this mess, such as usage based options (pay as you go, volume pricing), permissions that restrict certain features like the Agenda app, etc. I find most options are better than subscriptions as a consumer.
I like pay as you go approach very much. Although not all services are fit for this. Web hosting that charges you per visitor sounds much more expensive to me compared to just paying monthly fee for VPS.
I don’t like per visitor either. I’m more thinking usage by resource, e.g. bandwidth, server hours, per database, and stuff like that.
That’s why I like AWS Lambda so much—pay only for the time your function runs. Scale up and down with little effort. If I get to a point where it’s cheaper to run on VPS than on lambda, I’m probably successful.
That greatly depends on the scale & usage
There are circumstances where subs are much more appealing for the users over other pricing strategies.
🎁LTDs can make the cut only if you trust the product.
Most LTDs account for a minimum 10-month revenue in subscription terms, so you need to be sure that you stay with the product for the next 10-12 months, a commitment you don't need opt for, in flat rate.
🛣️ Pay as you go (PAYG) can scale unfavorably and lead to worsening revenue cut-offs.
🎀 Free trial is an excellent model to go for it if you understand the value metric, but that does not hinder the subscription to be applied. It's more of an acquisition technique than part of your pricing.
🔊Volume Pricing can act similarly to PAYG and scale in unfavorable terms. A company can benefit significantly from a sub rather than an applied commission.
I opted for "No" in the poll. Just making some points of reference.
I post daily pricing tips on Twitter, would love to know your thoughts.
All of the tradeoffs you make are fair points. However, I think that subscriptions with their lack of ownership often outweigh those other negatives and uncertainties.
It seems you don’t like PAYG and Volume Pricing, but most times in the wild I see that users are just sent to the enterprise/custom plan at a certain scale. If this type of pricing doesn’t have major markups between tiers, then I find it’s actually pretty nice.
LTD is a risk, but I usually take it.
Free tiers are really nice if you are targeting teams for paid plans, while letting individuals use it for free.
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I’m not surprised you made your twitter to support your SaaS https://www.pricewell.io/, but it seems you’re providing value to your followers, which is nice. Nice mix of tips and posts about how you and your company are doing. At some point, I’d recommend putting together an ebook or guide with all the tips you’ve accumulated.
Thanks @fromtheexchange for the feedback. Would be interested in acquiring a book with pricing strategy & tips?
(will DEFINITELY NOT be a subscription 😂)
I totally agree with the enterprise plan on scaling operations and would be interested to know your take on Enterprise plans.
Are they just plain flat tier subs? Do they lower commission and also charge reccuringly?
In PriceWell we still don’t support enterprise plans and I wonder if there’s a procedure to go at it.
You’d have to sell me on it, maybe backup your claims with data or your experience—give me a sense of authority on the topic. Combine that with an pre-order discount and I’d probably buy it 😂 just ping me again here if you do
Usually there’s a setup fee upfront, a base subscription fee, a subscription fee per seat, addons for specific features like domains, usage based fees, etc. On top of all that, you may give some discounts for bulk purchases. Rarely, they have an obscure SSO or another similar system that they pay you to integrate with. Long story short, it varies a lot.
For fun, you can email SaaS that handle enterprises, such as https://vercel.com/ and just see what the experience and pricing is like.
Would you mind elaborating more on this comment:
"Pay as you go (PAYG) can scale unfavorably and lead to worsening revenue cut-offs."
I'm considering this as an option for my product and am trying to learn more about its pros and cons. Thank you!
PAYG is pretty good. If it scales unfavorably, just push your most frequent users to an enterprise plan that makes sense for both of you.
Thanks, good idea. Maybe PAYG could be a bridge to subscription plans.
Yeah, B2B falls under a different category than B2C. For businesses and enterprises, you should be charging subscriptions.
Meaning that early on, costs can be minor, and seem pretty apparent that the model works in favor of the customer (pay when you get paid).
However, on the latter end of scale, you might find yourself paying way too much for a service that you can get much cheaper on a flat rate sub somewhere else. (Stripe vs. Paddle seems a pretty good example in that case)
The limitation of this model is that you can pay pretty large sums when you hit the sweet spot.
Thank you for the insight, @Kod. Yes, as a user myself, the PAYG option can be intimidating. That being said, there are times where I would prefer it - if I wasn't sure how often I'd actually use the product (versus signing up for a subscription). I'll have to look more into your Stripe/Paddle example. Much appreciated!
It depends on whether the pricing is fair, how frequently I use the product, and the non-subscription alternatives.
For example, I use Microsoft Office 365 at $100/yr for the entire family and at that price, it's a steal because I use it pretty much every day. I stopped using Dropbox because OneDrive is part of that price.
There was a time when I used several Adobe products (Illustrator, Photoshop, Premiere). Again, I used it every day, and I think it was something like $60/month. I think before Adobe started offering subscriptions, that combination of apps would have cost a couple thousand dollars, so ironically the subscription offering made it more affordable. But when my work changed and I only needed it occasionally, I stopped. I actually tried Affinity Designer then and liked it even better. At $55 one-time, it's a steal. I'd pay $100 or maybe $150 for it. And if Affinity offered a reasonable subscription (like $10-20/mo), I'd be fine with that too. Also, I think Adobe is a posterchild for bad practices because of their shady cancellation policy.
I guess on that last point, I guess it depends on competitive options. If there is a equal product that is reasonably priced one-time, yes that's better than a subscription.
I have also seen companies that charge both options, and at that point, it depends on the "payback period". I saw one company charging $8/mo or $300 one-time. That's more than a 3 year payback period. For me, given those options, the $8/mo is a no brainer, there's no guarantee I'll be using that product for more than 3 years, and even so, time value of money is a factor.
If the payback period is more reasonable, like 1.5 years then I would consider it.
You have a point with Microsoft Office 365, especially when you split it with family. It’s a good deal for a product I use often. Pretty fair.
For Adobe, it changed from being $500 once for CS6 to $250 for a single year for CC. It also hurt other small businesses like my uncle’s print shop to switch to an annual subscription. There’s no doubt that a subscription increased their profits and was more expensive for many businesses. When you buy a major version, you can buy every other release or just keep the one you have—you don’t lose it the instant you stop paying for it. Hate their cancellation policy too.
I really like your payback period insight. I’d much rather make a bet on the company and pay 3 year’s worth in advance. It’s really nice having an option for both.
My recollection was that Adobe CS used to be much more expensive.
According to this article, the entire CC was $2,500 pre-subscription, which made the $50/mo (back in 2013) much more accessible. That said, I don't think anyone uses the entire CC suite, so it really depends on how many apps you need.
Anyway, I think their pricing is what opened the doors for less expensive products like Affinity. That's just how competition works. Customers just need to vote with their wallet.
Oh, I was comparing student prices, and the suite without the video apps.
But regardless, it’s only cheaper if you upgrade the entire suite for every major release (instead of getting every other release, every third release, or just buying it once). Not a single freelancer, small business, or hobbyist I know ever purchased every major version.
In my view, it was a substantial price increase combined with no longer owning the software—a lose, lose situation.
That’s exactly right! I’m going to continue “putting my money where my mouth is”.
I voted "yes". In a lot of cases, a subscription model is the only viable way for the business to provide me with their services.
One-off pricing works fine when the software is something that can be "owned", i.e. it works offline without the need for the software to communicate with the company's server.
But most modern SaaS companies are essentially UIs for server-side processes. There's nothing to "own" per se. Without a server and a database, the front-end is useless. And that's a bit unfair to hope to continue using that company's server when you're no longer paying.
Usage-based pricing is a double-edged sword. It can lower the entry barrier. But at scale, it can substantially increase your cost. And it often makes planning future costs very difficult.
I systematically avoid companies with weird, "free" or non-existent pricing strategies. If I can't understand how you're making money from your product right now, I'm not even considering using it. I know you're gonna have to pull off some shady crap later on.
Not a fan of lifetime deals either. Because they're not viable long-term strategies for the makers. So they'll either the suck up the costs I'll incur or they'll have to ask me for more money in the future.
Subscriptions are upfront about their intentions. You pay $X/month, you can do Y for as long as you pay.
With a subscription model, you know how much you pay now and how much you'll pay in the future. Most decent SaaS companies will grandfather you in if they increase their pricing. And they will continue creating new features without an increase in cost.
So in short, from a consumer perspective, I like the subscription model because it's clear, fair and predictable.
I like subscriptions when they are justified though. Offline tools or one-off services are a definite no-go when they use subscriptions.
Some valid points but
just means you got your costs basis wrong.
When the cost is based on a single variable, it's not usually a problem. But too often, the total monthly cost is based on a combination of variables -- and that can lead to very unpredictable and de facto more expensive subscriptions.
Good luck predicting ahead of time how much you'll pay to Google when using the whole Firebase suite (Hosting, Firestore, Cloud Functions...). I know that for me, now, it's much more than I would be willing to pay if it was marketed as a "monthly subscription fee" (so well done, Google!)
But it also means that when I had no traffic at all, I paid $0. And since the cost is directly indexed on my users' usage of my product, it feels "acceptable" and it can go under "Cost of Goods Sold" rather "Software & Hosting" in my income statement.
So, really, a double-edged sword imho.
As a customer, usage based pricing certainly can be more expensive. If it does bother me it means I am using it enough to switch to a (then cheaper) subscription. Not having a fix monthly price does create a risk - unless there some budgeting measures in place. But they usually exist with a plan as plan limits as well.
As a business owner, I just need to set cost basis high enough for the usage based pricing so I am not net negative with the fix costs I have.
Re-reading you probably meant the customer view.
For me, it's rather a problem of fair pricing. Many subscriptions (like Adobe) are a good deal for the superuser and not the hobbyist. LTDs aren't necessarily better in my view. And use-based pricing makes me too mindful about my spending, often avoiding using the product.
If nothing else, the resistance towards subscriptions can open up an opportunity for indie hackers, a niche market, only by providing alternate payment options.
I think a healthy combination could be a subscription and a pay-per-use model. But it just isn't a thing (yet?). I get the desire for subscriptions as a company, but I don't believe it's sustainable in the consumer market - at least not in the long run.
Yeah, there’s several apps that I use irregularly, where a subscription just isn’t worth it.
My friend says you’re right—they don’t want me as a user 😂 they only want the rich hobbyists
I wish it didn’t have to be that way.
I’ve seen that for Affinity, and they’ve made some truly amazing apps. Glad to see them give Adobe a run for their money.
Doesn’t have to be an LTD, it’s just an option I like. Pay per major version, etc. are all better than pure subscriptions.
I actually like the usage based pricing, assuming it’s fair without major markup between tiers.
I am also rooting for that. I even don't mind the markup. As long as they don't slap on a monthly fix amount if usage is below a threshold.
I actually think that Paste did a great example of migrating to a different pricing model, they let all the existing users use the current version of paste, but without new upgrades. This allows them to ship and invest in new features.
That certainly helps. After all, I’m still using the old version.
I just don’t see why I need to pay $14.99 per year for a clipboard app that hasn’t had any major updates to justify it. That’s a total of $45 for better M1 support and Apple shortcuts integrations.
I’ll probably switch to PastePal once Paste’s old app finally breaks, since it’s just a one-time purchase of $14.99.
For some apps like Parallels, which have to deal with all sorts of OS updates, then subscriptions are more justifiable, but even they still let me purchase major versions.
But for a clipboard manager? I don’t think so. A year of updates? Sure, when a new OS breaks it or they make new features I need. $14.99 year after year after year? No.
Agree!
That is why two years ago I decided to build an on-premises management software suite for SMEs (https://eazitron.com), because I noticed an increase in the numbers of subscriptions for B2B (and B2C) software both on- an offline. Paying a product over and over seem increasingly annoying for a lot of people, and it is justified.
Although I must admit that some apps need to be subscription-based for obvious technical/financial reasons, there are clearly businesses overusing this business model (e.g.: legal terms generators requesting subscription to their services even though you only need these terms once).
I think that offering alternative business models to your customers is a win-win situation, and in 2022 more makers should go back to this system. Especially when there's no valid reason for taking away from your users every single month.
Well-said @KudzaiLX you make a lot of great points with great examples too.
Sure, I think there are some online apps with recurring monthly costs where usage based options (pay as you go, volume pricing) or subscriptions make sense, especially if they are targeting businesses. Though, many apps can be made for cheap on modern hosting providers. The cost for backing up data or settings online has been minimal in my experience.
Thanks @Fromtheexchange! I must say that you raised a hot topic, according to the upvotes and comments number!
What would be interesting actually would be to list the non-subcription business models available to makers; indeed, I think it is not always made like that by them, I think there's more of an "ignorance" (and I think you can include me as well) of the alternatives you can offer to your users/customers.
Glad you liked it! Thank you for joining the discussion @KudzaiLX
First time being ratio’d on indiehackers hahaha
You’re the second person recommending a followup of the different options. Here’s a few linked to examples:
But I can expand on it further with more details and examples. I’ll ping you when I post it.
I sure hope so!
Thanks for having summarized! That are good ideas for future developments within the Indie Hackers community 👉
Great! Thanks in advance, I'll be waiting for the updates!
Subscription model, I believe, actually delivers very strong value. Psychologically, it may be annoying to see a bunch of $9.99 charges on your credit card. But lot of people forget that back in 1999, Microsoft Office cost ~$600 for new users and ~$300 for those upgrading. Adobe Photoshop? ~600-700. And remember that $600 in 1999 dollars is about $950 in today's dollars!
Now all of these advanced pieces of software, which cost MILLIONS to develop, cost us ..$9.99-19.99?/mo while being continuously worked on and improved without users needing to buy $300 upgrades. To put it in perspective, an accidental parking ticket costs $120 - full year access to Office or half year access to Photoshop. Saving a few gallons of gas every month ($4.5-5/gal) pays the monthly cost of these tools.
Software has largely been deflationary - we get a lot more value today at a cheaper price than 10 or 20 years ago. And partly that can be attributed to recurring subscription model that spreads the cost around and provides stable revenue for companies to continue supporting that software and continuously advancing it.
"I really hope you stop hanging a subscription around your customer’s necks" << No one is "hanging" a subscription around your neck. If that piece of software isn't important to you - you won't buy it. Like YC said - its good for a company to raise prices to the extent they lose 20% of their customers. So if the company loses a potential customer who won't use a product solely because its a subscription model - that's fine.
LTD front load the revenue for the company but once that market is saturated with LTDs and the revenue dries up - so will the development of the product. Obviously if its a large /growing market, there is a lot of runway. But for smaller markets, the motivation to develop/maintain the software will probably dry up along with the revenue stream much faster.
Sure, I’d agree with that in general. As computers became more widespread, they and their software gets cheaper.
However, I think there’s been an inflection point for me within the last decade. My software costs today are more expensive than they were 10 years ago, and that’s largely due to subscriptions (not something like inflation).
Not to go off-topic, but I’ve never had a parking ticket and gas where I live is $3.20/gal. It was less than $2.20/gal a year ago. Low overhead and low cost of living are vitally important, and subscriptions make achieving those goals more difficult. I’m tired of so many things asking me for $9.99/mo.
I could say the same about the miracle of modern cars and airplanes becoming commonplace. That’s all nice and good, but costs still matter to consumers. I need to be watchful of my spending, whether it’s on travel, software, or other expenses.
Not necessarily, take Adobe as an example. Used to, if I were in school, starting out freelancing, or had a rough month, I would be fine since I owned my software. No once could take it away from me. It’s valuable to build equity through ownership—land, housing, cars, machinery, instruments, hardware, and software too. Eventually both hardware and software may need upgrading, but these tools can last years, a decade, before becoming completely obsolete.
When purchasing upgrades, I can choose to upgrade anytime I like or decide whether it’s in the budget. With a subscription, you’re hosed: you are forced to continue with Adobe or you literally can’t be in business and lose access to all your past work. That’s why it’s like having a subscription around my neck—pardon my language, but it’s a damned if you do, damned if you don’t scenario. And that’s not the way it always was or has to continue being.
I’m not saying it was a dumb move for Adobe. They had their monopoly and their shareholders rewarded them for switching to subscriptions.
But, it hurt me. It hurt freelancers that I knew. It hurt a family member’s small business. It hurt my hobbyist friends. Subscriptions hurt people on the low end of the spectrum. Just because it’s good for YC, Adobe, or shareholders does not mean it is good for me, the consumer.
Luckily, Affinity has become a decent alternative to Adobe Creative Suite. Apple’s video apps have been able to replace Premiere Pro for me. Prioritizing short term profits and leaving the door open for the competition may have hurt Adobe in the long term. Time will tell.
Software is important to me, and I’m often willing to pay for it. It’s just frustrating when good products are pushing me away, such as the clipboard app I mentioned or other apps that have no business using a subscription model.
It’s just an option I like. It has some advantages, but doesn’t work in every case. That doesn’t change the calculus for me that pure subscriptions are generally not in my best interest.
You make great points from a B2C or "hobby entrepreneur" point of view.
From a B2B point of view, LTDs fucking suck.
I've seen countless people saying things like "But broo, you don't need to pay server costs because 90% of LTD customers won't even use your product".
AND THAT'S A GOOD THING?!
Here's the deal.
I'm not categorizing myself against Netflix or Amazon Prime...
Instead I'm solving a business problem, that problem costs me money to solve, a recurring cost.
And for that reason I can charge a subscription for it, and it won't be dirt cheap.
And I'm going to sell my service to businesses that appreciate my efforts as both an engineer and founder.
Because when my product lowers annual churn by 4% for a business doing $1m in ARR, it's a no-brainer that I'm charging $800/month for it.
Just solve a real problem.
Thanks!
Oh yeah, subscriptions only for B2B. I think I mentioned that in other comments, but didn’t make that distinction in the post. You can and should charge an arm and a leg for the business and enterprise options.
It is difficult nowadays to have a sustainable business without subscriptions. Especially in B2C where customers are fairly stingy (compared to b2b where businesses do not experience the same fatigue). A lot of B2C startups fail because it is very difficult to make money from regular people (for no fault of theirs given the state of the world) unless you specifically target an affluent group like other tech employees.
There are four things driving subscriptions:
Well, I do have subscription fatigue. But, I do shell out money for software on a regular basis. Subscriptions are hard to justify year after year, rather than a one-off splurge. But, the world has been rough lately, especially with Covid.
Totally agree, B2B should be subscription based. Saved time is saved money.
I do like privacy-centric products. Though, with subscriptions comes vendor lockins, and I think that freedom to move my information around is important too.
Funny enough, my friend said that you’re right—they don’t want me as a user 😂 they only want the rich hobbyists
Going to disagree here. As a developer, cloud costs are next to nothing. $5.99/TB (not GB) per month for data. Lambdas and serverless that only charge you when you use them (process 1,000 long jobs for $1). I see a split in consumers, with some purchasing subscriptions and some purchasing lifetime options. I think it’s viable to have both.
I guess it depends how you use subscriptions. I sub to a few services, and use them daily in my business.
If I didn't need them - I toss it. I never felt like I was owed anything because I was a customer for years.
This also opens the door for me to continually swap my tools in my toolkit every few years with very little financial overhead.
If I had the choice between paying 50 / month or $1200 for a lifetime option - I would opt for 50 / month everytime.
The reason being, in a year or two my business will look drastically different than it does now.
I understand this is not everyone's experience - just my own views.
It may be old-fashioned of me, but I like to “own” my software. Not necessarily feeling owed, but there’s a big difference to me between renting and owning, both in software and in real estate. And it feels like a lose-lose when prices go up and I lose ownership.
I use many of the same apps over the course of many years, but I can see how everyone’s mileage can vary.
Totally! I’m not saying get rid of annual plans, it’s just there are similar ways to charge (like year of updates) that are more fair to me as a customer. And, LTDs are nice to have as an additional option, as I prefer the $1200 hypothetical.
Thanks for jumping in with your opinion!
All valid points.
Love the back and forth in here 👏🏻
Helps expand my thinking a bit 😁
Same to you. It’s been fun 😄 I’ve enjoyed reading all the insights
This is definitely an issue I hear from my early adopters. I posted the same question here recently.
The problem with the LTD is that it seems so expensive if you want to compensate for 3-5 years of subscription use. $4/mo or $40/yr seem a lot more appealing than plonking down ~$100 one time.
I'm planning to use a subscription model but allow you to use the app forever with no upgrades if you let the sub lapse. I think this is a good compromise but will still potentially turn off people with subscription fatigue.
That’s a great compromise! I would still purchase the LTD, given the option. I think you’re being reasonably fair with your pricing strategy.
I've been enjoying reading the comments, and I love this pricing option!
I feel like this definitely hits all the important points.
I have started to switch to annual subscriptions to mitigate the subscription issue. It has some great side effects:
I don’t mind annual plans. Getting a discount for pay-per-year is totally fine by me. It’s just I want to keep what I paid for after the year if I decide not to renew or need a gap between upgrades. Perhaps in these cases I would save money by using a free alternative, though I wouldn’t mind paying for software if I actually own it. I also don’t like autorenewals, but that might just be me.
As a SaaS developer, I have subscriptions, because you won't subscribe if I don't work on that product.
Everyone wants to have productivity software to do their job better to earn money and think that developers behind software built app once and that's it. Nope. You want features, you want support, you want bugs fixed. It is an ongoing process.
Yeah Adobe went nuts. That's true.
I still pay for 1password, Pycharm, Polypane, some other things too. Because I know they have to work on their apps, every month.
And you? LTDs? You will be jumping between apps because the app you bought thru LTD needs to feed its developer. It is never ending process. You just will always be on the end of spectrum that is trying the LTDs because developers need initial money for their app and validate their idea. GL mate.
I think there’s many alternatives pricing strategies that support continuous development, like a year of updates or major versions.
Just yesterday, I paid for another year to https://devutils.app/ but he lets me use the last update I purchased. He’s been making continuous updates and I want to support that.
There’s a big difference to me between saying “Here’s a feature filled update, wouldn’t you like to buy it?” and “We’ve added new features, and if you stop paying us you lose all access”.
Can’t there be a middle ground?
I personally like LTDs, and they are good options if you get people who wouldn’t subscribe otherwise and can end up being more profitable if you have a churn rate higher than the LTD cost. They also help apps get off the ground. Not for everyone, but it’s a valid option.
Subscriptions add up damn fast.
Subscriptions have exploded. From Netflix to Disney Plus to HBO Go to Hulu to Amazon Video to YouTube Premium and more. For software, everyone from Adobe to my clipboard app is switching to subscriptions.
Keeping low overhead is a valuable thing.
The problem is Apple has been slow to support different business models for app developers. Currently subscription is the sweet spot for a lot of apps. Apple could change that if they wanted to.
That’s a great point! I’ve certainly run into the limits of my payment provider before, and the path they optimize for is the path of least resistance. I can see how Apple may be motivated to encourage subscriptions.
I think if you're going to ask for a monthly subscription, you have to provide value on a monthly basis. That's the gift and curse of this model, that you're demanding constant reinforcement for the product. Especially in a Netflixian environment where it's cheap and easy to turn off and on. See this article:
Disney+, HBO Max and Other Streamers Get Waves of Subscribers From Must-See Content. Keeping Them Is Hard. https://www.wsj.com/articles/streaming-data-netflix-hbo-disney-hulu-11643560207
I often wonder why more people don't ask annual subscriptions. $60 a year is a one-time conversion and a once-a-year decision. $5 a month is 12 instances in the year where they see their credit card and question why they have this service.
That’s true. And very few apps actually resolve this promise.
For the few apps that I am forced to subscribe to, I always choose the annual option. Sometimes, they have substantial discounts. I think the pricing there could depend on their user churn.
I find that they prevent people from canceling after the free trial by releasing their shows on a weekly schedule. Even then, there’s usually a spike in cancellations after the popular series end.
Not sure about "The Future" but interesting read.
That’s fair—glad you enjoyed the read and the poll!
Original Comment
Thanks! I find there’s a lot of products masquerading as subscriptions that don’t need to be.
Really depends. If I only have a database at $15/mo and bucket storage at $5 TB (not GB) per month, then having both subscription options and lifetime deals are doable. Even long-running processes cost me $1 for 1000 jobs. I don’t think an app should suddenly become subscription based just because they put a little data in the cloud. Another option is just disabling expensive features if a subscription is paused.
Of course, truly non-negligible costs need to be funded, and subscriptions are just one way of doing that. There are other options, such as usage based pricing (pay as you go, volume pricing), permissions that restrict certain features like the Agenda app, etc.
I too feel the same but I've found the evidence to be quite contrary. If subscriptions didn't go well, how do we have bootstrapped ventures crossing $5k+ MRR?
Am I missing something here?
There is one good implementation of the software subscription strategy: you receive software updates while your subscription is active. If you stop your subscription - you can fall back to the version that was active during your subscription.
This won't work for SaaS, mostly only for desktop applications.
JetBrains implements this strategy for its IDEs and I like it a lot.
Oh yeah, I really like how JetBrains implements that strategy too. I think having updates while your subscription is active and keeping the last paid version is very fair.
I offer a lifetime plan for this reason. That said, most people don't want to pony up for the lifetime cost. Subscriptions are popular for a reason.
It’s always great to have both options, like you already do 😄
I’ve seen your product before on ProductHunt actually. You didn’t have enough marketing materials for me to really evaluate your product without signing up. I’d love to see more of a landing page, feature pages, an article or two that mirrors content I’d find in the course, and maybe a long-form customer testimonial story. I always look at apps if signups aren’t required, could be a nice option if you had a module or two you didn’t mind using for totally public previews. I purchase tons of educational content and take many courses, so I was curious. Anyway, feel free to take or leave those suggestions.
I'm not clear why you have subscription fatigue. What specific things make you frustrated?
Whenever I think see LTD's I think that the value is low and that the product won't be developed/improved long term.
What I love about subscriptions
What I hate are
All of these things that I hate can be improved/fixed.
Also, about Adobe...I agree that it's too expensive for most individuals.
Subscription fatigue is defined as:
I have noticed over the past decade or so, more and more apps are moving to subscriptions. They are charging me an increased recurring price for software I no longer own but rent—that’s important! Insult is added to injury when the product doesn’t actually improve or the subscription is actually a worse deal than what you had originally.
I disagree that subscriptions have the exclusive benefits of free trials and scalable plans. Many other pricing strategies include free trials. As for pay for use and scalable plans, I find that subscriptions do not fit my own needs, especially on the low use end or hobby side of the spectrum.
For B2B, subscriptions are good for businesses and can scale by users or resource usage. For me, B2C is a different story.
There is an inherent risk to purchasing LTD’s from startups. It’s not for everyone, but I prefer it. Alternatives like a year of updates (and still owning the software), major versions, etc. are much better for me as a consumer too.
Yes, agreed.
As a consumer, I tend to prefer yearly subscriptions/licenses for software and monthly or payg for content.
On a current project we're planning to do yearly-only pricing. This post and the conversation is making me consider the value of offering auto-renewal as an option in the subscription process rather than just how it is. It seems like a worse decision business-wise, but perhaps more friendly to the consumer. In a perfect world, my software would earn it's renewal every year :)
I wrote this in another comment, but to me, there’s a big difference to me between saying “Here’s a feature filled update, wouldn’t you like to buy it?” and “We’ve added new features, and if you stop paying us you lose all access”.
I often pay for years of updates like subscriptions. Many apps earn it time and time again. I just purchased another year of https://devutils.app/ yesterday. Sometimes I don’t have the need or budget to update now, but assuming I keep using the app from time to time, I’ll be back before you know it.
It actually makes me trust the business more, prevents accidental renewals/refunds, and it goes great when you let users keep what you already have (the last update you own or the content you already downloaded). Just because I’m not autorenewed doesn’t mean I won’t subscribe again if I like the product or company.
As a super late millennial/early Gen Z-er, I've always assumed the subscription model was an option, not the ownership one. It drives me crazy when there isn't a subscription model because it feels like it's to intentionally keep the product out of reach for beginners/those just starting out.
To that point, I've been a solopreneur for just a few months and keeping my costs as low as possible is the name of my game. I routinely cull subscriptions and compare products.
I also frequently end up "inheriting" software from clients and sometimes like it better than what I'm using and switch.
I would consider myself an early adopter too, and would much prefer the option to switch to an up-and-coming (often indiehacker!) product over the more established one I've been using. I couldn't justify that kind of expense if I'd paid for it as a lifetime option.
I noticed a lot of comments referencing Adobe - I think it's overpriced regardless of lifetime or monthly options and hate paying for it, so I will definitely be looking into Affinity!
That’s what educational discounts are for! And I don’t think it needs to be an either/or case. Think about instruments—you can rent them for a semester or buy them forever. The goal isn’t one or the other, it’s both.
In my opinion, for affordability, subscriptions are the most expensive option for consumers, both in cost over time and value lost when unsubscribing. Reminds me of the boot analogy and the difference between owning vs renting a home.
You make good points for subscriptions, like @dock90 Personally, I still think a year of updates is superior than pure subscriptions for app in most cases
Affinity is great! They have the only good alternative for Adobe InDesign and I really like how their apps can all be used together—incredible really.
I wish they did startup discounts for some products too (I know a few like Notion do)!
I'm several years out of school, so there are far fewer discounts.
I agree with you on the boots analogy, and in the rest of my life I am much more of a "pay upfront" kind of person.
Once I have the cash to support it, if there was an App I LOVED - and I knew there wouldn't be variable pricing (I'm hoping to add 3-5 teammates in the next month) I would pay annually just to avoid the monthly budgeting headaches.
That hurt me too! I think the startup discounts are a nice movement.
Good to hear! Are you a saver or a spender? I think some things take investments to pay dividends, like indiehacking or boots.
Hate to break it to you, but B2B is a very different world than B2C. I find that pricing is solely subscription based and premium at that.
I'm a bit of both, but I don't like debt and do zero-based budgeting, so any big purchase I pay for upfront, including my car or any technology.
Oh I know! That was just my pipedream.
Pay per use makes sense. Just recently spent $300 for trends.vc, there is no option for monthly subscription. There is no way for me to decide if I really need it for the entire year. Now I cannot get any refund.
Yeah, I like pay per use. Great for web hosting, databases, etc.
RIP
Good one.
Thanks! I wrote the post’s tone to make some conversation, and it’s been pretty fun. I’ve responded to just about every comment, and there’s some nice insights. Poll results are fun too. Most of the time, I only comment or my posts float into the void, so I enjoy the change of pace.
When I relaunched Wicked Templates i was looking forward to have a subscription base SAAS, but after a while.... I was fadeing out of the idea, because to me, subscriptions are not for everyone....
It was a good post, that's for sure.
It worked out for me 😄 I was able to trade you detailed design feedback for an LTD hahaha
I originally purchased Wicked Templates because it was a nice one-time purchase
Yeah, so worth it. It was an exchange of LTD's
😁
I feel really torn about this one because I understand the subscription model works better for a lot of products and services. As a user, I find it annoying and, at times, almost fraudulent. I do miss LTDs, but any product's LTV would be marginal as it would be a one-off transaction.
Any thoughts on how to balance this? (I work for a company that's more or less on-demand...)
That’s how I feel about my clipboard app, which changed to subscriptions without any new features.
I love LTDs, but they may not work in every case. They could be valuable for getting revenue fast, catering towards customers who wouldn’t purchase otherwise, monetizing users who would otherwise churn earlier, etc.
There are other options like a year of updates, which has many of the revenue benefits of a subscription, without leaving the user in the cold when parting ways. Usually I only have a temporary gap between upgrades, and letting me keep and use the software I’ve already paid for really incentivizes me to return.
I think on-demand/quotas/usage based pricing is usually pretty fair, unless there’s a big markup between different tiers.
I kind of agree but also struggle with this. As an indie hacker, I have mostly only the core functionality to offer and it's also what I want to test if it sells. Why would I give away my core feature for free and charge for less valuable addons?
My thoughts on MVPs are different post 😂
I think there’s options. If you are selling web hosting, you can limit the number of websites. If you are selling a design app, you can let users keep the designs they made during the subscription. It just really depends on the product—I couldn’t find your app, so it’s hard for me to make a suggestion for your particular case. There’s usually some room for flexibility.
I recently started up in the web hosting market, aiming for the small uk based business with a LTD on wordpress hosting.
My logic was to charge enough to cover a monthly fee for between 2 and 3 years hosting, then after that they can clearly save money. If they leave after that there is no vendor lock in to worry about.
As I am a developer by trade I can then offer value add services, independently of the hosting to try to bring in extra revenue. Those not wanting it are free to skip them but they tie in nicely with main hosting offering.
As the platform itself is managed by another provider (I just resell) they have the work to improve and add features over time which means I can offer a lower price point.
However after reading the mixed views on LTD what would your / others thoughts be on that?
That’s an interesting thought! I have seen companies that offer an LTD later try to get me to pay for additional features. It’s okay as long as it’s clearly differentiated enough; sometimes it should clearly belong with the LTD. E.g. a backup system sounds like an addon, while an automatic updater does not.
VPNs, Backups/File hosting, and others have used an LTD strategy, so I can see it. Though, in your case, I think usage-based or subscription prices are viable too.
Recently, I investigated tons of WP hosting options. What I actually want is something that will just automatically take care of upgrades for me without an additional subscription. I’d pay for an LTD for a Wordpress/server update manager. Currently, I decided to minimize my costs by hosting on Digital Ocean, using an Ubuntu package like
unattended-upgrades, and enabling all Wordpress automatic updates. We’ll see how it goes.With some products like stuff i install on my machine (e.g. commander one, etc...) i prefer LTD. With stuff online i prefer subscription because it is more likely to survive and that my payments assure me that they take me seriously every single payment period. Moreover, i get updates and be supported properly for each new update. LTD online are a false profit. I already got several like those disappear.
I also purchased the LTD for Commander One, nice! Definitely prefer LTD for apps.
I have mixed views about the online stuff. But, because I’m a dev building my own apps, almost everything I’ve made can live online for cheap—if not free.
I can see how an app can be built on several more expensive hosting options and shut down due to lack of customers. I can’t find the article, but I remember a fellow indiehacker who was able to gut costs to keep their app online.
Since LTDs are usually a limited time or build in the cost of multiple years of subscriptions, I find that they do pretty well, especially combined with subscription revenue options. I like having both.
There is a place for LTD to raise cash like in appsumo. But i don't see it as a long term solution. People who buy LTD are usually early adopters at a risky time of the app. After the app stabilizes it is more logical to take that into account essentially subscription is the correct value when there is no more risk i believe.
Subscriptions seem to be better on the face of it for many business owners. After they reach a certain threshold, they can charge whatever they want and experiment to find what makes then the most revenue.
Though, the higher subscription prices and lack of ownership pushed many users away from Adobe to their competitor Affinity. It also encourages competitors in the hobbist space.
Plus, I have also seen switch to subscription backfire on multiple occasions. Some apps just take the heat and users vote with their feet, while others have actually reversed the change. I have and will continue to “I put my money where my mouth is”.
I think that adobe is a special case. If you have never owned adobe products and their initial offering would have been a subscription i think we wouldn't be having that conversation. I completely understand the frustration since a superior product was replaced by something that feels more like a greedy move. That also happens when SaaS products raise prices to existing customers which i am completely against unless really problematic and unsupportable model. If you take LTD after you don't need to raise cash you will be leaving money on the table and frankly i personally believe you are at a risky stage where usually other companies raise funds to survive even though you are really not. Why on earth you would like to be at that position. As an alternative i can suggest 1, 2 maybe 3 year commitments.
I wish it were a special case, but so many apps are switching to subscriptions. Quite common nowadays. It’s still frustrating no matter how many of them try it, especially when they don’t add any new features.
I don’t even consider apps today that are pure subscription only. I vote with my feet, and will support their competitors. I think it’s helped alternatives like Affinity succeed. There are so many other pricing strategies that are better for customers like me.
In my mind, that’s what in LTD is—a bet that I’ll still use your product and you’ll still be around in X years. Generally LTDs outside of AppSumo are priced as multiyear commitments. LTDs are valuable for getting revenue fast, catering towards customers who wouldn’t purchase a subscription, monetizing users who would otherwise churn earlier, etc.
I like the option, but it’s certainly not for everyone. There are plenty of options besides an LTD that are still decent alternatives, like pay per major version, year of updates, etc.
I think this was a good conversation. Something to think about. Thanks.
I enjoyed it—thanks for jumping in with your opinions! After reading many comments, it’s nice to see so many insights here worth thinking about
Can not answer "yes" or "no" because my preference depends on the way the service is.
I am happy about most subscriptions since they give me flat-rate access.
The only annoying thing is unfair cancellation and when you stop owning things after the subscription.
In many cases, it's comfortable to have subscriptions if the process around it is smooth.
Not owing too many subscriptions as a person is a different thing.
One of my biggest pain points! That’s why another pricing strategy like paying for a year of updates you can keep is so much better than a subscription.
Personally I don't mind the idea of subscriptions, and prefer it to paying upfront for yearly updates - it's more the mental load of thinking "I need to remember to cancel this" I really dislike
I like the option where you pay for a year at a time without the autorenew, like https://www.mockupcloud.com/subscription and you get to keep lifetime access to your downloads. I think it’s a pretty fair compromise. To me, that’s substantially different than a subscription which autorenews and doesn’t leave you with anything.
Would it be interesting to you to have an app that automatically handles subscription etc.?
Yes and no. It could be nice, but I’m not sure if I would let it have access to my bank account. Another alternative is creating multiple digital cards like https://privacy.com/ and https://getdivvy.com/
Fair points.
But pricing is also a filtering mechanism. If you don’t like the pricing, chances are that the creators wouldn’t want you either.
My friend says you’re right—they don’t want me as a user 😂 they only want the rich hobbyists
Hahaha fair point. I think @ebakken’s comment that many “are a good deal for the superuser and not the hobbyist” summarizes my feeling on it. I wish it didn’t have to be that way.
How about coupling those paid options you mention (lifetime license option, charge per major version, a year of updates, permanently unlock features) with a payment plan that is broken up into 2/3/4 smaller payments (with 0% interest charged), to get the customer over the hurdle of paying a high up-front fee?
I’ve seen stuff like that, and I don’t see why not. Reminds me of a lot of buy now, pay later options that I’ve seen in retail. Personally, I’ve only seen it in the wild when the software or course is several hundred dollars. When they offer those options, I usually just pay once in cold hard cash anyway.
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Hahaha thanks!! I enjoyed seeing the results. I was the opposite—I expected subscriptions to have fewer votes than it ended up with.