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Kagi – Introducing Fair Pricing

Kagi – Introducing Fair Pricing

104 comments

·February 5, 2025

dirkc

This makes sense, if someone isn't using your service for a month, chances are good that they are going to cancel soon. Maybe they'll keep on paying for another few months, but if they're not using it, they're not getting any value from it.

So rather than getting them to cancel, pause their subscription. You don't have to deal with cancellations, and if/when the user does return, you are one step further than you would be with a new subscription.

Furthermore this generates goodwill, and I'm guessing goodwill has some % that converts to conversions and lower churn.

fnord123

More importantly you can tell investors you have even more accounts than you do and your churn rate is very low.

thih9

Plus, you get to stay in touch and advertise via a monthly email: “You didn’t do any searches so we’re giving you next month for free, here are all the cool things you could do:…”.

eviks

not unless said investors demand better metrics like active user count...

vincnetas

Just recently i was actually thinking about this pricing approach for netflix, apple arcade or whatever else. Basically i use it so rarely that i could just subscribe when i want to watch anything, and unsubscribe immediately. This will enable subscription till end of billing period (one month). Then when i want o watch anything again then i will repeat again. And now kagi has implemented exactly this but automated from their own side. Im subscribing just to vote with my wallet.

Hopes that netflix or any other provider will implement this are small though. Because it's free money when someone pays for service and does not use it.

tedsanders

5 years ago, Netflix started proactively cancelling inactive accounts. They lose ~$10M/yr from this, but it's the ethical thing to do. (That said, I'd like them to use an even shorter window than 1 year of no activity.)

https://entertainment.ie/on-demand/on-demand-news/netflix-ac...

paranoidrobot

Slack does, or did, do this. I believe Trello, too.

I found out about this because I noticed our Slack bill was quite a lot lower over some Christmas/January period. It was because so many folks were away, and so they didn't charge us for seats that were inactive for > 30 days.

idle_zealot

> Hopes that netflix or any other provider will implement this are small though. Because it's free money when someone pays for service and does not use it.

Right. This is the sort of pro-consumer practice that is obviously morally right, but will not be widely adopted without consumer protection laws. Outside of small, niche businesses like Kagi, there is no pressure to treat customers with respect.

beAbU

Not just free money. I'm pretty sure the lions' share of any streaming service's income is from users that are subscribed but don't consume everything for that month. Their business model relies on this.

aimazon

I think this is a vast overestimation. The majority of people notice every payment they make every month, a Netflix subscription is a choice that they would not continue to make if they were not using Netflix. Those of us who can afford to pay Netflix whether we watch it or not are the minority of wealthy people. I think you would be surprised to learn how many normal people juggle different subscriptions by cancelling/subscribing each month.

larusso

Isn‘t this the classic gym subscription example? How many people have a subscription and actually don‘t use it. There is an episode of Friends about that.

About the fair pricing: Would love to have this also for my car lease ;) But more on a weekly bases.

pcthrowaway

Gyms get you by making memberships cheap and easy, and cancellations incredibly difficult.

The flip side of that is that only a small fraction of their members could actively use their memberships or they wouldn't have enough space. The active members get their membership effectively subsidized by people who don't use their memberships.

Apparently up to 50% of a gym's sign-ups happen in the month of January due to new years resolutions, and January/February are the busiest months as a result, though the majority keep their membership even after their resolve to go tapers off.

dgoldstein0

Gym memberships are also a thing people think they should have more than they actually desire to use them. So many people want to be healthy and get in shape, but aren't committed to actually doing the work. So when it comes time to think about cancelling plenty of people keep the gym membership because they think theyshould use it but then don't make the time.

Whereas Netflix and other streaming? It's so easy to just stay in and binge watch. The logical thing to do is cancel when you aren't using it to avoid paying year round, but they bank on the combination of laziness (takes effort to cancel) and ease of use - if you watch even just once or twice a month it starts seeming worthwhile.

And I'd bet most users still make them money. There's a huge fixed cost to setting up a giant content streaming service like Netflix, and to acquiring their content catalog, but they've hyper optimized the distribution so I'd expect all but the heaviest users make them money. And with ad supported plans, watching more would mean they get to serve more ads and make even more money.

vasco

I'd say about a good 25% at least of the global SaaS revenue is dormant "gym" accounts by now.

quser1

that's called car rentals :)

larusso

Yes but I want the car in front of my home :) I understand the concept that I pay also for the luxury to drive around whenever I want etc. It was more a musing ala eat the cake and have it :)

I see lots of short rentals that just idle on the street for days sometimes. Here the provider pays of course (and I assume it’s not in their interest).

import

You’re the main income source for the Netflix :)

ajdude

Unfortunately, I will never be able to take advantage of this policy, For the very reason that I have kagi Set as my exclusive search engine on every single device that I own, And there's no way that I could go even a Day, let alone a month, without using this fantastic service.

Keep up the good work guys!

user3939382

My pitch to friends is that it’s like Google used to be before they started adding all the crap to their results and ignoring your search terms.

Really, it’s even better than that given the full feature set.

nmstoker

I'm in exactly the same situation as you.

I would really struggle going back to not having bad sites suppressed in search results!

efitz

Kudos for adopting a user friendly billing policy.

I would love to see the FTC mandate a policy that prohibits automatic renewal billing if the service hasn’t been used for some time.

camhart

You're assuming there is no cost to the business when the service isn't actively being used. Thats not always the case.

mcintyre1994

Could you just give the option for them to delete the account if they want to at the same time? I assume most wouldn’t want to, but if it costs them money to keep inactive accounts then they can choose to. Out of interest what sort of services were you thinking of there?

globular-toast

Well they specifically said "renewal" so the business just wouldn't renew them and therefore not cost them any more money.

Obviously some services like insurance or storage don't work like this, though. I don't want to use them, but I want them to be there if I do need them.

fastball

[flagged]

grayhatter

What a needlessly toxic take.

> People who can't wake up without an alarm, should be late for things.

> People who are busy, clearly need to be punished!

> Punishment is the best way to change behavior, it's why I always hit my dog!

> Humans are better at remembering and scheduling things than computers are, obviously we should require humans do these types of things even when it would be trivial to do so programmatically.

> I can punish someone, so I should be allowed to!

Or... you could not be a dick, and go, huh, that would be a very nice thing to do to help out your fellow human! I'm glad someone else is willing to help someone else out just because it's the nice thing to do!

> Giving people a free pass for not paying attention to their own finances is exactly how you end up with people that are even worse at managing their finances than before.

[citation needed]... because I'm pretty sure you just made that up, and it's not true at all.

nicce

> > Giving people a free pass for not paying attention to their own finances is exactly how you end up with people that are even worse at managing their finances than before. [citation needed]... because I'm pretty sure you just made that up, and it's not true at all.

I am not sure what to think about this topic in a whole, but that argument isn’t much different than why we teach responsibility for kids. There might be some truth in it.

larusso

Interesting take. I kinda take this a bit personal because I forgot multiple times about some subscriptions I had and I think I have my finances well under order.

I think there is a major difference between spending more then you have for example or getting into the subscription trap of: paid annually but advertised with monthly rates, paid monthly but is part of a separate subscription: Amazon channels, Apple TV channels etc. I subscribed to a TV service for the Eurocup which was something like 5€ per month. I only realized this after half a year because they send me an email suddenly with the newest shows I can watch. All the time this payment flew under the radar.

If your understanding of managing finances is monthly book keeping down to the penny then yes I might have issues with my finances.

maccard

The problem is that there are still huge amounts of services with awful dark patterns out there. There’s an instagram gym clothing brand called Fabletics which is £55/month for their vip tier. They auto subscribe you with a purchase (and when I say buried in the fine print, I really do mean _buried_ in the fine print). To cancel, you have to do it between the 1st and the 4th of the month, and it’s a multi page form where every page is a confirmation that is designed to look like you have unsubscribed . When services are still doing this there needs to be some rules.

Kwpolska

This is not a dark pattern, this is illegal. Even the US has introduced click-to-cancel recently.

bayindirh

People can leave their computers behind for vacations and try to not use their devices during said vacations or small sabbaticals, you know.

Also, not all people use Kagi for their "search engine" per se. It also has other AI related services, so they might not need a GPU powered parrot every day, sometimes for longer periods.

jychang

Who cares anymore in 2025? Maybe in 1999, but now in about 1 year we'll have agents that can manage subscriptions automatically.

Actually, I'm pretty sure OpenAI Operator can already do that, but I don't pay $200 for Pro so I can't confirm.

callc

In about 1 year can agents automatically bring back the pre-LLM / pre-AI internet? Thanks :)

- my agent

ranger_danger

how would that be enforced?

scott_w

European countries like the UK have consumer protection laws and they get enforced all the time. There’s a few ways:

- Act on customer complaints (or consumer protection organisation complaints)

- Proactively investigate and check

- Require businesses to submit proof that they follow the regulations e.g. test results

I’m sure there’s other ways and you can do one or more of these things to ensure compliance. It’s really context dependent on which methods one would use.

larusso

Also helps to scare with huge fines set up for the likes of Google and Facebook which any normal company can‘t pay in their wildest dreams.

yellowapple

I'm thinking of the time I had a membership with Anytime Fitness. Entry into the gym entailed scanning a key fob, so it was readily possible to have a record of when I entered, and (relevantly) when I didn't.

This was an exact point I raised when they attempted to charge an expired card twice and then sent my bill to collections. The gym staff admitted to remembering that I attempted to cancel because I was moving to a place with no Anytime Fitness locations; they refused to let me cancel my contract early without me showing them my new lease, which I didn't have yet and wouldn't have until after I had already left my old city. They also surely had electronic records confirming that I had not set foot in an Anytime Fitness since that time - or else, no ability to prove that I had set foot in one since that time.

That they had the nerve to not only keep charging my card but send the progeny of their multiple degrees of utter failure to collections is exactly why they never got a dime out of me. If anything they owed me money, not the other way around. That hundred or so dollars has since rolled off my credit report, but until then I wore that delinquency as a badge of honor. That shithole of a company can shove it.

...anyway, that'd be the way to enforce it: by checking access logs to see if the customer actually used the service. Don't have access logs? Well then, you know the saying: customer's always right.

TheSpiceIsLife

You’re in Australia?

If anything like that happens again, or something like you purchase a second hand car but weren’t supplied the signed registration paper / no receipt… need a day off work due to illness but don’t want to pay to see a doctor / telehealth etc etc

You can statutory declaration, a written statement you declare to be true, many professionals can witness them, teachers, dentists, vets, engineers, mostly anyone who’s practice requires they be a member of a professional organisation.

If you were to serve such to Anytime Fitness, either before you intended to leave serviced area, or any time prior to them selling the dept to recovery, they are obliged to cancel from the date they were served or the date you state in the declaration.

A Process Server can hand them the declaration, or you can in person, or registered mail to head office.

This also tends to work for parking ticket fines issued by private car park operators whereby you make a reasonable offer for the time you were parked there—eg ten minutes prior to the first ticket, so one whole hour of parking as a reasonable counter offer to their punitive ticketed fee—though these all tend to be electronically gated these days so mostly moot.

I tend to do a higher than average level of minor civil disobedience type behaviour, and tend to find it quite enjoyable arguing my point knowing I’ll typically win the argument.

Yours truely, Mr Middle Age Curmudgeon

troupo

> they refused to let me cancel my contract early without me showing them my new lease

They problem is the cancellation process, not "they shouldn't charge me if I'm not using it".

prawn

Especially if there was an expectation that someone might forget to use a service and then expect all their data to have remained in storage for them to use when they returned?

moooo99

Fines

TheSpiceIsLife

My prepaid mobile service is configured to auto-renew. The service provider messages me two times prior to renewal, something like three days before and the day before. The SMS contain details of how to change my payment settings, which is also the same place you remove your payment card / bank account details.

We also have legislation that provides warranty on electronic devices and household appliances, everything really, except things like cars and boats etc etc, for the reasonable lifetime of the product. So a cheap washing machine, three to five years would be reasonable, an expensive unit? I want that to last six to eight years. An expensive fridge, at least ten.

manmal

Ok that’s it, I‘ll renew my account now. I‘ve been using it two years ago and was pretty happy, until a problem in my payment processor failed the payments to Kagi. I thought I wouldn’t miss it, but lately I haven’t been happy with DDG and been reaching more for Google, or should I say suffering Google?

I also thought for a while that things like ChatGPT internet search or perplexity would replace DDG and Kagi, but, so far, I just want slop free sources to back up the slop I generated purposely in R1.

fhd2

Exactly! For a lot of work, I use Claude as my first source, then typically I verify what I got out of it with a search engine. If the search engine also starts to hallucinate (starting to see that on Google if I'm not crazy), I have zero use for it. I want results that match my search query, period.

llm_trw

The one area that'd make kagi thousands of dollars from me and the apps I use would be to lower their searches to a sane price.

Currently they charge 2.5c for an API search. This is between 1,000 to 1,000,000 times more than other companies in the space charge.

AI systems need to do dozens of searches for every question to get good results and kagi's results are really good. But not 1,000,000 times better than the competition.

freehorse

I love kagi, but indeed I am a bit concerned of long term usefulness/sustainability of their model if they do not manage to reduce their search costs.

neilv

For the frugal-minded customers, will this be motivation to avoid using the service for the first time that month (and a little sinking feeling when you do)?

dmos62

My first thought. I'd think that first N searches being free each month would fix that for me. Paying for the full month for 1 search feels off, but paying the same for 10 searches dilutes the feeling by factor of 10.

denkmoon

That's great, but I can't even imagine "forgetting" to use Kagi. Completely indispensable.

optionalsquid

It's also hard to forget once you've set it as your default browser. So I imagine that it'll mostly benefit people on the limited (300 search/month) tier, where you might want to ration your searches

vincnetas

Could you share what you find in kagi indispensable? Just subscribed, and looking around.

JumpCrisscross

> Could you share what you find in kagi indispensable?

The academic lens is like Google Scholar, but better. The papers it surfaces are simply higher quality.

Otherwise, append your query with a question mark. The baby AI will do what Google's tries to do, except with a little more skill and better citations.

Most broadly, however, search. It's kind of wild but I forgot that searching the internet used to be fun. Kagi made it fun again.

greatgib

For me, it is not even any particular feature, but just doing a search and getting straight and instantly the results that I need, without crap.

Also I guess part of this is probably the option I used to give higher priority to some websites like python org.

When I subscribed with Kagi, I was so totally pissed off and stressed by using Google where you will now have crap and unrelated ad links everywhere on the page. And in addition often first link that are garbage Copycat of principal websites. For example, for python, when looking for a module documentation, the official doc is the best but there would be hundreds of ad filled shitty pages that would appear first.

annexrichmond

Kagi is awesome, but the thought of having a limit led me to use it less and less and I eventually unsubscribed.

_kidlike

The 10$ plan doesn't have a limit anymore!

zaptrem

This is how I think about unlimited data plans haha. I think a rate limit is easier to stomach (e.g., X requests per hour where they bank up to one hour so you can burst up to 2X for especially crazy hours or something).

annexrichmond

yeah that's interesting. $5 for 35/day could be better as well

throwaway290

I noticed if I need something hard to find I have to do a dozen+ different queries (and sometimes not find anything because it doesn't exist). Both with Kagi and Google the result is the same but with Kagi I also rack up a bunch per one attempt to find something. And if I need something easy to find but lazy both Google and Kagi reliably show the first correct result.

So it's either unlimited or nothing. But since I know Google's search operators well I don't have trouble finding things if they exist so $10 per month is hard to justify. Plus, you're anonymous with Google but you're not anonymous with Kagi since you pay them.

But Kagi can be good for tech illiterate relative you want to shield from sus sites.

null

[deleted]

yellowapple

Probably won't affect me much, since I've happily been a daily user since learning about them at Handmade Seattle last year, but I'm glad they're going this route nonetheless.

z64

Always happy to hear people finding us through HMS! It's a fantastic community, and the Handmade ethos resonates deeply with a lot of us on the team.

Thank you for your support.

- Zac

Vexowsky

tried Kagi for 2 months. It works really nice, but I think it is overpriced. I as a heavy user do notice the difference in milliseconds in comparison with google. Paying $10 and still having that delay felt really bad, so I ended up canceling my subscription.

ciphix

This is a promising trial of an innovative pricing model. Many AI products require a $19.9 subscription fee just to try them out, yet I only use most of them a few times a month. For such occasional use, a monthly subscription doesn't seem very practical or user-friendly. I hope AI products eventually move to a usage-based charging model.

barnabee

Sign up for an API account and connect something like Open WebUI[0] and you can have just that, with a few caveats (mostly around specific UI features).

Bonus is you can query multiple models at once, including local llama.cpp/Ollama models. I use it with the Claude and OpenAI APIs, as well as local Mistral, Qwen, and DeepSeek models.

[0] https://docs.openwebui.com/ (one liner if you have `uv` installed)