In Defense of Subscriptions


It’s not hard to see the world has moved away from discrete software releases to a model that favors recurring periodic revenue. Gone are the days of a bi-yearly office suite offering or a tentpole version of an operating system that might gain some features down the road. Instead we now pay a yearly fee to use the program or application and in return we get lots of new things on a somewhat stilted cadence.

There are a lot of things to decry about software subscription models. I’m not a huge fan of the way that popular features are put behind subscription tiers that practically force you to buy the highest, most expensive one because of one or two things you need that can only be found there. It’s a callback to the way that cable companies put their most popular channels together in separate packages to raise the amount you’re paying per month.

I’m also not a fan of the way that the subscription model is a huge driver for profits for investors. If your favorite software program doesn’t have a subscription model just yet you’d better hope they never take a big investment. Because those investors are hungry for profit. Profit that is easier to see on a monthly basis because people are paying a fee for the software monthly instead of having big numbers pop up every couple of years.

However, this post is about the positive aspects of software subscriptions. So let’s talk about a couple of them.

Feature Creatures

If you’ve ever complained that an application or a platform doesn’t have a feature that you really want to see you know that no software is perfect. Developers either put in the features they think you want to see or they wait for you to ask for them and then race to include them in the next release. This push-pull model dominates the way that traditional software has been written.

How do those features get added to software? They do have to be written and tested and validated before they’re published. That takes time and resources. You need a team to add the code and tools to test it. You need time to make it all work properly. In other words, a price must be paid to make it happen. In a large organization, adding those features can be done if there is sufficient proof that adding them will recoup the costs or increase sales, therefore justifying their inclusion.

How about if no one wants to pay? You don’t have to look far for this one. Most of the comments on a walled garden app store are constantly talking about how “this app would be great if it had this feature” or “needs to do “X” then it’s perfect!” but no one wants to pay to have those features developed. If the developer is already charging a minimum for the app or giving it away in hope of making up the difference through ad revenue or something, how can we hope to encourage them to write the feature we want if we’re not willing to pay for it?

This is also the reason why you’re seeing more features being released for software outside of what you might consider a regular schedule. Instead of waiting for a big version release to pack in lots of new features in the hopes of getting customers to pay for the upgrade developers are taking a different approach. They’re adding features as they are finished to show people the value of having the subscription. This is similar to the model of releasing the new episodes of a series on a streaming service weekly instead of all at once. You get people subscribed for longer periods instead of doing it only long enough to get the feature they’re looking for. Note that this doesn’t cover licensing that you must hold to use the feature.

Respect for the Classics

One other side effect of subscription licensing is support for older hardware. You may think this sounds counterintuitive. However, the likelihood that an older model of hardware is going to be supported later in life is due to the fact that there is no longer a need to force upgrades to justify hardware development.

Yes, there are always going to be releases that don’t support older hardware. If it’s something that needs to use a new chip or a new hardware feature it’s going to be very difficult to export that back to a platform that doesn’t have the hardware and never will. It’s also harder to code the feature in such as way as to run hardware that has varying degrees of support and implementation capabilities. The fact that an iPhone 7 and an iPhone 13 can run the same version of iOS is a huge example of this.

More to the point, the driver to force hardware upgrades is less impactful. If you’re writing a new app or new piece of software it’s tempting to make the new features run only on the latest version of the hardware. That practically forces the users to upgrade to take advantage of the new kit and new apps. It feels disingenuous because the old hardware may still have had a few more years of life in it.

Another factor here is that the added revenue from the subscription model allows developers to essentially “pay” to support those older platforms. If you’re getting money from customers to support the software you have the resources you need to port it to older version as well as continuing to support those older platforms with things like security updates. You may not get your favorite switch supported for a decade now but you also don’t have to feel like you’re being forced to upgrade every three years either.


Tom’s Take

I go back and forth with subscription models. Some tools and platforms need them. Those are the ones that I use every day and make lots of sense to me to keep up with. Others feel like they’re using the lure of more frequent feature releases to rope users into paying for things and making it difficult to leave. When you couple that with the drive of investors to have regular recurring revenue it puts companies into a tough spot. You need resources to build things and you need regular revenue to have resources. You can’t just hope that what you’re going to release is going to be popular and worry about the rest later. I don’t know that our current glut of subscription models is the answer to all our issues. However, it’s not the most evil thing out there.

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