I'm not disagreeing with you, except that I don't think the subscription model of itself necessarily increases the incentive to invest in product development.
Oh I do.
Well, it's the other way around. It doesn't incentivise them to abandon it. One of the biggest problems with standalone apps is the economics of supporting them. People pay once and then demand bug fixes and updates for ever, and that is just not sustainable.
The other thing about subs models is the legalities. The software provider can't just abandon it without being in breach of contract, and because everyone's contracts start at different times it creates a perpetual problem for them.
While a subscription model product meets a continuing user need and while competition does not attract customers away, no need to enhance the product.
I think that is just a very negative way of looking at it. When has that ever happened to a subs product? It's happened plenty to standalone software.
Put it this way, Apple abandoned Aperture, even though it had a lot of loyal users who were waiting patiently for version 4. But Apple wasn't making any money from it, everyone who was going to buy it had. If Apple had a recurring revenue stream from the product would they have discontinued it so quickly? I think it would have changed the conversation.
You get competitors whether or not you're selling standalone software or subscriptions. Technology moves on, and you need to keep up with it.
In fact the pressure from the corporate can be not to invest while recurring revenues continue to roll in. I've seen that in a number of industries, such as telecoms. Back in the '90s, telephony was a cash cow, and the Internet was a disruptive technology that looked like entirely bad news. Telephony was pay-per-use, but Internet was a fixed price service that was clearly going to lead to lower revenues without a lot of risky investment. And why invest? Telephony was bringing in revenue (at the time) with less risk and much less hard work. The telcos hated the Internet, and existing telephony product lines fought tooth and nail to try to kill it, nearly killing the telcos in the process. I speak as a former industry insider.
Yeah, and look at the winner!
And, in fact, most telcos, etc. just work to ARPU and now LTV revenue models.
Established companies with established recurring revenues get rather cosy, and don't invest if they perceive that don't have to, and to dominant players in the market it will often look as if they don't have to. Been there, done that, didn't like the T-shirt.
But look who wins. It's the companies who invest in their products, and the ones who don't die, regardless of their licensing model.
