Why not deliver this as a desktop application that users download and pay for one-time? There’s absolutely no need for an ongoing subscription to a backend service here. Outside of rent-seeking.
1. It still provides more value than the monthly subscription.
2. People have shown a greater willingness to pay for ongoing features and support in a SAAS model than in other formats.
3. It better aligns with the costs of support and maintenance that the provider needs to provide.
4. It's less risky for the consumer to get started.
5. There's no piracy or people decompiling your app and putting it out under their own name.
6. No updates to fiddle with and works across machines.
Not all answers above directly apply to the podcast->video service here but these are the general reasons.
Pretty crazy when you see your own app on torrent sites.
Not all problems are workable within that constraint.
Can you share some examples of how you've furthered humanity while living for free?
I've spent a lot of time on my app and I still had to pay people to help do the app.
The best thing you can do is identify them and segment them into beta / test updates for experimental features which you wouldn’t test on paying users.
1, 4, and 6 align with the customer. 4 could be alleviated even with a local application a la Sublime Text. I concede 6 is marginally easier to manage, but then again represents a con from the customer perspective in that the software they’re using could disappear at any time since they don’t own it.
JetBrains model seems to represent the best compromise to the customer here: subscription fee for constant updates and support, cancel anytime and keep your current version with no updates or support.
2, 3, 5 benefit the business, not the customer. In fact 3 is probably the most beneficial to the business in that cost of support and maintenance isn’t aligned, they’re decoupled! Hence the 70-80% margins this company is touting.
5 is brutal as csallen said, but then again there are counterpoints to this in that people will certainly pay and not pirate for the right experience: iTunes, Kindle, etc. even when the pirated versions are readily available.
I appreciate your response.
I'm simply wondering if there's a "your margin is my opportunity" play here where a company could devour SaaS companies by changing the distribution model. That's all. This thought has been banging around in my head for the past couple years due to a few data points, but I haven't had time to formally test the hypothesis.
That's all it is: a hypothesis that there's an opportunity here to change the distribution model to one that focuses on the customer and destroy a large number of SaaS models.
Microsoft Office, for example. $250 license cost every three years, or $99/year for the SaaS model. If you want to try it, you pay $10 for a month and if you don't like it you lost $10 rather than $250. And if you subscribe long term, the SaaS version's pricing is very much on par with the old style of selling software.
The alternative is the company going out of business and not providing the product or the company’s founders getting acqui-hired followed by a final “Our Amazing Journey” blog post before the product is cancelled.
I never said anything to the contrary?
Renting is often exactly what businesses want to do. They have better uses for their money than pre-purchasing all of their future expenses. They rent office space, lease cars, pay salaries fortnightly instead of at the start of the year, pay for their inventory not only as they receive it rather than in advance, but often on terms of credit. Software doesn't have a reason to be an exception to this. If I can pay $X now or $X spread over a number of years, I'm going to pick the latter.
The payment terms of a product are effectively part of the product itself. I'm in sales and I've won and lost deals against comparatively priced competitors on the basis that my/their pricing schedule better matched what the prospect wanted.
I took renting to mean just ongoing payments by the way. If you meant rent seeking as in the concept in economics then 1. this isn't it and 2. using IP law to prop up the value of locally installable software would be a closer example of it than doing so by keeping some of the code under your own control is.
The choice is between maintaining 2 mobile apps + a desktop app that is compatible with macOS and Windows and maintaining a single webapp.
That's the opposite of rent-seeking, that's .. charging money for a service.
I'm happy to do a free trial, and have it instantly accessible on all my devices that have a browser and etc.
Because when given the option, sellers usually choose more money than less money.
Anyone is welcome to create a competing product and take their margins.
The one time purchase could have been, let's say, $20, but if I want to use it a couple of times, paying $5 per month might be a better deal. And you're always getting the latest version
Your second (main?) point: "no need" / "rent-seeking" is addressed well by michaelbuckbee, particularly point #5.
Also maybe there could be automation with this service that saves time?
What you're proposing with the one-time upfront fee model is to compete on price, so smart entrepreneurs steer clear of that model.