[blinzy]

If that company, the one that develops DaVinci Resolve, only produced software, would that model of £200 fixed one-time payment be sufficient to be financially viable?

Let's say the company's headcount to develop/maintain such software, plus a bunch of other required roles such as marketing, sales, hr, etc., is around 25 people averaging £80,000/year each (not that far off considering employees cost more than just their salary) to make it an even £2 million/year.

That means in order to not go bankrupt, i.e. break even, they need to sell 10,000 copies to new buyers every single year. Is that realistic? I don't think so, a company that tries that model will soon go in the red because we aren't even considering other costs that a company has, which aren't negligible. Even if you cut the estimate above in half, e.g., let's say they cost £40,000 each instead, that's still 5,000 new buyers of the software each year.

In contrast, a subscription model of £100/year requires them to have 20,000 ongoing subscriptions, which is substantially easier to achieve. I believe there's a reason that a lot of companies have shifted/are shifting to a subscription model, an alternative being monetisation models such as advertisement-supported programs.

[yakubin]

Other companies which sell (only) software based on one-time payment model:

- ACD Systems (ACDSee)

- Serif (Affinity)

- Freron Software (MailMate)

- Sublime HQ (Sublime Text)

I use them all. Wouldn't pay for a subscription. I don't want a service. I want a product.

I also pay for services, but for other purposes: mail (Fastmail), online bookmarking (Pinboard), music streaming (Spotify, mostly for discovery; after I discover something I like, I usually go and buy it to have it myself), VPN, VPS. If there existed a decent video streaming service, I'd probably pay for that as well, but there isn't any.

[blinzy]

I'm not saying it's impossible to sell software with one-time payment model, I'm saying it's noticeably harder. There's always going to be companies that make do with such business models, but what's the ratio of successful companies with one-time payment out of all companies that have tried that? How does that compare with companies that go for subscription model (or ad-supported model)?

And are there any behemoths (i.e., hugely profitable companies) that do one-time payment software? Because as far as I know Microsoft would have been one of the few or only such cases (and obviously it only applies to a subset of their products, many others are using other business models) and they are also moving towards a subscription model, e.g., for Office, which considering they probably have a legion of financial analysts, accountants, etc. I assume they have done their due diligence to figure out it's worth it.

[Gordonjcp]

As I said most of their money comes from cameras. £2M per year would be a couple of thousand cameras, which feels like a fairly easy number to hit.

[blinzy]

Yes, I know you said they do sell hardware and that's probably how they survive.

If you look at my comment I said "if they only produced software", because I wanted to use it as an example (just from your £200 figure) with back of the envelope estimates to show why many companies move to subscriptions, because if you have a niche product, having new customers in the thousands or tens of thousands every year is incredibly difficult compared to having a reliable set of recurring customers with subscriptions.