I pay $10/mo to Netflix, and probably will do for the rest of my life (or theirs). I pay $10/mo to Spotify, and probably will do for the rest of my life (or theirs).

I paid for Tinder for three months, got a girlfriend, stopped paying them, and hope to never pay them ever again.

That's at least one of the reasons they're more expensive.

The price you sell something for has absolutely nothing to do with the cost of goods sold, other than it's the lower bound of you (eventually) going out of business.

That something cost me $10 to build does not mean I mark it up 30% and say job well done. It means I charge $50 if the market will pay it.

? The COGS for most software approaches 0 pretty rapidly, so it's just as arbitrary that Spotify charges $10/month for a premium subscription.

The price of software (and any good, theoretically) is rarely priced based on expenses.

Both Spotify and Netflix have to pay a large chunk of that to the copyright holders.

The cost of media services isn't mostly infrastructure; its licensing. When you play a song, they have to pay a certain amount to the rights holders. So they need to figure out the average listening habits across all their listeners then price their subscriptions so that they can pay licensing fees and make profit.

Tinder has no licensing to pay.

You’re confusing cost plus pricing with value based pricing.

Answer this question, “How much is it worth to you the customer to be able to...” and that’s probably how they got to $20/month.

I really don't think its that simple. There's a pricing problem with SaaS products like Tinder which suggests that more people will pay if it is cheaper. And with Tinder Plus, they offer literally nothing different that would cost Tinder much more money; it just allows users to use the app more.

The problem with $20/mo is that its entering exploitation territory. Like a porn site subscription, it exploits chemical and physical addictions intrinsic to humans to derive revenue. You can say the same thing about, say, any addictive service (like Netflix) and you wouldn't be wrong. But at least Netflix prices at cost, not "value", and Tinder is literally playing with a biological drive and interpersonal relationships, not a simple dopamine addiction.

>But at least Netflix prices at cost

This must explain their terrible earnings and stock performance over the past decade or so.

What makes you think Netflix prices at cost?

They definitely price below cost right now, given their financial performance. But they're raising prices literally right now; they're working on averaging up the amount customers pay without shocking customers to better reflect the cost of their services.

In other words; a business fundamentally cannot price all of their customers below cost indefinitely, and Netflix is working in the right direction. On the other hand, you can price customers above cost if demand is there, and demand for Tinder is there because their business model relies on exploiting biological addictions in our brains.

Netflix does not price at cost.

Tinder is selling ass, and product over 30 years old is harder to move, and more motivated, so they charge more for it.

Tinder depends on both network effects to become a market leader and overall gender asymmetry to create a network that is very valuable to those who are looking for a match. Those other examples may use network effects, but they don't exploit the overall gender asymmetry to the same extent, making the comparison between the services weak. It's fine if you disagree, but to many people, that $20/month may be worth it if it improves their odds of finding someone.

You’re assuming pricing should be based on cost, but there’s no reason that has to be/should be the case.

Yes! You got it right!

Different products with different purposes are priced differently! And just because a product is inexpensive to produce doesn’t mean it’s price has to be low—- especially if a lot of people want it.

> Netflix can deliver unlimited views of thousands of tv shows and movies for $10/mo

You're valuing the service that Tinder is providing in the wrong way. Netflix is offering you the ability to watch movies on demand. Tinder is offering you the ability to get laid.

The fact that Tinder is only $10 more than Netflix is the bit that's amazing.

They seem to have real problems delivering messages to users and alerting users when they have a message. Apparently these are unsolved problems.

I don't think the fee is about what they deliver to their users. It's about what they deter.

That's not how economics works.

netflix and a blanket, much cheaper than a date. or the prospect of a date.