There are many posts in these forums that pose the question of what happens to lifetime subscribers were Roon to discontinue operations. This is in my view the wrong question, relevant perhaps initially, but it has since been eclipsed by events and the community has not yet pivoted to the more cogent and current question, which is the title of this post.
Since their inception, Roon has continued to garner attention, praise, and market share (see Rafe Arnott’s February 8th piece in Audiostream https://www.audiostream.com/content/aqua-acoustic-formula-xhd-now-roon-ready as one of many recent examples). As a SaaS-company CEO myself, were I running Roon I would be considering the timing question on elimination of lifetime subscription pricing.
For an early stage SaaS business, the lifetime subscription model is an interesting way to raise cash quickly from operations, thus taking pressure off the need to secure equity or debt funding. Once a SaaS company passes the tipping point of adoption and awareness (as I would argue Roon appears to have done) there is little advantage to converting a new customer for a one-time fee versus the recurring revenue opportunity that subscriptions offer. Furthermore, the important metrics used for enterprise valuation of SaaS businesses are negatively impacted by lifetime subscribers – no doubt a consideration for Roon’s board or major equity holders.
The need to eliminate a one-time-fee option is particularly true in a finite market such as the one addressed by Roon, as there are today and will certainly in the future be a finite number of consumers investing in this type of product. Of course, these comments are devoid of any knowledge of long-term roadmap plans for the company Roon. Effective market expansion could take place with packaging, bundling, embedding, or stripping of the current technology. Roon leadership is no doubt considering all of these. The Nucleus was an example of getting into the appliance business and addressing complexity concerns, Roon’s willingness as a software company to try their hand in hardware demonstrates they’re forward thinking in this regard.
Given the above, I humbly offer two suggestions:
Suggestion for Roon: Be careful with the elimination of the lifetime subscription, but don’t wait too long to do it. The longer you wait the harder it will be to rescind – customers will become increasingly trained to expect it, something you don’t want. Furthermore, do not try to correct the business problem of a large percentage of your customer base with long tenures and lifetime subscriptions paying you nothing by clever packaging, ‘pro versions,’ ‘add-ons,’ or other moves that are contrary to the spirit of the lifetime subscription promise.
Suggestion for Roon Customers: Buy a Lifetime Subscription ASAP! The risk is low and the return high. It’s one of the great bargains in the audio world these days – in my view. Regardless of when/if Roon eliminates this as a pricing option, it almost certainly makes sense as a customer to purchase sooner rather than later.