Re:Tell HN: A Conversation Needs to Be Had over Subscription...
by Macha on Friday January 21, 2022 @08:36AM
(#30023255)
> That assumes what the initial price wasn't at least x20, though.
Yes, I assume this is true because these companies were profitable businesses charging 2x annual, not 20x, before the move to subscription models. Requiring 20 years of subscription to profit sounds highly risky and not all the kind of thing investors would support.
> Even if it does wipe out their margin from the upfront €100 cost.
That assumes what the initial price wasn't at least x20, though.
> splitting the old upfront price as if customers were on a 2 year upgrade cycle rather than 5.
It is also about perceived cost and maintenance costs: you can charge $10/y but ~$3 from this sum would go to fees and taxes, and you still need a profit margin and sustainability margin for the future growth (and recession) and to be able to give out refunds.