Lifetime Pricing Shenanigans In The WordPress World

Today, the folks over at ACF (Advanced Custom Fields) announced that they had sold the product to Delicious Brains – a highly respected company that is well run, with a ton of talented developers. This acquisition makes sense – the Delicious Brains folks’ product lines are squarely focused on developers and ACF is primarily a developer product.

Unfortunately, shortly after the announcement, folks with lifetime licenses found out that those lifetime licenses are now stuck on the version 5.x line and that they will likely not be given free licenses to future major updates.

Arrg.

Maybe the Delicious Brains folks will change their minds on this – they’ve generally been good stewards and upstanding WP folks in the past; there’s no reason to believe that they might not reverse course, especially if they start taking some heat. [Update: Delicious Brains has recanted their position and all updates to ACF will be free to lifetime license holders – twitter thread with the announcement here: https://twitter.com/bradt/status/1400488830063501314]

Regardless, this is not the first time that lifetime licenses were rescinded in the WordPress world (and in other software ecosystems as well.) Which made us start to take stock of the sheer number of underhanded ways that these licenses, which seemed like a good deal at the time, can be made worthless.

Here are the tactics that we know have been used in the past to make lifetime licenses worthless…

1. Sell The Assets, Keep The Liabilities

The easiest and cleanest way to strip owners of lifetime licenses of the benefit they paid for is to transfer the assets to a new company.

Basically, the assets are sold to a new company and the liabilities (which include the lifetime license obligations) are held in the existing company. Want to sue someone to enforce the license? Good luck – the new company didn’t agree to take on the lifetime liability and the old company have no reasonable assets that can be used to pay out on a lawsuit.

Even in the case of a genuine sale, by the time everyone figures out that they might be screwed, the funds from the sale have been paid out to the shareholders of the original company leaving behind a worthless shell.

In the most egregious case the new company is owned by the same shareholders as the old company!

2. Introduce New Premium License Tiers

For a long time Formidable Forms offered lifetime prices. And then overnight they effectively rescinded them by creating new license tiers where all their best new add-on features resided.

So, yes, you still have your basic lifetime license and you still had your add-ons that you purchased at the time. But the product features were effectively stagnant and, if you wanted all the new fancy add-on features that you thought you had paid for, well, you had to pay for it again in the form of annual licenses.

Other companies that offer lifetime prices have learned this trick and it’s a pretty common way to upsell lifetime license owners (both in and out of the WP world).

3. Abandon The Project

This tends to happen more often outside the WP world. But the tactic is simple – sell a half-finished product on a marketplace like AppSumo, pretend to offer support and updates for a bit and then gradually fade away, keeping the money and leaving the product unfinished and the users SOL.

Yes, this is an outright scam.

4. Misc Other Tactics

Caldera forms was sold to the company that owns Ninja Forms. Shortly after, it was announced that Caldera forms would no longer be developed. Lifetime users were left out in the cold or they could purchase a regular annual license of Ninja Forms.

Now, Ninja Forms could have just offered the Caldera lifetime owners a lifetime license for Ninja Forms and call it a day. If that had happened then you could have easily made the case that it was an acquisition, made in good faith, that just didn’t work out.

But that offer wasn’t going to be made because the whole point to the process was to convert those users to annual payers and I have to believe that someone, somewhere, in the acquisition process had this tactic in mind.

Now, imagine how many other companies can cash out by selling to a competitor and then the competitor can kill the product and move the users over to their own original product? I am actually surprised that this strategy hasn’t been used more often. Caldera-Ninja Forms is the only one I’m aware of so far.

It’s All About The Money

At the end of the day it’s all about revenue. Lifetime users do not bring any additional revenue so there’s no incentive to care about them. But, even in cases where you have annual licenses, companies find ways to really screw with you when you thought you were grandfathered into a nice, low annual price.

The most eggregious example of this is WooCommerce.

First it was an increase in the annual pricing – WooCommerce extension updates were usually priced at a massive discount to their original price. But then, suddenly, renewals started to occur at the full CURRENT price.

Later, the multi-site discount was rescinded and suddenly you were paying full price for EACH SITE.

In both cases, the price increase on a percentage basis was staggering but especially in that last technique.

To be fair, I believe users on multisite plans were grandfathered into their plans but nothing prevents the company from increasing the renewal prices of those licenses in the future. And if you aren’t paying close attention to your renewal you can easily find yourself with an unexpected massive price increase if your auto-renewal didn’t go through for some reason.

Legitimate Ways To Upsell Lifetime Users

Ok, so you’re a company that realized you really really screwed up when you offered lifetime licenses. How can you, perhaps, get more revenue from those users?

These days the answer is simple – cloud services. Figure out a really good cloud service offering you can tie into your product.

Or you could introduce a services component to your business.

If you’re a newer company thinking about selling lifetime licenses, then at least make sure you limit the period of support. Offer lifetime updates but limit the support period to whatever multiple the lifetime price represents (eg: 3 years.) Support is one of the biggest costs so limiting it for lifetime offers make sense.

Wrap Up

Ironically, it seems that the rescinding of lifetime licenses are happening primarily in products with large user bases. Effectively, the companies with the most revenues are also the ones looking to rescind these licenses. Smaller products such as Admin Menu Editor Pro and User Role Editor seem content to respect their lifetime license obligations.

Unfortunately, as other companies see the ease with which lifetime licenses can be rescinded I wouldn’t be surprised to see the trend accelerate. WPML? ToolSet? WP FORMS? WP ULTIMO? OXYGEN? EDD? METABOX.IO? These are some larger companies that might be tempted to figure out a way around honoring their lifetime licenses.

I know, I know, it’s heresy to even suggest some of these companies might be tempted. But then again, I never thought I’d see the day when ACF would fall into this camp. So never say never!

While it’s too early to tell, I suspect that the transition to the new Block Editor will cause some additional hits to lifetime license holders in a number of theme-focused offerings. As products such as DIVI becomes less necessary, they might feel the pressure to mine their existing user base for revenue to make up for the shortfall in new customers. Why would they not choose to rescind their lifetime licenses?

I still think that if a lifetime license is offered on a product for a reasonable price, it should be snapped up – but with the implicit understanding that it’s probably only going to be useful for a few years. On an amortized basis it’s likely that the cost would be less than a regular license so you win either way.

Automatic Notification Of New Articles

Sign up to get automatic notifications of new articles.  This is a different list than our standard list - you only get new articles once a week (usually on Mondays).  No other emails will be sent unless you sign up for our general list as well.

Posted in