In this particular case, with a privacy tailwind, it will be unsurprising if it ends up increasing their sales.
For sure there's some abuse of the model where you're selling something that should be a one-time item, but that's not the case here, and Mullvad is providing an ongoing service (and still billing by month / year / etc. for the service, just without automatic renewals).
A fundamental part of healthy business relationships is value for value. E.g., you give me money, I give you a sandwich, you take the sandwich, eat it, and are happy with it. If you keep paying me for sandwiches but I don't give them to you, that's not healthy. Ditto if I put them on the counter but you stop taking them.
Personally, I think there should be a law that all service/software subscriptions auto-suspend after 30 days of non-use. Because right now there's a big incentive for businesses to get you to sign up for things they think you're not going to use, and to keep on charging you even though they know you're not using it.
All of them, from the local gym to Dropbox to Spotify. Subscription businesses can't make money if every consumer costs more to service than the revenue they generate. There's even an official accounting term for it, breakage.
> Produce nothing, but get paid every month
Failure to consume and get value from a subscription is your fault, not the business that fulfilled its obligation.
If a company can't exist without tricking people into paying for something they get no value out of, maybe it shouldn't exist.
You're getting all-you-can-eat from the business for a fixed price in exchange for predictable revenue as opposed to pay-as-you-go. That you think that's exploitative just tells me you don't understand the business model. You want to have your cake and eat it, too.
An all-you-can-eat restaurant where customers don't eat anything and you still keep charging them until they notice months or years later is indeed exploitative.
For something like an apartment, there's reasonable justification for long-term contracts and continuing to charge people without regard to use, in that it's an expensive good that has exactly one user at a time and where it can take a while to find a new tenant.
But that entirely vanishes with most internet-based subscriptions. If I stop watching Netflix, they stop experiencing marginal costs for me. If I get excited about a NYT subscription but then stop reading, it's the same deal. Nobody went out and bought another server just because I signed up. I could cancel at any time and they'd have to let me go. If they keep charging me when I'm not getting any value, then it's not a mutually beneficial relationship; they're just exploiting me. And indeed, maybe they were exploiting me from the get-go if their intent was to just get my money in without regard for whether I was going to get anything out of it.
People who take money without providing value are at best economic parasites, but quite a lot of them are just scammers, grifters, and frauds. Which is exactly why a law would be especially valuable here, so that their time and attention were devoted to some socially positive activity.
> keep charging them until they notice months or years later is indeed exploitative.
When is it the customer's fault for not cancelling? You're working very hard to avoid responsibility for the business contract you entered into.
> they stop experiencing marginal costs for me.
Which are a small part of the overall cost structure. So what?
> Nobody went out and bought another server just because I signed up
Absolutely they do. The business is managing its finances under the assumption of subscribers and LTV, and making investments accordingly based on those assumptions and forecasts.
> they're just exploiting me
For charging you for something you signed up for but were too lazy to manage properly?
> just get my money in without regard for whether I was going to get anything out of it
There you go passing the buck again. It's your responsibility to use the thing you signed up for.
> People who take money without providing value are at best economic parasites
You mean the money you're giving them as part of consensual business agreement?
And with that, I'm done. You are very dedicated to both exploitation and victim-blaming as justification. I'm not going to convince you otherwise, presumably because you made or make your living from that. “It's difficult to get a man to understand something when his salary depends on not understanding it," said Upton Sinclair, and I have better things to do with my time.
Does that also apply to your car/home/health insurance as well?
If you don't have an accident/get robbed/go to the doctor, are you being exploited by the insurance company?
Edit: BTW, I'm an old guy myself.
That said, those are prime opportunities for parasitism and exploitation, because it's hard to measure risk reduction until actual harm comes along. That's why those sectors need heavy regulation.
You said[0]:
"But that entirely vanishes with most internet-based subscriptions. If I stop watching Netflix, they stop experiencing marginal costs for me. If I get excited about a NYT subscription but then stop reading, it's the same deal. Nobody went out and bought another server just because I signed up. I could cancel at any time and they'd have to let me go. If they keep charging me when I'm not getting any value, then it's not a mutually beneficial relationship; they're just exploiting me. And indeed, maybe they were exploiting me from the get-go if their intent was to just get my money in without regard for whether I was going to get anything out of it."
A subscription with them provides access to the services they sell all the time as long as your subscription is current, in exactly the same way as as insurance provides risk mitigation.
You appear to be arguing that it's the subscription model that's the problem and not those who use it in an exploitative manner.
I'm not a fan of subscription models myself, which can be used in exploitative ways, but the fault isn't in the model, but in those who implement/administer it.
N.B.: I do have insurance, but not Netflix or NYT subscriptions.
[0] https://news.ycombinator.com/item?id=31818397
Edit: Fixed formatting, typo.
If you really can't tell those classes of product apart, I don't think I can help you.
Don't put words in my mouth. I never said anything even approaching that.
Netflix sells a service (a pretty useless one, in my view) -- video content -- for which they charge a monthly fee.
Insurance companies sell a service (more useful, in my view) -- covering (or at least reducing) the costs of bad stuff happening -- for which they charge a monthly fee.
One is (at least in my view) more useful than the other, but the business model is the same -- pay a monthly fee for some product/service.
As I said, it's not the model that's the problem, it's those who use it in an exploitative fashion.
Please do go ahead and set up another straw man you can knock down for your own satisfaction, but I won't participate further.
Have a great day!
I was inexact (business vs. payment model) in my previous comment. My apologies.
But my point still stands: Subscription payment models aren't inherently exploitative; rather they can be implemented/administered (or not) in an exploitative fashion.
Don't like Netflix/NYT and others' implementation of said payment model? I'm not surprised. I'm not very high on them either.
But just because you don't like the specific implementation, doesn't make them a different payment model. That payment model being: "pay a monthly fee, get whatever product/service you've paid (and continue to pay) for.
You appear to be claiming that because different companies sell different stuff, that the payment models are not the same.
Which is akin to arguing that since automobiles with ICEs[0] serve a different purpose than automobiles with electric engines. They don't.
And likewise, subscription payment models are subscription payment models, regardless of the product/service being offered.
>If you're not getting it, that's fine, you are free to carry on not getting it.
And you're free to continue making wildly inaccurate statements. Have fun and a good day!
[0] https://en.wikipedia.org/wiki/Internal_combustion_engine
Sure, but this doesn't describe all subscription businesses, plenty of companies have healthy margins even with active users.
No one is saying there aren't subscription businesses that abuse subscription pricing to get recurring revenue from what should be one-time revenue, leave customers locked into something they're not getting value out of, etc. but that's not a truism of subscriptions (even the traditionally shady ones like gyms!)
On some level yes. But recently banks here in Australia were busted for charging dead people.
https://www.afr.com/companies/financial-services/apra-punish...
Are you going to tell me the dead people are at fault for not taking advantage of services provided?
The point here is the relationship between (business) provider and consumer. It should be fair and balanced. No one is asking a business to provide services for nothing. But when the services aren't being used, the non-consumer shouldn't be charged either.
The only question remaining is - what is a fair way to go about this?
A reasonable time period of non-use before suspension of service seems ok. The business got money for nothing - but can't try to make that into a business plan.
Clearly businesses would rather have more "money for nothing" - so would everyone - but it isn't reasonable.
I also think there are systemic reasons to stop it. If you're running, say, a good streaming service, imagine a competitor coming along that makes a lot of use of dark patterns to get people to sign up and keep paying even though the value is much lower than your service. Now you have a choice: try to compete against a better-funded competitor or go for the same dirty money yourself?
As a society, we want companies to devote their capital and brainpower to making things better for customers that can freely choose the best products. And that's what most company founders want too, so that markets are competitive in fair ways and they can focus on the products that got them excited enough to start a company. So I think it's in the interests of everybody except the parasitically inclined to just rule out exploitative business models.
I also think pushing the risk of "the customer doesn't actually get anything out of it" onto the business is where the risk should be. Who better to understand and manage that risk than the people making the product and who have great masses of data on how it actually gets used?
The entire point of a subscription model is that a business can offer a steeply discounted price vs. pay-as-you-go in exchange for predictable, recurring revenue. That's the only way the model works.
In my opinion, that's the industry (at least here in .au) that are the poster-child worst example of dark patterns in manipulative subscription charging.
They are infamous here for doing fucked up things in an attempt to make it as difficult as possible to cancel your subscription. I had one friend who moved overseas, discovered his gym was still billing him monthly even though he'd emailed to cancel explaining they didn't have any locations in his new country of residence, and they tried to claim the only way to cancel his subscription was in-person at the location he signed up at. He had to lawyer up when he cancelled the credit card (and told them he'd done so), and they threatened to send his account to a collection agency. (On single lawyer letter got him a refund of all charges since the date of his original email saying he was cancelling, so they _knew_ they were legally in the wrong and wouldn't have a leg to stand on it of ever got to court.)
And it's all just such a waste for everybody. The first gym I joined was run by a very dedicated muscle-head who was at his gym a fair bit. You signed up for a fixed period, like a week or a month or a quarter. At the end of the period, you could renew if you wanted. And if you weren't coming to the gym often enough, he'd ask why you weren't coming. He believed in his product and wanted people to be successful at his gym.
But I'd guess part of the reason that doesn't dominate is that awful gym companies sucker people in, do everything they can to become credit card parasites, and then spend a lot of the extra money on marketing and on giving people good-looking deals that they know they won't use.
I also disagree that's the point of subscription models. If I'm on a month-to-month subscription, there's no legal guarantee the revenue is predictable more than 30 days out. That would be just as true if auto-suspend were required for non-use.
For most subscription businesses and SaaS companies, non-marginal costs are most of the costs. The pennies Netflix saves if you don't stream during the month are a pittance compared to other SG&A expenses like headcount and content production.
> I also disagree that's the point of subscription models.
What do you think the point is? Why would Jetbrain's move to a subscription model? Why does Spotify stream music and not sell tracks and albums? A subscription model is a fundamentally different business than one offering standard transactional sales.
But to me their arguments sound too much like blackmail "With this model there is incentive for us to make longer-lasting products which is good for the environment". Well, sure but if you actually cared about the environment instead of money you'd be doing that right now. Why do we have to pay them more for less in order for them to do this?
To me this really sounds like a "pay us what we want or we'll mess up this environment of yours even more" extortion scheme.
The older generation is more against it but they tend to not trust tech very much anyway. They're not the ones buying a new phone every year, they use it for many years and even get it fixed when it breaks.
But mullvad isn't targeting mainstream!
It's mainstream compatible, as-in not too hard to use, but that's it.
Also mainstream only cares about VPNs because they believe it does magically things, like somehow better protecting all your privacy even if you are logged into Facebook or somehow making account hijacking or banking scams less likely :/
That's why they will go anyway with VPN providers which do a lot of ad advertisement to make them subconscious feel like it's doing all this magical things (even if they never explicitly claim it). Like NordVPN (you probably know what I mean if you use e.g. twitch in the EU ;=) ).
So no point in competing for this users without doing things like a ad powered free plan, free testing month, and tons of dark-ish patterns.
Instead mullvad has I think a good idea about what works with their customers.
I think it still will cost them money (who hasn't forgotten to cancel and abo) but also might save them money (not having to handle anything in support related to subscriptions going wrong). And maybe with things like people pre-paying for a year, but stop using it after a few month it will also not cost them anything. Really hard to say. I mean it was also guaranteed to end up on HN, so free advertisement to exactly the right audience. That's worth some money, too.
I agree, this is precisely why they're doing this. Putting their customers' privacy over their investors' wallets. This is a big ballsy move IMO. They're buying a lot of goodwill here. And taking a risk.
> Also mainstream only cares about VPNs because they believe it does magically things, like somehow better protecting all your privacy even if you are logged into Facebook or somehow making account hijacking or banking scams less likely :/
Also totally agreed lol. I often get questions from friends about VPNs. Always have to explain that privacy really doesn't work if you willingly give up your data :)
And no I don't use Twitch so not sure what you mean there, sounds like an interesting story.
> So no point in competing for this users without doing things like a ad powered free plan, free testing month, and tons of dark-ish patterns. Instead mullvad has I think a good idea about what works with their customers.
Exactly. They're not doing a tunnelbear.
> I think it still will cost them money (who hasn't forgotten to cancel and abo) but also might save them money (not having to handle anything in support related to subscriptions going wrong). And maybe with things like people pre-paying for a year, but stop using it after a few month it will also not cost them anything. Really hard to say. I mean it was also guaranteed to end up on HN, so free advertisement to exactly the right audience. That's worth some money, too.
I agree it's ballsy, this makes me respect the gesture even more. It's not the 'done thing' in this day and age. But they're still doing it and for the right reason.
Too easy and lazy to blame this on some grand conspiracy. Reality is much more complicated, and cuts to heart of human behavior.
I think part of this is the free market which only really works on "MORE". More turnover, more customers, more products YoY. If you make a loss or invest in something for the common good a company isn't just frowned upon, they are putting themselves at liability of due diligence lawsuits. Most of the societal and environmental problems we are seeing stem from this, in my opinion. We need to fix the system before it's too late, not pamper to it.
I don't think there is a dark "SPECTRE" style gathering going on at Davos, no. I'm not a conspiracy theorist. However I do see there is zero incentive to improving the status quo if it doesn't make some rich people much richer yet again. This is why I see the WEF as a 'bad' entity, for promoting such things which are clearly undesirable. It's a very one-sided image.
For me as a tinkerer and maker the idea of renting my stuff and not being allowed to improve or repair it, is absolutely unthinkable and something that must be fought tooth and nail.