Lifetime plan vs. subscription model? Sustainability issue
More and more companies are using a subscription model instead of a one-time payment for a product.
Duolingo, CapCut and the like are examples of subscription models (monthly or annual), while DaVinci Resolve, for example, has a lifetime license.
From a customer's perspective, it is most convenient for me to have a Lifetime option, but from a marketer's perspective, I see a more sustainable subscription model for the survival of the company.
On what basis do you decide how to price your product and what form you choose (lifetime vs. subscription)?
When do you think a lifetime is beneficial for the company?
Sometimes I feel like the lifetime option will soon disappear.
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Replies
SourcePilot
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@lucas_oliveira10 I think that in this AI era, there will always be only a subscription model (because of the used tokens).
Querri
X-Design
@lucas_oliveira10 I agree completely. The variable and unpredictable cost of tokens and external API usage makes a subscription model virtually mandatory for almost all current AI tools.
A Lifetime Deal (LTD) only becomes feasible when a company has the infrastructure to support its own, fixed-cost, in-house model, which isn't the reality for most AI products today. Recurrent costs necessitate recurrent revenue.
I would love to be able to deliver a LT pricing for my product, but considering the maintenance it requires, the best solution is something I'm uncomfortable with - a subscription. So I can keep bringing value, and updates.
@norteapp
But once you offer a lifetime option, don’t you feel tempted to skip updates or lose motivation to keep improving?
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@norteapp @shyunbill This is the culprit.
@shyunbill @busmark_w_nika Thats the thing. In my case my platform helps users manage their credit cards and insurance policies, meaning I need to keep it up to day constantly. A lifetime offer is problematic when you have to work on it constantly.
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@norteapp Maybe you could experiment with some kind of a hybrid model. We have it right now, and not everybody switches to a lifetime. For some peopl,e it is convenient to pay yearly or monthly to have a product for a certain period of time.
It depends on the costs to keep that product alive, users' LTV and the niche of the market.
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@giulia_borghi But to be honest, every product needs maintenance, if you want to grow, you need to innovate (and that needs to be financed).
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@aravind_raj10 I think that in this era, only subscription matters because if you wanna improve, you need maintenance.
We're running both at the moment and I find that some of our lifetime users have a larger threshold for what they're willing to put up with on the product breaks / roadmap wants / bug patches front whereas folks on a monthly have greater expectations about everything "just working" (rightfully so).
I think you calculate / speculate the average churn / LTV of a customer and try to have that more or less in line with your LT offer
Lifetime is great to get 1. great paid user data 2. really insight into ICP / user base 3. generate some capital at the front end.
I think lifetime is great for like an X launch window but less sustainable for a long term play - also if you dont have much startup cash - valuable to run an appsumo launch (typically lifetime) to offload some of those front end marketing costs.
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@dzaitzow Thank you for your input. I haven't been thinking about a lifetime plan like for something that can be applied at the beginning. Maybe I should consider it once I create my own product.
@busmark_w_nika worth evaluating - I don't see it having a ton of value down stream but at the onset - something to think about.
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@eljo_prifti That one worked well for me. But in this era, almost everyone wants a subscription (speaking about companies).
Triforce Todos
I tend to look at product complexity and support costs. If ongoing support and updates are costly, a subscription makes more sense. If it’s more self-contained, a lifetime option is feasible.
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@abod_rehman Tho I agree with the subscription model to have a recurring revenue, I would play with some lifetime options too. (But I would make them less affordable, so people would opt for a subscription otherwise.) :D
TinyCommand
I feel like lifetime deals make sense only in the beginning, when you’re trying to get early users and build some trust.
But once the product starts growing, subscriptions usually keep things healthier, you’re updating, fixing, improving all the time.
I don’t think lifetime will disappear, but it’ll stay as an early-stage thing rather than a long-term model.
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@anushkahode Interesting POV. I didn't think about a lifetime like this.
Good question. Lifetime feels great as a user(if the price is also fair :D), but from a business perspective, it only works if the long-term maintenance costs stay low. Otherwise, it becomes a debt.
I see lifetime as a boost for early adoption, and subscription as the model that keeps the product alive.
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@viktorgems I haven't been thinking about that until people on PH opened my eyes :D
If your product has no recurring costs per user (like LLM API fees), offer a lifetime deal. People are exhausted by endless subscriptions (Netflix, Spotify, Canva — it adds up). They’ll eventually quit just to simplify their bills. You can calculate an amount considering average churn duration, which can even make you more money at the end.
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@thisiscetin Agree, if the product remains the same, you can afford a lifetime plan. Otherwise, a subscription is required.