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This is a common meme, but unless you are privy to the company's internal financials, you really can't say whether a paid subscription model is more sustainable than others. Just ask newspapers and magazines.

There are many products and services I've paid for that are no longer provided.

Sometimes companies even cancel profitable services that are a distraction from their core business.




Having run a couple of companies both with and without an income stream judging by that experience I strongly believe that companies with an income stream are generally speaking more solid than those without. Yes, of course there are odd ducks but as a general rule it is a pretty good one.

And given that this is their core business I don't see them canceling it any time soon.


But is adding this subscription a sign that their previous subscription and other revenue efforts are insufficient, and therefore they are flailing for a viable business model and going under in N months unless this really takes off?

Or is it a sign that they are being conservative and responsible and taking the long view on their finances?

You simply cannot tell from the simple fact that they are adding a subscription option.

Edit: If Google or Facebook added a paid subscription model, would you say: "Paid subscriptions are a really good reason to start using [google/facebook] because it promises that they'll be around in the long run."? Would you interpret that to mean they were likely to be better off in a couple of months?

Profitability is the critical factor, not revenue. The Pets.com CEO /bragged/ about $45 million in revenue - with a loss of $150 million...


> Edit: If Google or Facebook added a paid subscription model, would you say:

They both do, they sell the ads and users data


No, but you can tell that if this gains adoption that they will be better off than they were last week.


Just ask newspapers and magazines.

They never made the majority of their money from subscribers. They made it from ads. And ad revenue has been under heavy assault of late, while publishing has been moving increasingly to the internet and away from the dead tree version. Your example does not really support your statement.


It absolutely supports the statement: where does the majority of gitlab's money come from?

Their strategy page (https://about.gitlab.com/strategy/) suggests that these subscriptions, at least for some time, will be a small part of the revenue (enterprise customers being the larger revenue source).

So with these subscriptions being a supplemental revenue source, it's pretty apt.


Have an upvote for supporting your POV, but I am not convinced that detail makes it apt.

Publications made money primarily from ads. A subscriber base was valuable for being able to prove audience size. Then ad costs were tied to that. Having enterprise customers plus individual customers is fundamentally a different model.


No, but I can tell that a company with a subscription model is more sustainable than the same company without.




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