I want a rent-to-own option for softsynths :)

[rifftrax]

do you have a point? you managed to say a whole lot about how you don't like the point i made, but you were so worked up you forgot to make your own.

I have a number of points. So here we go.

do you have any idea what the implications of such a rental system would have on the naics classification for the corporation or the liabilities involved? it may all be a wee bit more complex than you might assume.

WTF? LOL, you're telling me that by providing a payment plan to get software I've bumped my LLC. into a whole other required business structure? Pretty sure you're grasping at straws here. We're not talking about rentals, we're talking about paying for a time period of use of a plugin going towards a purchase. That's leasing.

in the end what is the developer going to get out of it? they get a steady revenue stream perhaps, but what if the buyer decides to end the contract at an arbitrary point? with a full sale that couldn't have happened.

Who in their right mind is going to get halfway towards paying for a plugin and then just stop? Maybe if they think your plugin sucks ass which just means they would have regretted their purchase in the first place and likely decided that you as a dev make shit plugins and that they certainly don't ever want to go blow an ridiculous amount of money up-front on a plugin ever again.

And yes, this is how consumers think. Consider a consumer that immediately pays full price for something and regrets the purchase. You do realize what most of that regret is centered on don't you? The purchase price. The higher the purchase price... the more potential for deep and lasting regret of the purchase. A payment plan never feels like a lump sum because it is manageable and spread out over too much time to feel like a significant outlay. I'm paying 14K over the next 4 years for the car I just bought. Do you think that at the end of 4 years I'm going to look back and be like "Goddam!!! That was like $14K" and get that awful feeling of dread where it dawns on you how much you just spent where your heart seems to dip into your stomach? No. Because I paid it over 4 years. The apparent risk is very low.

Let's take the same scenario, except where I pay $14K out of pocket in cash right there on the lot for the car. What do you think the potential is that I'll have some significant form of regret of the purchase that I'll go through relatively soon about the car? Very very very high.

Lump sum payments increases the chance for regret. Regret of purchase lessens the ability for a consumer to spend money in a similar way in the future. Of course, I shouldn't need to explain this to you because it's obvious you are a marketing and sales expert.

would you rather make a full sale at some point in the future, or start making part of a sale now?

Entire industries rely on something called "payments". Look it up, it's a pretty novel idea really.

And you bet your ass I would rather have some money right now as opposed to more at some arbitrary date in the future (and potentially none). Money is capital and time is money after all.

it seems to me in many cases, especially for audio software or other very low cost products this would be a bad decision long term.

Right, because opening the floodgates of potential for people to start paying for software they would otherwise never be able to afford is a really terrible thing. Let's say you sell a plugin for $500. Boom, you're already well out of reach of anyone making anything close to minimum wage unless they have some magical extra half grand to blow on anything. Do you know how many people make minimum wage in the United States? You do realize how many of these people are also aspiring producers? Hello?

a good decision would be a support contract including upgrades, although the complexities exist for that too at least you're going to be supplementing your usual income with a stream of revenue and providing not just a product but a service - something that isn't influenced by piracy for example.

No, I hate the idea of support contracts. F**k that stuff. I don't want to pay full price + even more immediately. What if the company folds almost immediately after? Then you're out EVERYTHING. At least with a payment plan you don't have to feel totally stupid if the company goes kaput right after you start paying for a plugin. A payment system actually enables more consumers to justify paying for the software. Hell, a 14 year old kid can pay $20 a month! His mom sure as hell isn't going to front his $500 in full for some expensive plug. So guess what? No payments? He'll pirate that thing. Think about it. I can't tell you how many young producer friends of mine pirate shit just because they literally can't afford it. I see it on a first-hand basis EVERY DAY.

With payments you remove excessive liability from the consumer. It has all the boons of a credit card and none of the liabilities. Everyone benefits.

No, I am not a developer of software... but I do work directly with a web marketing and design guru and a number of very talented devs every single day.

[aciddose]

you aren't taking into account the fact that YES, it would bump the classification and put you into all kinds of issues with the new filings you'd have to do. i'm not grasping at straws here, i'm just pointing out the tip of the ice-berg floating out there in plain view.

you also aren't taking into account how many plugins anyone would ever own if they could just lease one for an hour or two, then cancel that.

that's the most critical aspect in my opinion.

if we need to argue about proof of whether this is going to be something companies want to do or not, i'll have you look to the companies that are either doing it or not.

do you think that the current structure is the most efficient, or do you think people are paying too much?

in order to make the same income from a lease the customer would need to:
- pay a very significant consideration to deter short term leasing
- pay a much higher price once the sale is completed

consideration is usually in the range of 10-15%, with the same percentage for the lease. so we're looking at 30% higher prices for this "luxury". people who rarely use the software would benefit. owners would pay.

also you need to take into consideration the fact that in a lease you're not going to be considering 100% of your lease payments toward the final purchase. it's usually more like 20%. otherwise the purchase can be of the total market value at the time of purchase, but this agreement depends upon the market value depreciating over time which probably won't happen with software.

a support contract already includes this structure. you pay the "consideration" by purchasing the product as usual - only the company does not need to shift it's income into a new structure, it just maintains the old one. new upgrades are offered as long as you continue to pay your support fee on a monthly/yearly basis. in addition you get access to extra services.

this is the most common structure for businesses, for example.