Have you ever upgraded one of your favorite programs or apps that you bought a permanent license for, only to be confronted by the need to subscribe to use the newest version?
This happened to me recently for one of the apps I frequently use on my iPad: GoodNotes. I bought version 5 a couple of years ago, but starting with version 6, they require a subscription to use it. I would have paid a new one-time license fee for the upgrade, but that is no longer an option and therefore I have moved on to Apple Notes instead.
GoodNotes is not the first instance of this happening to me and I find it to be a rather disturbing trend in the software industry. From an economic standpoint, I can see why a subscription model is much better for software development companies than a one-time purchase model, but it most certainly isn’t better for their customers.
Why Companies Are Moving to Subscription Models
Ever more software companies are moving to a subscription model in order to generate a more consistent stream of revenue. Instead of having spikes of income when they release new major versions of a piece of software, subscriptions allow them to have a continuous cash flow.
When Microsoft, for example, moved Office to a subscription model, they claimed it would allow them to focus more on the development of the software rather than on marketing major new version releases. It also has the added business benefit of ensuring a constant revenue stream.
From a business perspective, both of those are no-brainers. After all, what company wouldn’t want to have continuous cash flow while lowering marketing and release costs? This is, however, an entirely selfish perspective that could backfire.
Something that these software companies seem to forget is that a large number of other companies are also doing the same thing. This means that users end up with subscription fatigue which may drive away potential customers.
It is not uncommon for users to be subscribed to many different pieces of software or services at the same time. The costs add up pretty quickly which means that users are likely to second-guess whether they really need to sign up for a new one.
If I, for example, have to pay $10 or even $5 a month for a piece of software, I am going to carefully consider whether I really need it badly enough to spend money on it every month. Part of that concerns the fact that I am already paying for other programs or services monthly or annually and at some point, I just don’t want to or can’t afford to spend any more money on software subscriptions.
I don’t have a problem paying for the software I use on a regular basis such as my Apple One subscription. I use iCloud Drive, Apple Music, Apple TV+ and the accompanying software almost every single day. The benefit I get from it therefore justifies the recurring cost.
However, most applications, such as GoodNotes or Microsoft Office, I only use sporadically. I may play with a free trial subscription, but most of the time, I cancel it before I have to start paying for it because I just can’t justify the recurring cost.
Applications I only use every once in a while are exactly the type that I would pay a one-time license fee for, but am not willing to pay for continuously.
To be fair to software subscribers, there are certainly some upsides to it. For example, you always have the latest version and most of the time you get a continuous stream of new features. There are even customers who can benefit from software subscriptions such as other companies.
By subscribing to a product such as Microsoft Office, they can continuously deploy small software updates with incremental changes instead of having to purchase brand-new licenses for major updates with vast changes. This reduces costs in that employees may have to be retrained to use new major versions of software and the process of deploying the major upgrade is also costly.
That said, the individual consumer is the one who loses out. Their pockets aren’t nearly as deep and the benefits, while real, are fewer. At some point, the cost simply exceeds the benefits for software you don’t use all the time.
With so many companies starting to require a subscription for their software, it has gotten to the point that if I see they require one, I am unlikely to even consider it. Anymore, I just skip over it and look for something else that is either free or I only have to pay for once.