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What justifies the huge subscription price increase?
Today I received an email from 1Password with the message of a price increase.
Current price: €31.80 EUR / year New price: €43.80 EUR / year
This is an enormous price. Can someone from 1Password...
Hey everyone! We hear the concerns about AI, especially when it comes to privacy and security. That’s completely fair. We want to clarify and be very transparent about how this specific feature actually works.
We use AI internally to help create and maintain a reference list of common websites, things like primary URLs, login URLs, and human-readable names. This work happens entirely on our own systems, not on your device. That information is compiled into a static database. When you create a new login item in the browser extension, 1Password simply checks that database and applies the appropriate readable name. For example, it might label a login “American Airlines” instead of “aa.com” or “AA.” That’s what the AI-powered item naming feature (launched in 2024) actually is, essentially a smart lookup table that makes saved items clearer and easier to find.
Importantly, this doesn’t access or analyze your vault, your data stays end-to-end encrypted, nothing from your vault is sent to any AI systems, and no external AI services or large language models are involved.
We know AI raises important questions, especially when it comes to security and privacy. Our approach is intentionally limited and privacy-respecting, designed to improve usability without ever touching your vault data.
A suggestion for consideration by 1Password: Please allow a consumer to lock-in the current subscription price for one or more years, by pre-paying the total subscription fee in a single non-refundable lump sum. In this way, the consumer benefits by having a lower fixed price - and, 1Password benefits by knowing that the consumer will be loyal to the product for the duration of the pre-paid period.
This is a good proposal for users, but I don’t see 1Password adopting it. Their recent moves suggest a focus on extracting more revenue in the near term rather than committing to long-term price guarantees, which makes a prepaid price-lock option unlikely. From a purely financial standpoint, a 20% price increase would only stop paying off if roughly 16–17% of users actually left — anything below that still results in higher revenue for 1Password.
The suggestion would enhance revenue for 1Password in the near term, since cash flow would accelerate from future periods into the current period. Perhaps more importantly, however, it would demonstrate a courtesy to the 1Password community to ensure that the strength of customer relationships is maintained.
The value of a customer to a company is not simply equal to the cash received from that customer for a subscription renewal. The most savvy companies seek to maximize CLV (Customer Lifetime Value), which includes CRV (Customer Referral Value). Hopefully, 1Password will begin to think more strategically about its most important asset: namely, its collection of customers.
