Plex just announced an increase in their lifetime membership pricing. I bought a lifetime “Plex Pass” about a year ago when it was $150. I used enough of the features that were behind the paywall (for me, mostly live TV DVR, which I like to use from time to time) that $150 was worth it. They have a couple of smart features they put behind the paywall (the aforementioned DVR, and streaming to devices on the move)that made the $150 price worth it.
But, lifetime memberships are rarely worth it to the company offering them, if they have ongoing server costs.
I’m sure Plex understands their customer lifetime value. At monthly pricing of ~$7 and annual pricing at ~$70, and a conservative split of 25/75, assuming everybody finishes their year on monthly pricing (which is unlikely), they would take in about ~$73/year from each customer. In reality, for monthly users, it’s probably more in the ballpark of 9 months of paid usages (lots of users leave after month 1 or 2, a bunch stay for all 12 months, averaging out to about 9 months). At 9 months (which is good monthly subscription retention!), that ~$73/year number drops to about $68/year.
That means when I bought the lifetime membership, they made about 2.25 years of revenue from me. That is almost certainly less than what they have as an average customer lifetime value, which is probably more in the ballpark of 3.5-4 years (so ~$275).
Today’s lifetime pass of $250 gets you right in that ballpark. It means that, for every user who buys a lifetime membership today, Plex probably nets out around vs. the average customer. In exchange for getting paid that money up front, they’re betting that a lot of customers will not be actively using the features that require cloud usage after 3 or 4 years.
It’s still probably a, generally, losing proposition.
So, moving it to $750 was a bet. It’s a bet that most users will simply look at it and say “nope, I’m not going to pay for 10-11 years of service up front”. By keeping the lifetime pricing around, Plex gets to take cash in from people who really do want to pay up front and not have a subscription (likely an infinitesimally small number), and get to keep that pricing on the website to make the monthly and annual pricing look comparatively attractive.
Will it work? Hard to say. Plex is likely getting hit with some negative PR , but I’m guessing that blows over. The die hards probably already bought a lifetime membership, or ducked out to other solutions when the rate went up to $150 or $250. A few months from now, people go to the website and say “oh, I can pay $70/year. Much better than $750” and they click the button.
Why offer lifetime memberships at all? Well, honestly, if you’ve got ongoing costs, there’s not really a good reason to. I think Plex initially did it when they didn’t have much in the way of server costs, and they could price it attractively such that lots of users would pay up front, Plex gets the cash up front to fund operations, and everyone is pretty happy.
When the service started to evolve into being more cloud based, and the cost to service customers started to increase (and has ongoing costs, not just one time costs to build software), the lifetime membership becomes less and less attractive to the business. Hard to put the toothpaste back in the tube, though. Plex ends up keeping it around, trying to find the goldilocks zone of pricing it high enough to make it worth it to Plex, but low enough to continue to be attractive. The operating costs have clearly changed enough that it’s no longer viable, and now Plex has jacked the price up to this 10-11x annual pricing spot.