> No - you can either pay for the option one-time up front (the article says), or you can pay a subscription. You don't pay for the option up-front and also pay the subscription.
That's not what he's saying. He's saying that BMW has already sold the car at a profit with the heating elements built-in, and then are trying to make more profit off of a software patch to enable a feature you technically already own.
If Apple offered you a $1000 iPhone with a camera app installed, and then offered you the same iPhone for $800 but which will not let any camera apps be installed unless you pay them $18/month, does that seem fine to you? They're already making a profit selling at $800, the hardware is identical, it's just a cost-free software change that you are not permitted to make to your own device.
> He's saying that BMW has already sold the car at a profit
How do you know how BMW structures profit and costs? I would guess their profit is based on some people choosing to enable the future.
> If Apple offered you a $1000 iPhone with a camera app installed, and then offered you the same iPhone for $800 but which will not let any camera apps be installed unless you pay them $18/month, does that seem fine to you?
Yeah - seems ok to me. I can pick what I want. Pay more up-front, or pay the same after purchasing, or pay a subscription, or don't pay at all. More choices for the consumer.
What's the issue?
Just the mental hurdle of having the option to paying to enable a feature where the hardware was already shipped? What's the underlying actual issue with that? I don't see one?
> I would guess their profit is based on some people choosing to enable the future.
They would not risk breaking even or losing money if people opted out more than expected. The base model with the feature disabled must be profitable on its own. It's just basic business.
> More choices for the consumer.
It's a false choice. Creating the illusion of choice is not progress. If I stood in front of your front door with a gun in hand and asked you to either pay a small fee every time you leave, or a large one-time fee to leave whenever you want, well, before I arrived you only had one choice and now you have two. Are you better off?
> What's the issue?
Capitalism generally drives progress due to competition, but it should be heavily criticised whenever it stunts progress. Simple as that.
Providing more features at the same or lower cost due to economies of scale is great progress. Artificially disabling those features with software to try and squeeze out more profit is not progress. No doubt they will also go after anyone who tries to bypass this software lock.
This is the same logic behind printer manufacturers trying to lock out third party cartridges and refilling. It's wasteful, anticompetitive and regressive, not progressive.
> They would not risk breaking even or losing money if people opted out more than expected.
Loss-leader. Allows them to advertise a low base price, but most people will pay more.
> It's a false choice
Lol it’s not - you can genuinely choose to never pay for it, to pay later, or pay up front. Those are all useful choices I can imagine real people exercising.
Why do you think it’s an illusion? Why is not paying not an option?
> If I stood in front of your front door with a gun in hand
It’s a car seat heater. It’s a luxury. Nothing as dramatic.
> Loss-leader. Allows them to advertise a low base price, but most people will pay more.
They wouldn't risk it in this case, for such a high cost item. It makes no sense for the marginal cost of the heater, the base price would just be marked above the cost.
> It’s a car seat heater. It’s a luxury. Nothing as dramatic.
Way to miss the point. Thought experiments are dramatic so as to make the principle obvious: just because you've increased the set of possible choices does not mean you've added value. That's the case with the thought experiment and with subscription seat heaters. That's why it's a false choice, the value has already been added by economies of scale, and BMW is trying to profit more without any effort by removing that added value.
As I already explained, we want innovation from effort that encourages progress, not profiteering from artificial scarcity. Skewed incentives that don't result in progress should be criticized and corrected.
Yes, it is cheaper due to economies of scale to include the hardware in all models, and the fact that they're selling it at all without enabling the feature means there's already a profit margin there.
That's not what he's saying. He's saying that BMW has already sold the car at a profit with the heating elements built-in, and then are trying to make more profit off of a software patch to enable a feature you technically already own.
If Apple offered you a $1000 iPhone with a camera app installed, and then offered you the same iPhone for $800 but which will not let any camera apps be installed unless you pay them $18/month, does that seem fine to you? They're already making a profit selling at $800, the hardware is identical, it's just a cost-free software change that you are not permitted to make to your own device.