It's not the negligible amount of money that matters. The trick is that at the end of your yearly subscription you have already upgraded to a newer version, so falling back to the perpetual license means downgrading, which is both often a practical problem and (perhaps most importantly) something that I think many have an emotional aversion to.

I'm pretty sure that if the fallback license was to the most recent version you're entitled to during your subscription way more people would take leaps between the end of a subscription and the start of the next one (though Jetbrains offers you a further discount if you don't do so).

> falling back to the perpetual license means downgrading, which is [...] something that I think many have an emotional aversion to.

They're playing on loss aversion and the endowment effect. It feels worse to lose something than to never have it, so people are more willing to pay to keep it than they would be to pay to buy it if they were never given it in the first place.

https://en.wikipedia.org/wiki/Loss_aversion

That makes sense, thanks.

In the end, though, when I discovered this was how it worked at the end of my PyCharm subscription, it left me quite a bitter taste in my mouth, and I just stopped purchasing any JetBrains products. These kind of details are akin to trying to trick people via putting stuff into EULAs nobody reads, and for me at least, it gives the distinct feeling that they're trying very hard to screw me over, so I try to not frequent nor support those kinds of businesses, IMHO.

So, is what they are doing worse than what most subscription models do (lose complete access)?

I've been using them for awhile and I felt they were really up front about what they were doing, but I don't know if they've always been as transparent.

Jetbrains actually wanted to cut off access completely at first.

Initially JetBrains didn't even want to offer rollback licenses when they went to subscription only model a few years ago.

There was a big uproar among programmer communities (including here on HN) and after few weeks of deliberation a compromise of sorts was reached.

Despite offering a nice product line, JetBrains did lose a bunch of goodwill including mine. But goodwill does not pay the bills.

It's definitely better than that. But it's still not good. This is all my personal opinion though, I already voted with my wallet by not buying their products any more.

Would it have been better if you "purchase the current version and get temporary upgrades for a year for free." Essentially the same thing, but up front and not implying that you get more than you do.

It'll be the same only if at the end of the year your version is rolledback.

I think this:

> The trick is that at the end of your yearly subscription you have already upgraded to a newer version, so falling back to the perpetual license means downgrading, which is both often a practical problem and (perhaps most importantly) something that I think many have an emotional aversion to.

Qualifies as

> a particularly hamfisted attempt to grab an almost negligible amount of money

OK, so maybe it's not as negligible an amount but it feels petty and I'd not pay money to a company that pulls stunts like that on its customers.

Why should it work that way? You get the updates based on the assumption you are a subscriber, and you get the fallback license based on the assumption that you made a one off purchase at the date of purchase. It's logical the way it works.

It doesn't for the simple reason that they provide updates for the entire year. Surely those updates aren't provided for free. They are provided for purchase you made in advance for a year. If I cancel midway I should be entitled for all the updates till the end of the period. Unless those updates were free and not part of the sale. In which case, the licensee should still get those updates anyways for the period. You look at it either way it still doesn't make any sense. Or, they should return the update fee they charged for the year during the sale on pro-rata basis.

Also, how would you account for it? You can't retrospectively change the nature of purchase from subscription to a one-off sale! That would be audit hell for their accountant.

They sell you version at the time of purchase (fallback license) + access to updates, all accounted at the date of purchase. So when your subscription runs out in theory you could get old version then apply updates but you have no access so no updates for you.

> then apply updates but you have no access so no updates for you.

But that is denial of service that I legitimately paid for. Either they should provide the updates till end of subscription or refund the collected update fees pro-rata (viz. if I cancel after 9 months of purchase, 3 months of excess update fee collected should be refunded).

My sense is you paid for the software as it is on the date of purchase.

With that you get a trial of all updates for a year. If you don’t like the trial you don’t pay and revert to the version you paid for.

Yes it's possible to think of it that way and it makes sense now! However, they should explicitly mention it in their license terms that the updates are provided on trial basis and valid for a year and those updates can be purchased as a version upgrade at the end of the year.

It makes sense to me as removing the choice between, "Do I buy one-off license or a subscription?" If you get the subscription, you get a free one-off license at date of purchase.

Your way also makes sense, but they both seem reasonable to me. And I don't really care much, in that I renew when I'm regularly using their product, as I want to support them. If I just had to open an old project for something, then I don't mind exactly which old version I'm using. (And if I somehow did, I could just put it in 30-day trial mode.)

And at least the way I use it, there's no lock-in. If you stop subscribing, you can easily open your code in another editor.

Slightly off topic, but semi related. My parents had a one year membership at Costco. The level where you get some percentage back. I think it was 2%.

Long to short, the "rebate" was paid ~60 days prior to the end of the 12 months. The remaining 60 days' purchased will only be rebated if they renew.

I presume this is in the small print somewhere. None the less, it's complete crap.

Sounds similar to employers who pay contracted bonuses late, don't pay if you quit before the bonus date, and use bonuses to make up for reduced salaries.

This is really annoying for me, how can I work for a full financial year (and get my shares allocated), receive my performance review but not get a bonus because I quit before October where they pay the bonuses on the last FY?

Hence the wave of resignations the week of bonus payouts. People play the game and wait to get paid, knowing if they prematurely signal their departure, the company will reallocate money to those who choose to stay. I'm not saying it's right but it happens.

And then you only get half a bonus at your new role if you are lucky (my last job I joined 3 days too late to be eligible)

That's strange, as that was not my experience not long ago. I'm thinking there was some miscommunication about the rebate with your family.

I received my rebate after I had let my membership lapse without any issue. You can use the rebate even without an active membership. You can even walk up to the customer service counter and get your rebate amount in cash if you want. I ended up getting pizza and took the rest as cash back.

  You can even walk up to the customer service counter and get your rebate amount in cash if you want.

Here, cashing out is the only way they redeem the vouchers unless it's a really high amount (4 figures+), in which case they cut you a company check (that happened to me once in 6+ years).

Thanks. I'll report back to The 'Rents.

Actually, I might have been an edge case and not representative of their normal rules.

"The Reward is issued approximately 3 months prior to the member’s renewal date in a Renewal Statement and reflects rewards earned up until the issue date. A member must be an active, paid Executive Member when the Reward is earned and issued to receive the Reward. To receive a refund for the Executive upgrade fee the membership must be canceled or downgraded to a Gold Star or Business Membership and any 2% Reward issued or accrued will be forfeited. Any additional savings and services exclusively for Executive Members will be rescinded." https://www.costco.com/executive-rewards.html

It's not "complete crap" given that (a) it's in the paperwork they are given at signup time, and (b) if they are genuinely dissatisfied, they can downgrade back to basic membership and get refunded retroactively to the start of the membership year for the difference in cost of the higher membership.

A year is a year. It's crap, and shows the brand lacks class and respect. Who would renew for a bunch of a-holes?

Wait, so if I've paid the subscription fee for 2 years I get the one at the start of the subscription period?

Some lag from the latest version seems fair, e.g. 6 months before the latest major version is perpetual...

You're in luck. You get the version 12 months before the subscription ended, so the version released before the 1 year mark.

> One thing that always rubbed me wrong about this is that, logically speaking, if you buy a license for a year, the perpetual fallback license should be the version you had at the end of the license, not the one that was on the market at the beginning of it. It doesn't really make sense the way they do it, and it feels like a particularly hamfisted attempt to grab an almost negligible amount of money, so I'm puzzled.

You are absolutely right! That's exactly how it should work but it's surprising that they don't do it that way. I can give you an explanation from accounting perspective: When the sale happens, the accountant would record the sale in their Books of Account as "Unearned/Prepaid Revenue" (as a liability). It makes sense as you have taken money "in advance" for a sale but haven't delivered the updates yet and hence you cannot claim it as Income. Every time you put out an update, you can claim a portion of the "Unearned/Prepaid Revenue" as "Revenue" and push it from liability to "Retained earnings" account as Income. When the year expires (note that the year is for the user not the financial year) the accountant would claim the remaining Unearned/Prepaid Revenue as Revenue/Income.

I wonder how they manage their Books of Accounts if they have defined that the license falls back to the earlier version. What they are doing doesn't make sense from an accounting perspective as well!

I'm not an accountant but presumably you treat it the same as the fairly common purchase+service contract. You have a sale of a license (of the version at time of purchase) and the prepaid service contract that either converts to revenue over time, or, if non-refundable, converts to revenue immediately. The proportion between the two components is fairly arbitrary. There is no constraint on how they implement this from an accounting perspective - they can change to allowing the user to keep the latest version they upgraded to without serious consequence (you can just as easily sell "product version X with one year of updates" which is very common as well, and mark that as revenue right away).

> I'm not an accountant but presumably you treat it the same as the fairly common purchase+service contract

I'm not a certified accountant either but I took the course just to understand workings of my business.

> they can change to allowing the user to keep the latest version they upgraded to without serious consequence

It'll be in their best interests if they did.

> you can just as easily sell "product version X with one year of updates" which is very common as well, and mark that as revenue right away

You definitely can. But you end up overstating your revenue and in turn your profits. The downside to that is you end up paying high taxes (unless you can minimize your profit by showing a ton of expenses as well). If it was instead treated as Unearned Revenue (which is a liability), you would be stating your true income and showing lower profits and thereby paying lower taxes.

Take for instance the case where your customer purchases a multi-year subscription. This causes a higher cash flow (assets go up) but you won't be overstating your income (as liability goes up by classifying it as Unearned Revenue instead of owner's equity). The liability can be reduced by claiming it as revenue over a multi-year period. If it was marked as revenue at the time of sale, the owner's equity (retained earnings) would go up. That would mean showing higher income which results in higher profits and you end up paying high taxes.

Remember that with unearned revenue you can carry it over to multiple financial years and spread your income between them. You lose out on this important tax saving component if you mark as revenue right away. This also has the advantage of portraying a true picture of your business in your books of accounts.

I think the solution is delayed gratification

Don't upgrade until after renewing the subscription for next year.

so you miss out on the new features/bugfixes (which you presumably want, since you are paying already).