Unlike many, I am usually fine with the subscription model: I understand why it is useful for the developers and I think that, if priced correctly, it is not bad for the users for the vast majority of use cases. However, I often ask myself if the model will be sustainable when the big majority of the apps will be subscription-based.
Benefits of the Subscription Model
As I said before, I am fine with the subscription model and I understand why it is so tempting for developers.
- Many applications have running costs. Back in the days, software was just software. Nowadays, apps often have running costs such as hosting for synchronization services, App Store fees, cloud storage, APIs access, and a lot of other expensive integrations. In short, they cost more after shipping.
- Subscriptions allow you to spread your revenue evenly so that you can have a steady and predictable source of income.
- You do not need to rely on paid upgrades to keep incomes going. You can offer free upgrades and, therefore, you can maintain a single version of your app. You do not need to support and ship security updates for several versions of your app.
Moreover, except for some use cases, the subscription model provides some benefits to the users too.
- Users can more easily jump into a professional application for a reasonable fee instead of spending hundreds of bucks in advance.
- Users can pay only for the time they need the application.
The advantages for the developers are clear and the disadvantages for the users are minimal. That’s why everyone is steadily moving toward a subscription model. There is no escape.
The Problems with the Subscription Model
So, what is the problem then? The problem is that the subscription model is often overcharged. Some applications used to cost 2.99€ or 4.99€ and then switched to 0.99€ per month: that is 11.88€ per year. This price is small enough to not be a problem for many users, but it is a blatant 400% price increase in the first year. A price that must be renewed after every year.
The subscription model is almost always more costly in the long run, even if we take into account a rigorous annualization. I’ll take, as an example, an application that switched to the subscription model.
The original price was 69€ for the first purchase and a 50% discount on every major update (usually every 3 years). We do not need an advanced economic formula to understand that a yearly subscription of 39€ per year will cost more in the long run that 69€ upfront and an upgrade every few years.
The Subscription Fatigue
However, let’s ignore this for a moment. After all, many people may prefer to pay a small monthly fee instead of a bigger upfront payment. There is a bigger problem with the subscription model: the subscription fatigue.
Even if subscription cost is adequate, every subscription quickly adds up. Moreover, there is an “overhead” in handling subscriptions that cannot be ignored when considering the cost. While paying for a subscription is not a big deal, when you have a lot of subscriptions to handle this can quickly become a problem.
With a quick look at my subscription count, I can see something like 20 active subscriptions. Yes, most of them are small but they sum up to ~130€ per month (not counting the services I already decided to not renew).
I need to keep track of each one of this subscription but, more important, every month I need to decide if I want to renew the subscription or not: I need to evaluate how much I used it and how much I plan to use it in the future, plan if I can switch to a cheaper or better service, and more. This seems something easy, but it is a kind of cognitive load that I would and could easily avoid.
With one-of purchases, instead, I may think a lot before investing 50/60/100 euros on some software but after that, I can forget about it. The software is “mine,” there is no more thinking about it.
When the subscription model was irrelevant, I could have used a lot of applications at the same time. Maybe I could have collected 30 applications during the last years and I can use the one that best fits the specific task.
With the subscription model, instead, with just 10 apps (I am not counting services like Netflix or Spotify) I feel I need constantly choose what I need to keep and what I need to lose. And that is the most expensive thing of all.
In conclusion, I do not have a problem with a single app switching to the subscription model. However, with more and more apps becoming subscription-based, I am starting to feel exhausted. Subscriptions are like “open tasks” in the back of my mind. It is a strange sensation to explain.
And you? Do you have the same experience with multiple subscriptions? Let me know.
Photo by Rami Al-zayat on Unsplash