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Back then, we achieved considerable cost savings by keeping our internet feed and dropping cable TV. Over time, though, we've added many streaming channels in order to get our favorite shows and we're spending about the same as we would with cable. At the end of the year, we're going to do our annual TV-streaming service audit and see what we can drop.
To be fair, the streaming-only channels are producing some truly exceptional content. It's another golden age for television entertainment: Paramount+ has Strange New Worlds; Apple TV+ has For All Mankind and Foundation; Disney+ has The Mandalorian and the rest of the Star Wars TV shows; and Netflix, Prime Video, and Hulu have excellent exclusive programs. In short, keeping up adds up.
Now, we're starting to see the same trend with video-streaming services in the world of AI -- many services, each with their own fees. There are two classes of AI you're going to be paying for in the coming years (if you're not, like me, already shelling out for AI right now). You'll be paying for standalone AI services, such as ChatGPT Plus and Midjourney, and you'll be paying for AI add-ons for any cloud service that can find an excuse to bolt AI on to their offerings.
In this article, I'm not going to look at the standalone AI services and their pricing models. Instead, I'll look at a few of the more traditional services we all use, and how they're pitching their AI add-ons to their existing users.
Show me the money
Coming up with a comprehensive list of AI upsells isn't practical right now. Many companies are starting to experiment with beta AI offerings, where they're seeing how much value they can add and how popular those add-ons are with users. But we do have some information on some of the most popular services, which will give you an indication of what to expect over the coming year.
Photoshop - Generative Fill credits
A great example of this trend is Photoshop. For the past four months or so, Generative Fill has been a free, new feature in Photoshop, as long as you've downloaded and installed the Photoshop beta release.
Although the tool has limits, it's still really useful. I certainly wouldn't want to have to give up Generative Fill now that I've started to use it. And there's the hook. Much like drug dealers are willing to share a first taste to get you hooked, the "first one's free" technique has long worked for software vendors.
Generative Fill is now out of beta and has been released in Photoshop 2024. The catch is that you can only use an undefined number of so-called "free" credits before you're charged extra. Now, let's be clear. Photoshop is far from free, so getting "free" credits simply means those uses come with the plan you're already paying for.
For now, one generative task is equal to one credit, so depending on what plan you have, you'll either have plenty of credits to play with, or not enough. Keep in mind that AI-based Generative Fill doesn't always generate what you want. You might have to take 10 or 20 tries to get it to play along. Each of those tries will use up a credit.
Effectively, Adobe is double-charging for its AI upsell. You're going to be paying more for the plan you're already using. And if you use Generative Fill just a bit too enthusiastically, you'll be paying for usage credits as well.
If you run out of credits, Adobe says you can still use the Generative Fill feature. It's just that it'll slow down your generation process. So, how slow is slow? I've no idea. As for buying new credits, the company hasn't been definitive on this, but my guess is it'll be something in the five-bucks-per-hundred-generations range.
Notion - AI adds up fast
Notion has a free tier, and back when I started to pay for it, the service had a $48/year tier, which was good enough for most work. That plan is no longer available, so a paid plan that includes unlimited uploads and custom database automations (which is worth it) is $96/year per user.
Worse, Notion may throttle your AI usage even if you're paying for it. Here's what its pricing Q&A says: "To ensure optimal performance and fair usage across all Notion AI users, your access to AI features can be reduced depending on your usage."
Office 365 - $30/month for enterprise users
Microsoft has been touting its Copilot service for Office 365 users. It uses the same basic large language model found in the Bing AI tools.
Unfortunately, there are two gotchas. First, it costs an additional $30/month per user for enterprise and business plans. And second, users of individual or family Office 365 plans don't have access to the service (at least, not yet).
Google Duet AI - $30/month for business users
Microsoft and Google appear to be in lockstep when it comes to office AI assistant plans and pricing. Google also intends to charge $30/month per user.
Divi, with all its features and capabilities, is $89/year. The AI add-on, Divi AI, which does text and image generation, is an additional $18/month. Yeah, the main product is $89/year, but the add-on alone is an additional $216/year.
Some other products
I took a quick look at a few other familiar products, to see their pricing approaches for AI.
MailChimp: MailChimp, the email marketing company owned by Intuit, has a whole series of AI tools. Right now, they're in beta, with no pricing details.
Evernote: The struggling note-taking company was recently bought out by Bending Spoons (yeah, I know, head scratch on that one). In April, the company announced AI beta features and a price increase.
HelpScout: HelpScout, the customer support cloud service, is now offering AI features. So far, there's been no price increase. In an email conversation with the company, I was told that the company currently plans to fold AI features into its main price offering. Whether that price will go up or not remains to be seen.
The bottom line
Let's acknowledge one very important fact about generative AI: it uses a lot of computing resources. Providing generative AI is not like adding just another feature. It's a very big challenge to build something that provides universal value.
Companies offering AI services will either need to build out the technology and infrastructure themselves, or license it. Either way, offering an AI upsell isn't a cheap endeavor. It's going to cost the vendors money.
But will it cost the vendors as much cash as they're asking? Right now, the answer depends on the vendor. Licensing API calls from companies such as OpenAI will have a far more predictable cost structure than vendors who choose to build out their own AI infrastructure.
Even so, I don't think the current trend of two-to-three times the cost of the main service for the AI add-on is sustainable. Cloud spending is already through the roof. My cloud services budget is crazy, and I run a two-person company.
Expecting customers to double or triple their cloud expenditures to gain access to AI features will probably break down over time. Right now, customers are likely to spend more for major features, but cloud services are competitive. I'm sure we'll start to see some services bake in AI pricing. We'll also see the cost of entry to AI services drop.
While I'm sure companies will try to sustain their AI upsell revenues, it may not hold.
For me, personally, I'm not buying any of the AI add-on services. I pay for ChatGPT Plus and Midjourney, which covers me nicely for text and image generation. If I have to, I'll probably pay for Photoshop credits because I've been a Photoshop user since before the pyramids were built, and it's a big time saver. But beyond that, none of the add-on upsells will get my money, at least for now.