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Subscription vs One Time Payment. Anyone got experience with both? How about something hybrid?

First of all, let me tell you my perspective as a customer.
My general rule of thumb is that if its not in the cloud, I won't pay monthly fee. For example I will never buy Adobe Lightroom because I'm not a photographer and I'm not going to pay a monthly fee to edit 5 photos in a year. Not worth it. I'm happily paying Spotify for example because it gives me instant access to music - achieving the same result with "one time payment" will require me to buy and categorize every possible music I like.
So for software that sits on my computer, or that I don't use daily - I almost always prefer one time payment. The list of types of software / services that are justified to have monthly subscriptions are pretty small.

Now lets switch roles. As a developer who is working on a personal finance software, I find it hard to adopt subscription model. I'm not targeting accountants who will have to spend 4-6hours each day using my software. I'm targeting regular people who'm I expect to use the software once maybe twice a weak. Since I'm going old school and working on a desktop rather than cloud based software, it drives me even further from subscription based model. Moreover, personal finance is something you have to do your entire life, and I want to give my customers the feeling that even if my product will disappear one day, or will head into a wrong direction, they will still be able to use the version they've paid for.

I understand the beauty of subscription based models. Its practically a cash cow for as long as your product exists and provides value. However I think that in todays world, subscription is being overused for a lot of products that really should not be subscription based. My biggest concerns with subscriptions as a customer is that (a) software that barely needs a server behind it - is being offered as SaaS and (b) Once I decide to commit to a specific software, be it Image Editing, video editing, music production and etc - I don't want to switch tools hence I can't justify paying a subscription for a tool that to body heard of and risking its disappearance leaving me with empty wallet and no software.

So my first question to the community: Are one time payments dying? Have any of you had success creating a profitable software and base it on one time payments?

Just to clarify: One time payments could also mean you buy a specific version and have to purchase any next major releases. The difference between that and subscription - is that you don't have to purchase the next major release. You own the version you bought forever.

I'm also toying with the idea of hybrid model. For example providing the software as One Time Payment, but charge subscription for cloud based sync between multiple devices. I haven't seen anyone who is doing this.

So my second question: Does anyone had experience with hybrid models? How successful are they?

And to have things in context: I'm speaking here only about software and not about services.

Thank you!

  1. 2

    Brief thoughts:

    1. Yes, one-time payments are dying for the reasons you mentioned and more. They are easier to handle in budgeting (lower), and give customers the feeling they are in control. If the product no longer delivers value relative to the next best option, I will leave
    2. My last company and many software companies operate on license + M&S (maintenance and support) models. You pay $100 now, and $5-25 per year for ongoing maintenance (upgrades, new versions) and support (phone or email). We did tens of millions annual on this model...and were constantly trying to figure out how to move it to subscription (but couldn't stomach the short term)
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