Comment by earthnail

I wasn't trying to trash-talk consumers, but I was trying to be as clear as possible on how consumers behave to give good business advice.

A lot of consumer spending comes from motivation. Purchase intents come in burts, an "alright I'm gonna commit, I'm gonna do this" moment. As a consumer app developer, you really need to understand that. Some of your users might use your annual sub for five years, some only for one, some for two. If your average lifetime is 2.5 years, a lifetime price that's 3x the sub price gives you more revenue - and revenue upfront - than a sub. Subs are fantastic because they give you predictable recurring revenue, which is worth a lot in the long run (which is why Wikipedia prefers monthly donations instead of larger one-time sums, for example), but if you're getting started, cash flow is everything.

Consider how much software and goods you bought that you thought you were gonna use but then never touched. The $1000 music software bundle from Native Instruments you bought because you thought it would finally bring you to make music? That guitar you bought because you really thought you'd play it? The home gym equipment so you'd finally do some sports? These purchases came from a commitment "I'm gonna do it", and statistically speaking, most people don't follow through with this commitment. A monthly payment for these things would've been much, much cheaper for them. "Oh, but if I own it I can always pick it up again", you say? Who's stopping you from resubscribing if you want to? It's purely emotional.

There are tons of books on purchase psychology; this applies all the way to owning vs renting a flat.

The mistake many developers make is not factoring in how highly people value perceived security of one-time purchases. Offer a lifetime option, and price it accordingly. It's much easier to upsell people while they already have a purchase intent than to resell them your app every year when the new subscription bill comes in. Even if, statistically speaking, it would be much cheaper for most of your users to choose the annual subscription, you will end up with happier users if you offer an expensive lifetime option, and you will end up with more cash in your company. Everyone wins.