Subscription Pricing

Michael Tsai has a great write up regarding the recent move by Day One towards subscription pricing. I completely agree with his conclusion that substantial price increases, combined with a change in the payment mode, are leading to confusion regarding the source of the backlash.

My hunch is that, for an app under ongoing development, many people would be fine paying a subscription that averages out to about the same amount they had previously been paying per year (initial purchase plus occasional upgrades). When I hear that an app is switching to a “sustainable model,” this is what I assume people mean is happening.

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But that doesn’t seem to be what’s been happening. Instead, we’ve seen subscriptions combined with price increases, customers balking, and insinuations that people just don’t want to pay for anything anymore. With more than one variable changing at once, I don’t think we can conclude that people hate subscriptions.

Michael also recently summarized the 1Password backlash regarding their move towards subscription pricing.

Michael’s conclusion resonates with me because I’ve chosen not to sign up for some subscriptions exactly because of the price increases. Here’s where I stand on each of the examples he calls out:

Day One 2: I don’t know what I spent on this back in 2012, but I was happy to pay $50 early last year when version 2 shipped — this app is easily worth $12.50/year to me. Unfortunately, due to their sync restrictions, I didn’t migrate to version 2 until they shipped version 2.2, which included end-to-end encryption. I still feel a bit burned that I had to wait nearly 15 months for a feature they promised at launch. Even with the 50% discount they’re offering current customers, Day One Premium at $25/year is a 100% price increase over what I’ve previously spent, in exchange for “the ability to create more than ten journals” (I have one) and “access [to] all future premium features”. I’ll reconsider if there’s a compelling future feature, but for now, no thank you.

1Password: I don’t know that I’ve ever paid for an update after my original Mac and iPhone purchases, but I know that I use this app dozens of times each day. When they offered their Family Day Special, I jumped onto their subscription plan. The value here is very obvious to me, and if I can make use of 1Password free to the rest of the family, that helps keep us all safe.

TextExpander: I’m still running version 5. I enjoy this app a lot, and especially appreciate their long-running support of Back to Work, but doubling the price was a bridge too far for me. When version 5 and the equivalent iOS app stop working for me, I plan to move my simple snippets into Apple’s native solution, and I’ll follow Dr. Drang toward Keyboard Maestro for my more complex snippets. I’ll miss some of Brett’s TextExpander Tools, though.

Lightroom: I thought about buying this when I finally picked up a nicer camera last year, but the value for the subscription wasn’t obvious. I’ve been making do with Apple Photos and some wonderful external editors. With native support for third-party editors returning in High Sierra, I doubt I’ll reconsider this choice.

Microsoft Office: Both my wife and I have licenses through our employers that allow for installation on a home machine, so we haven’t even had to think about this. If I lost access to that, I would be fine, but my wife would need to subscribe. For $70/year, I think she would get tremendous value from this subscription.

The bottom line is that I’ve fine with subscriptions when the price matches the value. Combining a price increase with the change in payment model will force me to reconsider the value, and I may or may not subscribe.