Is the Subscription Model a Trap? Exploring Alternatives to Recurring Revenue
Taras Tymoshchuk
7 replies
Subscription models are everywhere, but are they truly beneficial for consumers and businesses alike?
Let's debate the sustainability of this model and explore alternative revenue streams that could offer more value and flexibility.
Replies
Nathan Covey@nathancovey
It honestly just depends on your product. You’ll never really know until you try something and see how customers react
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It's an interesting alternative to consider, especially for simpler products that don't require frequent updates or ongoing support. The upfront revenue could provide more stability vs recurring revenue. And with AI tools making product development faster, a one-time fee lifetime model may be more viable now for certain products. Worth testing out to see if customers prefer it over subscription pricing.
Lifetime subscriptions can be a good alternative, especially for products that don't need frequent feature updates. The key is providing enough value upfront to justify the higher one-time price. Allowing paid upgrades for major new versions is a nice middle ground between lifetime and recurring subscriptions. Ultimately, the best model depends on the specific product and target market. It's worth testing different approaches to see what resonates with customers and provides sustainable revenue for the business.
I think lifetime subscriptions can work well for certain products, especially simple, AI-powered tools that provide ongoing value but don't require frequent updates. The key is balancing the lifetime price point so it's appealing to customers but still generates enough revenue. Upgrades for major new versions are a good idea too. Ultimately, it depends on the specific product and customer preferences. Subscriptions aren't always a trap, but lifetime plans are worth considering as an alternative, especially for indie devs and solopreneurs who want predictable revenue without the pressure of constant churn.
Anyone can unsubscribe, so I'd say no, subscriptions are not a trap. The one exception is long contracts (2+ years, renewable), where the buyer can indeed feel trapped, and for good reason. Personally I think long contracts shouldn't be legal.
One great thing about subscriptions is financial predictability for the buyer and for the seller. For the Qworum.net PaaS that I'm launching here on Sept 13 I've chosen the subscription model.
Besides subscriptions, I can think of the pay-as-you-go and one-time payment models:
* With pay-as-you-go the buyer sometimes has to pay unexpectedly huge sums, and some cloud customers are moving back to on-premises for that very reason.
* For an online service, subscriptions are generally preferable to one-time payments (lifetime etc), because otherwise customer data cannot be deleted, even after the customer is long gone. One exception to this might be if the application doesn't use any cloud services (data is stored on the end-user's device etc).
Lifetime subscriptions can definitely work for some products, especially simpler ones without ongoing development. It provides more value upfront for customers. But you need to ensure pricing accounts for lifetime value and you may still need to charge for major new versions to fund their development. AI could help create minimum viable products to test this model. Worth considering as an alternative to recurring subscriptions in some cases.
Another business model that is becoming more and more popular is lifetime subscription. And availability to upgrade once new version of the product is launched. Not all products are suitable for this, but for others can be something to consider. And now specifically, when you can create a one-feature product with AI pretty fast.