They also added in AI chat at no additional cost, charging based on usage, while everyone else is trying to charge $20 for that alone.
They are pretty transparent on billing, at least for their highest cost items. At the start they would show you how much your searches cost them vs your bill. At one point I cost them more than I paid, so I tossed them some extra money to not be a drain. Now they show how much you cost them in AI tokens, and if you cost them more than you paid, you pay the difference, which feels fair. I think I use the Assistant a lot and only ever use $1-2 in a month.
With search, it did seem like scale came with per-search savings, but my hope with that was it created more margin for them to be healthy, since it didn’t seem like they had much based on what they showed in the settings. And now AI is eating into those margins a bit. I’m pretty happy with how they have handled all that. It’s probably the best $10 I spend each month.
Are there any examples of businesses becoming so successful with the sign-up to a subscription model they lower the prices (would have been a better ask)?
I think what happens more often is a company will leave the price the same for a long time. While economies of scale may widen their margins, they will use those to protect against future price hikes, as those tend to be supremely unpopular. As inflation makes everything more expensive, the subscription gets effectively cheaper by remaining the same price for 10 years, or whatever it may be. For example, Amazon left Prime the same price for the first 11 years, so as time went on it became a better deal comparatively. Now they seem to raise the price pretty regularly, so that ship has sailed for Amazon.
Conversely, 'lifetime' purchases can be a total disappointment if the software folds or is bought out.
They can also work out really well. I bought a "lifetime" PlexPass on the day it was launched. From what I can tell, that was around 2012. 13 years of service and updates so far. Plex is starting to have its problems with some questionable decisions as they look to give investors some ROI, but it's more than paid for itself by now.
I wish more of these companies would be ok with staying relatively small or growing slow, to avoid the compromised decision making that investors bring to the table. I wonder what the future of 1Password will look like as well, as they brought on investors too.
colesantiago•2mo ago