Thoughts: Philips Hue to start requiring a password

As far as I am concerned, this is barely newsworthy.

My thoughts are simple; no matter how much a smart home vendor charges upfront, if they are not charging you a monthly subscription today, they will do one of the following:

1. Find a way to monetize your data
2. Switch to a paid model later
3. Exit the business

Even if the upfront cost is enough to fund the services for years after the product will die, companies have investors and boards and those people want to see both recurring revenues and hopefully growth.

Making you sign up for an account ensures that usage data can be linked back to a specific user. That data can then be used by Philips directly to attempt to increase their sales, or they can anonymize it and sell it.

This is honestly the least offensive of the above options in my opinion. That doesn't mean I like it. But it is the path with the least amount of friction and most users at this point are OK with people selling some data to make a service free. Though, I would argue that the service was never truly free. Hue smart bulbs are among the most expensive. And while they are a good product, the price difference between a Hue bulb and an Ikea bulb is not made up for in hardware or manufacturing costs.

In short, you're paying a premium, partially to increase profits and partially to fund the API.

The only thing which really frustrates me about the Hue model is that they were deceptive. Since they maintained their old model for years, I would say that in the beginning they were primarily deceiving themselves.

This sort of thing is also a big part of the reason that I switched to SkyConnect instead of Hue or Tradfri (Ikea). I've paid my price for the hardware. I have the know-how to self host so I'm lessening the burden on their services while also eliminating my dependence on them. 

It is a two-pronged strategy. I'm increasing the direct benefit that they get from my purchase which increases the odds that they stay in the game longer. But, should they change their policy, go out of business, etc... it doesn't impact me. My devices aren't a part of their ecosystem any longer.

This is also why I prefer Ikea's strategy. They don't have a whole lot going on with external APIs. The devices are pretty much only managed from within your local network. As such, they have exposed themselves to much lower operational costs. I think that they are one of the few entrants into this area who have really considered the operational impacts to both themselves and their end users.

Philips with Hue in my opinion, did not. While the prices were higher they were also one of the earlier entrants. This meant that while they enjoy good margins now, they were much slimmer when they started. A smart move? Lock the remote API control behind something like a $1/month or $10/yr paywall. This is MUCH more than it costs per user, but low enough that regular people might actually consider it. 

Which brings me to my final gripe. The people in this sphere who have had subscription services... have been outlandishly expensive. With the exception of companies like Nabu Casa, all of the other entrant have another core business which ALREADY requires them to have a domain, website hosting, etc... which is why the $1 a month is more than enough to keep the business viable.

BTW, on the topic of Nabu Casa, they don't have a huge product line or existing business to pay for the infrastructure overhead so it is more than reasonable to expect them to charge a bit more. It is also used as a way to help fund Home Assistant development. I tend to look at it more like a Patreon sort of offering, but where you get a service out of the deal as well.

That being said, I still kind of wish that they would target a lower price or provide a tiered option. At $8.70CAD/month I'd rather make a onetime donation than subscribe. Given that I already pay for internet for other reasons and have a number of home servers already running combined with the know how to self-host it is a steep price to compete with "free" for most of the same features. $100/year is a "not-insignificant" amount to pledge largely just to support the cause. But maybe that is just me.