Thursday, July 21, 2022

Microtransactions? I call macroridiculousness.

It is unlikely that I will ever own another car in my life, but in 1999, when I purchased the last car I will ever own - a New Beetle - I was delighted to pay a few bucks extra for heated seats. 

Getting into my car after a long day at work, for a long cold winter's night drive home, there was nothing better than the comfort and joy that having a heated seat brought me. 

I can't remember what I paid for heated seats, but it was worth it.

BMW, of course, offers heated seats, and I'm pretty sure that all BMW owners opt for them. After all, if a lowly VW owner wants a little warmth on her back, I can only imagine what luxe cars owners expect and demand.

But in some countries - Germany, UK, New Zealand, South Africa, South Korea - you can't just pay a one time charge for the privilege and pleasure of a heated seat. You need to pay for a monthly subscription, under a model called charging for microtransactions.

Say what?
A monthly subscription to heat your BMW’s front seats costs roughly $18, with options to subscribe for a year ($180), three years ($300), or pay for “unlimited” access for $415...

BMW has slowly been putting features behind subscriptions since 2020, and heated seats subs are now available in BMW’s digital stores in countries including the UK,  Germany, New Zealand, and South Africa. It doesn’t, however, seem to be an option in the US — yet.
Other features that BMW is locking behind subscriptions (as per the company’s digital UK store) include heated steering wheels, from $12 a month; the option to record footage from your car’s cameras, priced at $235 for “unlimited” use; and the “IconicSounds Sport package,” which lets you play engine sounds in your car for a one-time fee of $117. (Source: The Verge)

Did I already say 'say what'????

If it's uploaded, stored, and accessible in a BMW cloud, I can see charging for recorded footage. Sort of.

But for a feature that's part of the car that you've paid to have installed, and that has no ongoing service component that costs BMW anything, all I can say is SAY WHAT?

I understand that companies want recurring revenue. Who doesn't like a nice, predictable revenue stream?

But what's next? Charging for rolling down the windows? Beeping the horn? Opening the trunk?

Sure, BMW owners can afford to pay on an ongoing basis to have their tushes warmed. What's an extra $18 a month for that? Or an extra $12 a month to put your hands on a warmed steering wheel. But why should they? Paying on a regular basis for something you own that has NO ongoing costs makes no sense to me.

It reminds me of a model that one zany software company I spent many years at tried to institute at one point. It was something that I believe we called "value pricing."

The theory was that companies would pay us for app building software that we (geniuses all) built and, on top of that, pay us a cut of whatever money they made with the applications they built using our software. 

For a while at this company, my job was writing "stuff" - businesses plans, investor presos, internal whatevers - for the company's chair and vice-chair (a couple of eccentric geniuses if ever). 

I don't think we ever got around to actually building the app-building software, but as I recall it was going to be called the Experts Factory, and we were going to embed all sorts of vertical-specific features that would make it easy-peasy to build apps for specific verticals. (Got it?) We were going to have one for financial services and another for maritime logistics, two areas where we had in-house expert geniuses on our staff. 

This was 30-ish years ago, and that zany company was an agglomeration of tiny software companies that were focused on core technology and/or a vertical market. At some point, the investors decided that, despite our best attempts to explain how the concept made sense, it just plain didn't. And they broke us up into pieces. I stayed with the main event, but the other little companies broke back off. I just googled and that maritime logistics company is still around.

Every time I sat down with the chairman to cook up a business plan or preso, he would whip out a piece of paper and sketch out his value pyramid that "demonstrated" the value pricing model he was hell bent on selling - if not to actual customers, then to potential investors. "We need a slide in there that shows this." I would argue back that no one was going to pay us a cut of what they were creating with the tools we sold them, any more than a carpenter was going to give Sears a cut of the sale price of a house he built using a Craftsman hammer.

Sometimes I'd leave the slide out, and sometimes he didn't notice. Most of the times he did, but never seemed to remember that he'd already told me to put it in.

Maybe the world has changed since then. Maybe people will be all in on paying for microtransactions that cost the provider nothing. But I call macroridiculousness. (And once again, I say, SAY WHAT???)



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