This Julia Timoshenko…?
Super helpful, thanks. I thought I’d gone through the site, but realized that once I’d started my trial I hadn’t gone back to look. Durh. Appreciate the pointer.
Here’s what I gleaned:
- Five years old
- 40 person team, geographically distributed
- bootstrapped[?] “invested our own money” / “don’t spend money we haven’t earned”
- growing but slower than they could if they threw everything they could at it
- “prioritize lifestyle”
So let’s assume that’s all right, and trust me - those are all good things… but my big question (and this is not something I’d expect they’d let me know) is whether they get enough annual/monthly subscribers to really have recurring revenue that covers their costs. When they add a lifetime sub (and I bet a big portion of us on the forums are lifetime subs) they get all the revenue they’re ever going to get from me up front. So they get an infusion of cash, but there’s one less person they’re going to get (the pool of potential customers is smaller). Right now this might be construed as a niche product. And so the question is whether they can create a broad enough appeal product to charge people monthly on an ongoing basis that they can continue to fund supporting me. All the above stuff makes me more likely to assume the near term is fairly rosy (especially with a pandemic bump), but in a sense I wonder more about the long term. Got to build a spreadsheet model with some guesses
Now that I have read this thread, I swear I will not buy anything in my life and I will keep the money in my pocket (not at the bank, because I do not have the staff list and the bank’s financial reports)…
Perhaps, but I suspect that lifetime subscribers are a small percentage now of the roughly100,000 subscribers. Roon labs themselves don’t see the lifetime sub being offered for ever…
I do too, and after reading the post linked below, I decided to stick with the $120/year subscription. I was not using Roon five years ago, and I’ll be (pleasantly) surprised if I’m still using it five years from now.
As long as Roon Labs continues to deliver service that I value, I’m delighted to keep renewing my subscription. It feels good to not be financially locked into the platform and to support their work, much like supporting artists whose music I enjoy.
In particular, I draw your attention to this bit:
The lifetime should not be an aspiration for Roon subscribers. It hurts us as a company and is not a viable business model for our future. If the price increase has reduced demand for lifetime subscriptions, that’s a good thing for our business.
It’s unlikely that we’ll offer a lifetime option forever. If you enjoy Roon and believe in what we’re doing, the best way to support it is to subscribe annual. We will do our level best to earn that support for many years to come.
The annual is STILL $119 for a year. That’s $10 a month. If Roon isn’t worth $10 a month to you, then we are doing something wrong and you should go elsewhere. It certainly brings me more joy than $10 every month, and our business vision is to do the same for every one of our subscribers.
That is super helpful. Thanks for bringing me up to speed. The fact that they are using a phrase like “junk food” makes me think that they have their heads screwed on with the correct threading.
The second thread you pasted that outlines their belief that the lifetime model hurts the company and is not sustainable means they get this. So I’ll be surprised if there aren’t more price increases on lifetime coming. Got it.
All good news that that philosophy is publicly acknowledged. Would still like to figure out revenue guesstimate and costs, but I’ll do that in private
I didn’t purchase a life membership and instead went with yearly subscription for the reasons you have outlined also as I thought another product might come along that I preferred, been with them for 4 years now, ops should have purchased a life membership
Do what’s most advantageous for you and your situation. But I encourage you to include in your analysis the fact that Roon becomes less useful after Roon Labs is no longer around to support it. An annual (or monthly) subscription does not guarantee that Roon will be around forever, but it helps.
I’m 70 !, lifetime to me = 6.6 yr , ie 77 , I am already going deaf ?
But seriously 120 a year is not excessive and leaves the flexibility I need. It also provides a steady income stream for Roon to manage
Imagine if there was only lifetime , a massive influx of money then “nothing’” that’s not a good business prospect
Everything else in my life is monthly or annual what’s the difference , your gamble drops to $120
Ill be surprised if it lasts out past 2020
I feel the lifetime offer does raise concerns for some of company stability. To me it is a form of increasing cash flow for startup purposes.
Personally, I would like to see it go away and use a K.I.S.S. pricing model. Not even an annual price. Just 9.99 a month, cancel anytime. It would attract more users as they have no risk. A model that is used by most credible companies.
My guess is they do about $8 million in annual sales. The say they have 100,000+ subscribers. Not likely they are all paying $120/year. Take out lifetime subs, and I think they also have a perpetual license embedded lite version with Elac or somebody. There are likely comps for friends, family, business partners, manufacturers, industry types, etc. So, likely less than than $12 million. If 70% of subscribers are paying annually that’s $8.4 million. So it could be more. Or less.
Another way to look at it is revenue per employee. Industry average is probably around $200K per employee. So if they have 40 employees that’s $8 million.
Nucleus hardware sales would add to their overall revenue. Hard to guess how much. But even with roon’s premium markup the gross margins are likely thinner than the software side.
Anyway, the real answer is who knows? And as you note, they aren’t obligated to tell us. But just back of the envelope guesstimating suggests they have a nice niche business. They could be making a decent profit, depending on back-end infrastructure and licensing costs, which are likely much higher for software like roon as compared to other music playback software.
Take a look at the new pricing page - monthly is there as well as an annual subscription
Roon Pricing - Starting From $9.99 / mo | Try It Free (roonlabs.com)
Yes I saw the addition of the new monthly pricing. That is the only reason I signed up this time as I have been sitting on the fence for some time. Still, the lifetime option should go away for good as it raises concerns and is always an unwelcome topic on the forum for most. Should not be a problem if Roon does not need the extra cash flow.
Agreed. I can see a case for making Lifetime an option exclusively available at the time of purchase of a new Nucleus/Nucleus+. Roon Labs might even lock the subscription to the hardware ID, making it non-transferable (limited to the lifetime of the device itself). Probably not worth the development effort for Roon Labs to do so, but I can see why Nucleus owners would prefer lifetime. The Nucleus becomes an expensive doorstop without an active subscription…
Because it’s built on commodity hardware, it doesn’t. Just run another OS…
Remember it’s a well built and pretty looking fanless Intel NUC…
Plenty of potential uses.
I suppose that’s technically true, but $2.5k for a 7th generation i7 NUC to use as a generic PC is pretty terrible value for money.
Essentially, my point was that the Nucleus does not make much sense without a Roon subscription. As such, a lifetime option that’s exclusive to Nucleus owners might make sense.
But a it is your choice to buy a Nucleus or to buy a NUC and install ROCK. I consider a large part of the Nucleus offer is a service of convenience. Not a hardware purchase only. You are right that it is a high price when you do not want to subscribe to Roon. But the same applies sort of with printers or CDs. If you are not willing to buy CDs a CD player is a total waste. If you are not willing to buy toner, ink, your printer will be a waste.