Let me start by saying, I know some of you hate subscription models, and that's okay. We intend to support our existing purchase model for the foreseeable future.
If you don't like subscriptions, it's fine if you just don't subscribe. We'll just keep offering you things you can buy.
Arguing about rent vs. own is like arguing about whether all ice cream cones should be chocolate or vanilla. People simply will not agree, can not be argued with or convinced, and it's just not that hard to offer both. :-)
But you may have noticed a trend towards subscription offerings for software / information products: Netflix, Pandora, Spotify, Adobe Creative Cloud, Office 365, Google Apps for Business, etc. Even things like Amazon Prime -- a weird hybrid membership / music / video / books subscription. And Logos Now.
By way of explanation (not argument -- I don't need you to agree or be convinced)... businesses like ours want to offer more things by subscription because:
- It provides more predictable revenue. Upgrades every few years bring in a nice hit of cash, but that cash gets used over time. Historically (long in the past) we got to the point of worrying about payroll and the rent as we neared the next product release. It's a scary and dangerous way to live, going feast to famine over and over. There's value to having revenue come in smoothly over time -- because most expenses for digital products companies are also smooth over time. (Payroll is the most significant -- we don't have physical inputs like metal or wood or other commodities.)
- The Internet and mobile apps create an expectation of ongoing support. We used to make a product, sell it to you, and be done. Sure, there might be some bug fixes, but often they were delivered on-demand for specific users, or even held until a future (paid) upgrade. (1990's software model.) Now people expect frequent updates, immediate bug fixes, and that the mobile apps are updated constantly to support the latest screen size, OS feature, handsets, etc. Moreover, people expect syncing of their data to the cloud (when you get a new phone you don't plan to copy off and then restore your personal data -- you expect to sign in and have it there), web-based access to some/all capabilities, etc. Writing new code takes time and money; keeping servers up 24x7 for thousands of users is surprisingly non-trivial.
- Actual support is eternal. We offer free technical support indefinitely. Depending how you calculate it, it costs $9-20 just to answer the phone. (Sounds crazy, but think about the per-hour wage, the 20 minute average call length, the supervisor, rent, computers, training, etc.) People want to buy once and be done with payments, but they expect us to answer the phone forever. And even though we sold "software for Windows XP", users expect that when they upgrade to Windows 8.1 (or 10, or 11, or 15, etc.) that we'll make sure it works there, and answer the phone if they have an issue or question while installing it. ("You should have built support costs into the price..." I'm sure someone will say... but I don't think our 1995 customers -- many of whom are still with us -- really were willing to pay for the 20 years of support some, but not all, of them were going to use. And we aren't good enough actuaries to have calculated all that correctly!)
Yes, product upgrades are a way we recover some of those support costs, and more, but many of you have correctly pointed out that 'the software is already good enough for my needs.' We're becoming a victim of our own success! Logos is good enough for some users. Some people don't need any more content, and are no longer attracted by a set of content in an upgrade package. But they still want new code, maintained servers, ongoing support, updated mobile apps, etc.
- Nothing is ever done. If you published a book in the 1990's, it was done when it was done. You bought it, and you got what was printed, and nothing more. Today, much of the content we make is actually updated constantly. The Lexham Bible Dictionary is more than three times as large as when we first shipped it a few years ago. (It's the equivalent of around 6,000 paper pages now.) Since we first released it (free), we've never stopped having one or more people assigned to it; our costs continue to accumulate. Even as we slow work, reflecting its near comprehensiveness with regard to the original scope, we plan to keep updating and revising it in response to feedback, new research / scholarly-debate / publications / discoveries. If we'd 'sold' you the LBD in print in the 1990's, our obligation and relationship would end when you bought a copy. You'd live with the typos, and ten years later you'd still own it, with no further expense, but you'd then own a ten-year-old dictionary that didn't reflect any fixes, corrections, or new contributions. If you got the LBD three years ago, you've since gotten triple the content, and will continue to get improvements and new content for years to come. You always have a brand new Bible dictionary. It just costs something to keep it brand new.
(Do you own two paper Bible dictionaries? Did you buy one in the 1990's and buy another later? Sure, you 'own' each, with no rental payment, but to own 'the latest biblical scholarship' you effectively had to keep paying -- buying a new edition, or another dictionary, every few yeas.)
In the same way, valuable data sets like our Lexham Cultural Ontology, will grow indefinitely. You 'bought' it in Logos 6 base packages or upgrades, but we don't want it to stop growing. It represents 80,000 tags in around a dozen core works, but there are 50-100 more works that could be usefully tagged. Each of these is increasingly obscure, but the overall value of the tool increases as the tagging becomes more comprehensive. It would be hard to sell you 'the next 5,000 tags' -- how would you price that? -- and especially the 5,000 after that, but the cost of doing that tagging is real and ongoing.
Visual Copy templates, photos and other media, our catalog of online third-party media resources -- these are all huge web-hosted collections that can usefully grow on a daily basis, some of which (the catalog, for example) need to be edited and maintained frequently.
We could simply price all this into our base packages: charge enough to cover the cost of making them plus anticipated support and update costs for X years, factoring in math / guesses about how many people will buy and then stop using (representing 'extra revenue') and how many will buy and use a lot (representing 'extra expense'), and then make guesses about use lifetime, years left in school / ministry, etc. It would be like becoming an insurance company. :-)
But the end result would probably be to make the base package very expensive, thus costing so many 'light user' sales that the cost to 'heavy users' would go up dramatically, and everyone would be unhappy.
So we're trying to find a better middle ground; our goal is to use subscription products to ensure that people who are heavy users forever are also revenue generators forever. By stretching the revenue out over time -- and having it continue as long as the use does -- we ensure that revenue and expenses are more in sync. (As opposed to getting it all up front and hoping it lasts till the next big thing you can sell ships.)
And when this model works, a wonderful side-effect appears: the cost-of-entry to the platform goes down. Starting with the product doesn't have a large up front cost; it's just a few dollars a month. That invites more participation, more trials, and (hopefully) more users. Which lets us spread our costs over more customers, and ultimately offer more value for less overall cost. That's how you can watch a movie every night of the month (on Netflix, for $8.99) for less than the price of buying a single movie on DVD.
And yes, I know some of you would rather own one movie on DVD and be able to give it to your grandchild, rather than risk that your $8.99 subscription is canceled / the movie removed from your collection. In which case you couldn't give your copy of The Sound of Music to the grandkids. But, if you had bought The Sound of Music on VHS long ago, while you never would have had any rental fees after, you'd now have a low-res, old-media VHS tape your grandkids wouldn't want to watch even if you gave them your old VHS player. :-)
They want to watch it on their phone. In a car. And they don't want to watch old movies anyway. They're waiting for The Sound of Music Rebooted by J.J. Abrams. :-)
Again, we're not trying to take anything away. We actually love getting large hits of revenue around upgrade cycles, and there is a whole set of other problems with slow revenue over time. That's why we're not making a wholesale switch to subscription -- it would completely disrupt our business. Don't worry. We're just preparing to support both models so that we can offer you more for less and address the needs of people who like both models.
We are going to serve both chocolate and vanilla ice cream cones. We don't need to argue over which is better. They're both great, and you can get the one you like!
