There has been a lot of discussion about software and plugin subscriptions, and now that things have cooled down a little, we thought it helpful to take a detailed look at winners and losers when it comes to subscriptions and ask some key questions of brands.

Advantages Of Subscriptions For Brands

Just for a moment, put yourself in the shoes of a brand. You have a choice between ad hoc income or a set of regular payments coming in; which would you choose? Of course, you are going to choose a steady stream of income. Even if you don't run a business, would you prefer regular monthly income or ad hoc cash payments now and then? Again, for most, the answer is obvious.

And whether you like it or not, this is the choice that more and more brands are making. Regular monthly income helps with planning and cash flow, rather than the stop-start of large sums of money every 18 months or so when a product is released.

You may not like the idea, but it's a smart idea from a business perspective, especially if you are a large company with large overheads reporting to stockholders or those with venture capital money behind them because investors want to see growth.

Software as a Service (SaaS), which is what subscription plans are, is a proven business model to achieve that growth, and this is what brands are looking for.

Let’s be clear, despite all the marketing efforts and messaging from brands, subscriptions haven’t been conceived for the customer’s benefit. The primary goal is to help brands generate regular revenue and simultaneously build a customer database. 

That’s not to say that software subscriptions are all bad. They can be useful for users too.

Disadvantages Of Subscriptions For Brands

One area where subscriptions haven't been adopted is the smaller developers. For one thing, if you only have two or three products, the current model doesn't really work. If you have hundreds of plugins and can offer them for £30 a month, then it looks like a great deal, and three or four for £30 a month doesn't look as attractive.

In addition, small developers have much lower overheads, which means they are less likely to need to move to subscription models.

Either way, small developers will continue to offer perpetual licences; if that's the way you want to use your software, then our advice is to support small developers and buy your plugins from them.

Advantages of Subscriptions For Users

That said, it’s not all bad for users when it comes to subscription plans. There are some advantages to consider…

Try It Out - Consider plugin subscriptions as a tasting menu. Imagine if you had purchased even one plug-in, say for $199, and a few weeks in, you get buyer’s remorse. It's too late; you are stuck with it. Whereas with a subscription, you can try the whole menu and see what you think for around $30 for one month. If it doesn’t work for you, you can cancel, and it only costs you $30. 

Pay For What You Need - One thing that subscriptions have helped with is to realise how much money we can waste buying plugins that we only end up using once or twice. I would hate to think how much wasted money is sitting on a hard drive in unused plugins. This is where subscriptions are brilliant; we can use them for a couple of months, blow around $60, then realise we don't need them anymore and cancel the subscription.

Help To Spread The Cost - Subscriptions can help to spread the cost and give access to software and plugins before you would have saved up the money to buy a perpetual version. Some of the better offers on the market offer access to thousands of dollars of plugins for a fraction of their monthly cost, which means you don't waste money on plugins you stop using, and you can cancel when you like,

Go Monthly - Most subscription plans offer a discount for an annual commitment, often equivalent to 2 months' fees over a year. The annual option can look attractive, but if, after a couple of months, you realise that the subscription plan isn’t working for you, you have wasted a year’s subscription. Whereas if you paid monthly, at worst, you only have a month to wait to cancel the subscription and save your money.  So think carefully before you commit to a long-term plan.

We advise signing up for the month-to-month deal and see how it goes. If a large part of the offering becomes part of your workflow, then reconsider and sign up for an annual plan and take advantage o the savings.

Project Specific - If you need a plugin for just one project, you can buy a subscription plan for that project rather than spending a lot more on a perpetual licence on a plugin you don’t expect to use again. If the client returns sometime later and wants to make some changes, start the plan again for a month and finish the work.

Single Product Subscriptions With A Range Of Options Can Be Very Helpful - Subscription Plans for a single product like your DAW can be worthwhile. From a cash flow perspective, you can spread the cost of a big ticket item over a longer period, safe in the knowledge that you will always have the latest version.

Avid's Pro Tools is a good example of how to do single-product subscriptions. They offer a free version and then three paid-for tiers starting with Artist and going up to Ultimate at the top end. You see which features you want and then take out a subscription for that range of features, knowing that you are paying for what you need and not for features you will never use.

Disadvantages of Subscriptions For Users

The Cost Can Mount Up - The idea of lots of plugins for a small monthly payment can appear attractive. However, it's what we call the Chinese Buffet sell. Many of us have been enticed by some Chinese restaurants' 'all you can eat for $20' offer. You walk in, and there are steaming trays of food for as far as the eye can see. Wow, you think this is a bargain. But is it? Sure, it's a bargain for those who haven't eaten for a week. But, for the average person, you'll find you end up eating what you would have normally ordered and, in doing so, probably spent more.

The huge bundle of software in a subscription plan is only a good deal if you end up using most of them. Otherwise, you are better off buying the ones you need, if you can. When you step back in the cold light of day and consider software subscriptions, you will see the cost of them can mount up. If you subscribe to a DAW and a couple of subscription plans for plugins, you can easily soon be spending $100 or more a month… or $1,000 a year.

To keep a lid on costs escalating out of hand, our advice is to go through your financial statements every month and review your monthly outgoings. It’s a good habit to get into, and over a year, you can save a small fortune cancelling, pausing or downgrading subscription plans. Go on, do it now.

The Fear Of Missing Out (FOMO) - Subscription bundles play to the FOMO (Fear of missing out) in each one of us. If I don't subscribe, I might not get the next free plugin or the next cool update. That's true, but on the other hand, you will almost certainly end up paying for stuff you don't use.

Stop Paying, And Lose Access To The Software - The nature of Software As A Service (SaaS) is that you only get access to the service if you keep paying for it. But remember that it’s just the same with any service you pay for. Take insurance, for example. As long as you pay the premiums, you are covered, but stop paying the premiums, and you are no longer covered.

You Need Constant Internet Access - Users are worried about losing services that depend on access to the Internet to confirm that they can use them. The better models are not dependent on having constant internet access. Any brand using an iLok license on an iLok (rather than the iLok Cloud) can work without internet access.

Multi-Product Subscription Plans Do Not Offer Choice - The problem with multi-product subscriptions, in our case mainly plugins, is that most, if not all, subscription offerings from brands are the all-you-can-eat variety. What I mean by this is each brand offers a subscription plan that gives the user access to every plugin from that brand’s catalogue. It's an all-or-nothing choice. There are two major flaws with this model that brands offering plugin subscription plans are choosing not to address…

1. Users need a number of these all-you-can-eat plans from different brands to give access to the full range of plugins needed. Although the cost of each plan may be acceptable, once you get multiple plans to cover the range of plugins you need, the cost can quickly mount up.

2. The user who only needs a small number of plugins has to pay the same amount as the person who plans to use a lot of plugins. If you only need a couple of plugins from a brand, you end up paying for access to plugins you will never use.

None of the current plugin subscription plans I have seen offers the user the option to rent just a handful of plugins. Even though Plugin Alliance is being held up as offering one of the better plugin subscription plans, they offer three tiers, but all three tiers give access to all the plugins from all the brands that make up Plugin Alliance. You cannot choose the number or groups of plugins in each tier. Instead, the differences in each tier relate to other options and services.

Why is no brand prepared to offer the option to select the plugins we want to rent from them? Maybe through smaller bundles that are function-based or, better still, complete freedom to cherry-pick the plugins we want to rent? After all, we can do this with perpetual licensed plugins, so why not subscription-based licenses?

What We Need Is Choice

Our opinion is that, in general, subscriptions are not a bad idea. They are certainly not the evil some forum keyboard warriors would have you believe. For some, they offer choice and access to software they could not use any other way.

As with many things in life, it's not subscriptions as a concept that can rub people the wrong way; it's how they are implemented. Russ Hughes, in his article Software Subscriptions Are Something We Need To Get Used To explains…

“Whenever a brand approaches me to ask my advice on introducing a subscription service, I give them one piece of advice. Give your users a choice. Holding a gun to their head and saying it's subscriptions or nothing isn't a good message. In some cases, the brand has investors holding a gun to their head telling them it's SaaS or nothing. This highlights a growing concern I have where venture capital firms are moving into this industry and trying to maximise growth fast. I'll leave that for another day, but suffice to say, I hope some of them lose a lot of money trying to industrialise the creative sector. They don't give a damn about creativity; it's just another number on a balance sheet. It could be beds or bolts to them. 

Thankfully some of the largest players in the software subscription market are private companies. So they are not beholden to investors trying to make a fast buck at the expense of customer choice. This can be seen by the flexibility of their offer; they understand that their customers got them to where they are and want to honour that commitment.”

Brands that offer subscriptions as one way to pay offer more choice; in my book, more choice is good. But it’s more than the cost we need choices about. We need choices about which products we choose to rent from a brand rather than only offering the all-you-can-eat model. I look forward to the day when we can choose which products we can rent from plugins brands.

What do you think?