The Subscription Apps Paradox

I am overwhelmed with subscription apps.

Imagine if we could only buy clothes on subscription.

Say I needed a new pair of jeans and headed off to the shops.

I might take some time to try different styles until I found the right pair. Then I take the trousers to the cash desk with Apple Pay ready.

“That’ll be £50, Sir, and then £10 per month for the year”, said the store manager.

“Why can’t I just buy them to keep?” I asked.

“Well, we need a regular income; otherwise we wouldn’t be able to design next year’s look”.

I don’t mind paying extra for alterations or occasional dry cleaning, but not to wear trousers after I’ve already paid.

I left the shop to try and find some trousers to own.

As more and more services switch to the subscription model, I become a dogmatic opponent, provoked by Ulysses, my once favourite writing app, when it changed to subscriptions.

I was heartbroken.

I paid £50 for the Mac version and £25 for iOS — then those payments came to nothing when the subscription came along.

App developers are espousing the subscription model to survive and put food on their plates. Instead of one-off purchases, developers are asking users to pay every year.

Subscription apps are not bad, but they’ve become ubiquitous and overpriced.

Subscription Apps Grab Your Cash

You must sympathise with developers — they have challenges.

Developers create their beloved product, secure start-up funding, refine their offering, launch it, invent new features, and make new friends because others lost touch.

Developers also need oil to burn at midnight and legal fees for divorce proceedings, etc.

Please don’t misunderstand me, entrepreneurs deserve to get paid for their products.

What I want to challenge is the preconceived notion that subscription apps are the best way.

Subscriptions are direct debits from your bank account, and every £/$30 adds up.

Users need to think hard about the first rental and future renewals.

The Spark that Started the Fire

Subscriptions or rentals have been a business model since I can remember. Buying TVs in the 1970s was madness because they often exploded, so we always rented.

Software companies switched to rental options in recent years. Adobe Photoshop could have cost you £600–700 but £10 to £20 a month for today’s subscription is affordable.

Microsoft charges £80 a year for Microsoft 365 and while not much cheaper than a £120 one-off purchase, the latter excludes new feature updates and technical help.

Smartphone apps are also going through an economic and cultural shift from one-off fees to rental.

In June 2016, Apple changed the iOS app store to encourage app subscriptions.

Apple reduced its commission, 15% after a subscription’s first year instead of 30%, and created 200 different price points for maximum flexibility.

Google followed.

Hence, industry leaders push subscriptions with one purpose — to make more money.

The Fallacy of Recurring Revenue

One selling point for subscription-based apps is the alleged continuous revenue it generates for the developer and the continual improvement of the product for the user.

Sometimes, however, I wonder if developers update their apps just to be seen by users as active.

To be worthwhile, the subscription model relies on customers resubscribing each year and new customer subscriptions to compensate for those who leave.

With little sign of the market for smartphones or app store turnover abating, developers may have little incentive to change their business model.

Pay per download is falling out of favour with developers, everyone hates Ads, and the freemium model fails to guarantee user upgrades.

Subscription apps are here to stay, and we need to accept it.

The challenge for app creators is to reverse the trend where 80% of users abandon apps within the year.

The majority of churn comes from subscribers who, for whatever reason, decide that the app isn’t worth paying for anymore. If a subscriber churns before the one-year mark, the developer never sees that 85% split. If the user resubscribes, Apple and Google reset the clock if a subscription has lapsed for more than 60 days. Rather convenient for Apple and Google.


The User Experience

I appreciate subscription benefits:

  • Support for ongoing development
  • Removal of annoying ads
  • Longevity.

But how do benefits stack up against real-life experience?

As a writer and every-day consumer, I rely on a range of apps to support hobbies and home life.

Gone are the days of my iPhone 3GS when I spent all night downloading apps because they were there.

I reached over 100 apps, with barcode scanners, lasers to help me straighten pictures and Doodle Jump.

And today, what would it cost to keep my popular services on subscription apps today?

ServiceAnnual Cost
Adobe Lightroom£120
AdGuard blocker£32
Apple Music£120
Amazon Prime£95
Clean My Mac£50
Bear Notes App£10
Fastmail email£92
Siteground hosting£86
Microsoft 365£80
Nest Aware (Google)£100
Nord VPN£33
Paste Clipboard£10
Halide iOS£10
Timefully Meditation£5
Unread RSS£19
Total£1,160 / $1,625

It’s Just a Cup of Coffee

Developers argue that their app only costs equivalent to a cup of coffee a month — some are more, but my total adds to a hell of a lot of coffee.

It’s expensive to be a human who writes, meditates, keeps notes, keeps fit, listens to music and cares about home and Wi-Fi security.

Developers’ profits might win in the short term, and there’ll be enough churn in the marketplace to make it worth their while.

But if I pay £95 a year for Amazon Prime why wouldn’t I pay £39 for a high-quality text editor like Ulysses?

Because Amazon Prime offers thousands of hours of entertainment and fast delivery of goods to your door, and if you leave, you have no creative work to lose or transfer to another app.

When you create content through a subscription app, you risk losing access should you end your subscription, and the longer you use an app, the more you get locked in, making it harder to leave.

Some apps can prove they can survive without subscriptions. For example, iA Writer is an app by a company with a healthy anti-subscription argument.

Some providers protect your access under their terms.

For example, if you unsubscribe from 1Password, your data remains accessible and secure, but your account becomes read-only.

If the market tries to coerce users to subscribe, users will refuse on cost.

Other negatives to consider:

  • Users can feel forced into annual rentals because developers make monthly plans extortionate.
  • If you stay on the free plan, expect to get bombarded with messages to go ‘pro’.

The User Reaction to Subscription Apps

Developers should not take us for granted. Subscriptions are not permanent.

Users will discern if they’re a light user, while others will not think twice about funding their favourite app.

By segregating benefits into free and premium, the industry is fuelling user churn.

Finances may improve, but long term loyalty from a broad customer base will take a hit.

Take a look at the app store’s comment section of any app that has converted to the subscription model. You’ll see a list of angry customers.

The Future

The future of the subscription app model will remain controversial.

Developers will chase the revenue curve, and customers will think hard before every download.

Customer churn will be a market norm with reduced numbers paying but remaining committed to their favourite product.

The paradox is a stable income through fewer paying customers.

When I started to write this post, I intended it to be an opinion piece against subscriptions.

However, I’ve come to understand their place and will continue to be happy with a handful.

Now, let’s get to work reducing that list.