Comment by hayst4ck | Hacker News Reader

Comment by hayst4ck | Hacker News Reader

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I see both sides. This dilemma is capitalist hell.

Why is obdev sku-ifying their product? Because the incentive model for selling a license means that the market can saturate and there is a lack of recurring or stable income/income safety for the dev. In order to get new spikes of income, a new product is generated. If the market for a particular license becomes saturated, how will they make more money?

Licensed based sales incentivizes creation of new product and disincentivizes incremental improvements on already complete products.

On the other hand, subscription models incentivize rent seeking. If money is coming in, there is no reason to do more work. Income is not dependent in any way for work done, except maybe compatibility adjustments.

So a license is a wonderful model for the buyer and not so great for the seller. A subscription is awful for the buyer, but too good for the seller.

So what kind of payment method/pricing scheme, keeps the developer engaged in improving the product, but doesn't incentivize rent-seeking?

How would you price things if you were the seller?

A subscription model is not rent seeking. Most developers continue to work on their products and continue to provide customer support etc. If they don’t, you can simply stop paying your subscription.

The lifetime value per customer isn’t infinite either. Most people don’t use a single software forever. A subscription kinda slices the LTV up and puts a premium on it for long-term users. It is an increase in price, hence every company loves it, but this isn’t rent-seeking.

> If they don’t, you can simply stop paying your subscription.

No, you cannot, because you completely lose access to the app. If it outputs a proprietary file format (e.g. Adobe apps), your data becomes hostage to the subscription even if you do not need new features, can no longer afford the price, or the developer changes the terms.

Subscriptions take away control from users.

I didn't say it is rent seeking, I said it incentivizes rent seeking. It incentivizes taking money without creation of new value. Subscriptions weaken the relationship between receiving money and creation of value. Money is received whether value is created or not.

You can look at the app store to see all kinds of rent-seekers, so it is happening. Not all subscriptions are rent seeking, but I have a hard time imagining how someone would rent seek without charging via subscription.

>So what kind of payment method/pricing scheme, keeps the developer engaged in improving the product, but doesn't incentivize rent-seeking?

We had that. And it worked for decades. Paid major updates. Users got support and bug fixes for their paid version and devs were hell motivated to add new features for the next update.

Jetbrains' model?

If anyone else was wondering what the model was:

https://www.jetbrains.com/store/#personal?billing=monthly

https://sales.jetbrains.com/hc/en-gb/articles/207240845-What...

Perpetual fallback license means that if you stop paying for a subscription, you can keep using the version you are on, in perpetuity.

Sounds fairly reasonable. If there are no updates, you would cancel your subscription and use the fallback license until the "rent-seeking" stops.

I'm not sure if the Jetbrains model backfired with the Ukraine war, considering most of the dev team was Russian and they decided to close the Russian offices.

I remember that the launch of the 2022 versions had a drop in quality, I don't remember when was the last time I had crashes in a Jetbrains product, but with the launch of 2022 versions crashes occurred on a daily basis to the point I really considered cancelling my subscription, and I activated for the first time the option to block updates in Jetbrains Toolbox.

Months later they launched their promotion to keep the current pricing for 3 more years and I renewed. I acknowledge that promotion was a genius move by them, but I'm unsure if that promotion was a result of a drop in income for them.

Such a bummer. Their business model wasn't war-proof. Back to the drawing board, I guess.

"I see both sides. This dilemma is capitalist hell."

It seems simple to just offer a few different pricing models and let users choose which suits them.

Why not offer both a recurring subscription and a lifetime option ?

Not only do you satisfy both preferences but you leave the lifetime option on the table, for future uptake, from all of the recurring customers.

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