The part of our model that we think needs to change is that many of the features are actually "services". Let's take "Lemma in Passage" as an example. It uses a database that we host and maintain, and need to keep updated with new resources. We could monetize it by making all new resources slightly more expensive (to cover the cost of inserting them into the database, but penalizing people who haven't also bought the Lemma in Passage "feature") but in my mind it just makes more sense to sell access to it as a subscription and pay for its ongoing expense via recurring subscription revenue.
Hi Bradley,
Thanks for raising interesting questions in your original post. It really helps identify the key issues. I want to focus on just one issue you raised above. Otherwise it gets lost in the voluminous thread where the same issues are rehashed over and over again.
Let me debunk this idea that just because a feature costs Logos $X/year to maintain, it can only be offered through subscription that is priced at ($X+Profit)/year.
I'll use a finance analogy to make my point, but by raising a question:
Is it reasonable to make a 1-time deposit to a bank but expect the bank to pay out $X/year for ever in perpetuity?
Let that question sink before you read to find the answer.
The above question is akin to you asking: is it reasonable for customers to make a 1-time payment to Logos for a feature set that costs Logos $X/year to maintain? Thus, first lets settle on the fact that my finance analogy is reasonable.
Next, the answer to my finance question above is a resounding "YES."
Let me make it concrete. Let's say that you would like the bank to pay you $5,000 a year forever into the future. The bank would happily pay you $5,000/year forever if you make a 1-time deposit of $100,000 assuming interest rate is 5% per year (5% of $100,000 = $5,000). This is not complicated finance. Thus, Logos can easily estimate a 1-time price to charge for features even if the features cost $X/year to maintain. This 1-time equivalent purchase price can also be solved when the costs are expected to increase every year due to inflation or other factors. The point is that there is always a 1-time equivalent price to a monthly or yearly subscription price. This is taught in Finance 101 all over the world to anyone who wants a degree from a business school.
