Move from yearly subscription pricing to a single price for lifetime membership?

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Hey NewsBlur folks, I'm asking you guys since it's likely that if you're reading ideas on our support forum, you probably have some interest in seeing NewsBlur succeed.

At this point, there are a few hundred premium users, all paying from $1 to $3 per month (mostly $1). It's keeping the servers running, but not much more. My goal is to make enough to one day run NewsBlur full-time. In order to do that, I would either need to get a lot more premium customers or raise the price point. Would a $20 (maybe $18) price point for a lifetime subscription be a better idea than having recurring subscriptions? Note that I would not continue to have both subscriptions and the lifetime price. Switch to $18 and that's it, although I'd continue to have tiered pricing that allows you to pay more if you like.

My other goal is to get NewsBlur in front of as many people as possible. I'm thinking this may help.

And just as a note, I would upgrade everybody from the yearly subscription to a lifetime subscription.
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Samuel Clay, Official Rep

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Posted 4 years ago

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Totally different consumer mindset for a one time purchase than a subscription.

A) Yes, make the switch so you can do this full-time.
B) Wait until the iPhone app is, or is close to, a reality to enhance the value proposition.

That said, what about a kickstarter project to get the fundraising ball rolling? Discounted lifetime accounts, maybe some schwag, etc.
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Samuel Clay, Official Rep

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I think waiting for the iPhone app is the way to go, since I might be able to charge separately for that. I'd love to make it free, but there are costs associated with running the additional bandwidth.
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Joshua Poehls

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I for one would happily pay for the iPhone app separately. It's just plain worth it.
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Martin Barry

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You need to think this through a bit more. You said yourself it's not bringing in enough revenue to suit your ideal plans. Shifting to lifetime plans at the prices you mention front loads a bunch of revenue but it's less than 2 years worth of the existing per user revenue. You need to keep new users coming on board at an increasing rate forever even if your cost base has excellent economies of scale. This is not impossible but is that the best way of achieving your goals? You might miss those recurring revenues down the track...
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Allen

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Logically, I have to agree with Martin's point. I don't see how this would in fact be more sustainable. . . or is your thought that sufficiently more people would bite at a one-time offer than would opt in to subscribe?

Why are you unwilling to continue the subscription model while also offering the one-time option to anyone who'd take it? Seems to me, that gives you the best of both worlds.
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Samuel Clay, Official Rep

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I think too many price tiers is confusing. Also, having a single price may bring in more premiums. But this is coming from personal experience. I know I am much more likely to buy a web service that is a one-time fee rather than a less expensive recurring fee. And NewsBlur was built to suit my personal web reading tastes. So maybe payments should flow the same way.
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gregstoll

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I think people would be more likely to pay for NewsBlur as a one time purchase. But I'm worried that then you'll be forced to pursue new users instead of focusing on making NewsBlur more awesome.

(I'll pay for whatever, just my two cents :-) )
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Brian Brennan

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Lifetime membership and non-free (but cheap) iOS app.

Sidenote: the picture of your dog absolutely factored into my decision to pay $3/mo instead of $2/mo.
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Adam Theo

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I'd say keep the subscription model, but make it simple. Subscription models make more sense over the long term.
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asorta

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Lifetime subscription means one thing only: you want money NOW and then close the shop. Keep $12 a year for now and get more subscribers, and the best way to do that - advertise. And the best way to advertise is FREE iPhone app. I emphasize "free" because that's the way for people to try your stuff and see how good it is. Do not raise the price (best way to loose customers), get more of them. And when you put NewsBlur on AppleStore ask your subscribers to comment - the best ad ever is word of mouth. Good luck.
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Joshua Poehls

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As a consumer I like the idea of paying once to own a product forever. However as someone with more insight into what it takes to run a service like this that model just doesn't make sense to me.

It's very simple. Costs for hosting, supporting, improving the service (all which will be expected to continue for the LIFETIME that was paid for) will continue to cost money each year. Eventually you will burn through the money you gained up front and your target market will be saturated. No more money. At that point you would be forced to A) close shop. or B) create value add features that cost extra which complicates the simple, attractive model you were shooting for in the first place.

I think your current yearly rates are very reasonable. We just need ways to drive more users in.
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Tristan Louis

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I think the current model you're offering works so I doubt lifetime memberships would add much beyond satisfying the few paying members you have today (not necessarily a bad thing but does it make sense?)

I think right now, if you were to focus your energy on getting some of the features that used to exist in the old version of Google Reader (eg. single-click sharing), you might get more bang for your buck, attracting power users who are unhappy with the changes on Google Reader.

IF, on the other hand, you decide to go down the route of lifetime pricing, you need to factor in how much it will cost you to maintain those users before you decided on the price to offer for a lifetime membership. Also, do meet with a lawyer over the idea as you need to establish terms and conditions in those cases. I was once involved with a startup that had a lifetime pricing plan: shortly after the company was acquired, the acquirer decided to end that product. Some lifetime customers sued because they had assumed it was their lifetime, not the lifetime of the app. True, the lawsuit was eventually quashed but it took a lot more lawyer hours than if they had had a user's agreement upfront.
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infinitary

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Keep the annual scheme in your own (and our:-) interest!!!

Add tiers depending on the number of feeds for more dough.

I have ~250 feeds and would be willing to pay 24, even 36.

PS: I thought I clicked on 24pa yet was charged 12?
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mquander

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Recently-subscribed premium user here. I would have preferred to have paid $20 for a lifetime subscription instead of $12 for a year, and I would be willing to pay probably up to $15 for a tablet version if there were a polished app available (Android, in my case.) Just a data point.
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Yeah, there's no way I'm going to support lifetime memberships. Not sure what I was thinking, but yearly subscriptions is the way to go. Also, any iPhone app I build is going to be free. You're already paying to be a subscriber, no need to extract more money out of you.

I am considering a business class subscription at $100 / month, which would make all of your feeds update every single minute. But otherwise, premium buys you everything there is to offer. It's the Apple way: simple pricing that encourages you to sign-up, knowing I won't try to squeeze more juice out of you. (I don't consider that business class subscription an add-on so much as it is a special upgrade that very few people would ever want. But every other new premium-only feature: search, possibly social, and anything else that's new is covered under your original premium account.)
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Kazriko Redclaw

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I read various daily web comics, and I've noticed that a few of them with very few readers will sometimes get two updates in one day because they're only checked perhaps once a day, and the first update landed just after it checked. Your $100/month for 1 minute updates is a bit excessive for me, but I'd love it if $36 a year (or maybe even $48/year) would get me once an hour or once every 4 hours updates on my lesser followed feeds.
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Check the site's statistics. No feed should update less than once every 4-6 hours for a premium members (and that's for sites with few updates, if any, per month, and only a single active subscriber).
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Kazriko Redclaw

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Hmm. That seems to be the case. Good enough then, I'll check the site if it happens again on any of my links.
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Shea Clayton

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lifetime subscription makes no economic sense imho. New phones, platforms, APIs and the like come out every day. Getting them to work isn't free. Thanks for having the balls to shoot this idea down - I don't want you to go out of business for lack of capital!
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Adrian Fita

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I also think lifetime membership doesn't make sense longterm. Like Tristan Louis says, with lifetime membership you won't be able to support the service for long. I'm glad you saw it this way too in the end.

You'll have to find ways to bring more subscribers, also optimize the application/servers to the bone so you can support more users with the same resources.
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Endolith

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This is basically the same business model as phone apps, right? Those are generally less than $20, and you get a lifetime of upgrades.

No way would I ever pay monthly for an app like this, but I'd certainly pay a one-time fee.

Lot of people here talking about you losing money by asking for a one-time payment instead of a subscription, as if potential customers are somehow forced to do one or the other.

If people aren't willing to pay on a yearly subscription for a piece of software, and you don't give them any other option, then you're losing their money.
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tedder42

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perhaps it's time to follow the Wikipedia/NPR model: once a year, guilt your readers to pay some money. Send them a totebag.
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Daniel Woolstencroft

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OK, first off as @infinitary mentioned, I think there's a bug in the subscribe process that downgrades you from $24 to $12. I had to go around again to get it to accept $24 - you might want to look at that.

Second, here's my thoughts on the subscription model:

If you switch to a one off fee, you'd probably be best doing something similar to what Pinboard.in did with their pricing - it basically creeps up as more people subscribe. That way it not only covers the increasing demand on the server, but it also encourages people to subscribe sooner, rather than later.

However, I'm in agreement with the majority here - I don't think $12 (or even $20) is too much to pay for a service like this. Flickr charge $25 a year, and as a RSS junkie I get way more out of Newsblur than Flickr.

I'd also perhaps not charge for the iPhone app, but make being a premium member a requirement to use it? You could add subscription signups as an in app purchase too. That way people may be more willing to sign up (one click, their card is already on file). Especially if there's an iPad app in Newsblur's future - I can't see anyone complaining that they have to be a premium member for their large screen Newsblur fix.

Apps like Instapaper haven't been afraid to charge for their services, because they're delivering a quality product. I would argue that Newsblur is exactly the same.

Cheers!
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I think one area you can look at for increasing the network effect of Newsblur users is adding 1-click sharing with a comment, which takes you to a newsblur page, with that comment attached.

So I'm reading a post on the Kindle Fire launch, I hit "Share on Twitter", type in my tweet in a popup, then hit send, and the tweeted/emailed/Facebooked URL points you to a Newsblur page, not the original.

Not sure if it would work, but I think it's worth an experiment.
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romkyns

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The Humble Bundle makes an amazing amount of money while allowing you to pay absolutely *any* amount of money, including $0.01, while offering extra features if you pay above average.

I think they've stumbled across an ingenious idea. Perhaps it'll work for you too. Just need to make *two* levels of premium features: a smaller set enabled if you pay anything at all, but enable everything if the monthly payment is above average. The user should be able to change their monthly payment any time, too.

Among other things, true "pay what you want" is sure to generate quite a bit of publicity for you!
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Kazriko Redclaw

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One thing that I noticed about it was that I signed up at $1 solely because it was the only way to try the system with all of the features. After using it, I'd probably upgrade to the $2 or $3, but now that I've already paid it I don't see a good way of changing the plan. Perhaps a way to pay just a single month for $3 then switch to a yearly plan later would help.

As for a lifetime membership, I always worry that services who do this will ultimately go away because they aren't pulling in new subscribers, making my payment early on useless.
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Samuel Clay, Official Rep

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You guys are awesome. Such terrific ideas. As soon as I ship social next month (and the iPhone app, ahem, tomorrow), I'll get back to making a better premium flow.
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rolli

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Please let me see how much I paid and until when I paid in order to allow me to change plan.
Perhaps I started with $1 per month tp try it and want to pay $3 because I like it.
A monthly and yearly renewal should be an option too.

...and yes make the sharing features easier and link back to NewsBlur from where the share origined rather then the original story in order to bring potential users to Newsblur ;-)
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The social branch (which is only weeks away from launching, and is just about to enter a public beta) will have a lot more inbound URLs that will show your shared comments and will encourage you to link back to your shared links via twitter/facebook.

Also, changing plans is great, but would it pro-rate and charge you the remaining amount? I don't charge monthly, I actually charge all at once for the year, so I would have to either offer a refund for a pro-rated amount (in essence, just charge that much less for the remained of the year if the user upgrades), or actually offer a refund if they go from $2 to $1. It's a bit complicated, and I would only make this change if it makes a big dent in the aggregate. A few users wanting to pay more warm the cockles of my heart, but spending what could be a few days of dev work to eke out a few more bucks a month may not be entirely worthwhile.
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rolli

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I just want to see until when my subscription period is going. Furthermore it should be possible to donate extra (because I have too much money, want you to have more or for other reasons) and it should be possible to cancel the subscription (which then will be effective at the end of the subscription year).
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Samuel Clay, Official Rep

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Yeah, I really need to build this...
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olliejones

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Lifetime subscription? Don't do it, Samuel! Unless some huge corporation buys them for 10,000 employees at $100 each, giving you a megabuck.

Continued revenue is something you need.
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Endolith

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Lifetime subscription can still bring in continued revenue, until every possible person who might use the product has paid for it. Might even bring more than a subscription model. The "pay once, get updates forever" model works fine for software/app developers. Depends entirely on which model customers are more willing to pay into.
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rolli

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A lifetime subscription model can be very good. Look at Pinboard which does it very successfull. So I don't believe that there is a definite answer to Yearly subscription or one time fee. Pinboard even has a one time entrance fee and a yearly subscription model for the users which want the "extra super good" service...
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dcsohl

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Pinboard's FAQ says they charge $0.001 * number of users. The current going rate for signup is $9.73 which means they have roughly 9730 users. At that price formula, that means they have derived about $47300 from user signup fees.

I'm not sure I'd describe that as "very successful".

Furthermore, the Wikipedia article on Pinboard says that the signup fee was $9 in December of 2010, so they've only grown by about 700 users in the last twelve months, which would net $6500 in signup fees over the course of a year.

I think most of Pinboard's revenue probably comes from the "archive" service ($25/year)....
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Endolith

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Hmm? Pinboard had 15,000 users in Sept 2011, certainly more by now. http://www.quora.com/Pinboard/How-man...
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dcsohl

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Well, then I guess the 0.001*number of users is not right. I got my $9 in Dec 2010 from Wikipedia, and I know it's $9.73 today.
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tedder42

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tenth of a penny is correct, apparently: http://blog.pinboard.in/2010/01/six_m...

But yeah, shenanigans probably.
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Matthew Sleightholme

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What about for additional revenue whislt you go through the scale out you do some of the NewsBlur tshirts for sale?