HP's ink subscription service is called ink cartridge DRM, and a company executive once boasted about how the model "locks in" people. That's not a kind word to use for a company that's rolling out a firmware update that blocks the use of non-HP ink.
According to "TheReg", HP Chief Financial Officer Marie Myers spoke to investors at the UBS Global Technology Conference about the technology giant's subscription model.
"We can definitely see that when you take a customer from a purely transactional model...whether it's InstantInk, or add it to paper, we can see a 20% increase in customer value because you're locking in that person and thereby committing to a longer-term relationship," Myers said.
HP's InstantInk subscription service delivers ink or toner cartridges when customers need them. Pricing starts at 99 cents and goes up to $25.99 per month. Despite the higher price, the service still had more than 11 million users as of May last year.
HP doesn't have a great history of pleasing customers. In 2019, HP raised the price of its printer hardware and now also focuses on smart ink tanks and "non-stop" printers that are fully loaded with an estimated two years' worth of ink or toner.
As early as May this year, HP was exposed that as part of its dynamic security policy, HP had banned more customers from using third-party ink cartridges on printers. The policy, introduced in 2016, was said to protect the company's intellectual property and the quality of the customer experience by preventing the use of ink or toner cartridges that do not contain new or reused HP chips or electronic circuits.
In August, HP faced a class-action lawsuit accusing it of shutting down multifunction printers when they were low on ink, even if users were using the scanner function, which did not use ink cartridges at all.
Despite the complaints against HP, HP's controversial policies are working. Its printing unit's profit margin has increased from 14.8% in fiscal 2020 to 18.9% in fiscal 2023.