The crux of my argument is that there is a timeline where people would've paid the all-in cost of the service, with margin, as a flat-rate sub. The $20 rate was not sustainable when factoring in training costs but if not for DeepSeek they could have simply raised the prices rather than gestures broadly whatever the fuck is going on at Anthropic now, with a new PR fumble every three days. If the Chinese models didn't exist, people would've groaned but would likely still pay $40 or $50 for an LLM subscription.

You misdirected my quoted statement to assert a position I did not take. When I talk about flat-rate subs being a good UX, I am not talking about at a subsidized rate. My position is that people will pay more for a flat-rate sub than they are willing to through per-token billing. That is, a consumer who would only pay average $10/mo if they used the API will voluntarily pay $20/mo for a sub, because even though it's a worse value the latter is a tremendously more friendly user experience. When I say that flat-rate subs are necessary for traction, I mean that solely from a user experience perspective, not "subsidized usage is necessary for traction".

There’s also the “prepaid” alternative. Especially if you’re skittish about budgets. You topup you account for $10, and when you overflow (maybe by setting an alert to around $8), you can add an extra 5$ to make it to the end without interruption.