Unit Economics — pricing, COGS, and margin model

# Unit Economics — pricing, COGS, and margin model

> **Current pricing model.** Two-sided, and the two operator products have **fundamentally different
> margin shapes** because they differ on *who pays the providers*:
>
> | | **License** $3.99/wk | **Hosted** $5.99/wk |
> |---|---|---|
> | Runtime | self-hosted (Electron) | managed always-on VM |
> | Provider keys | **the Director's (BYOK)** | **ours — usage included** |
> | Revenue/mo | $17.29 | $25.96 |
> | Fixed COGS/mo | $2.01 (Stripe + control plane) | $4.79 (+ VM $2.47) |
> | Provider COGS | **$0 — never touches us** | **variable, we absorb it** |
> | Margin | **flat ~88%, no tail risk** | $21.16/mo of provider headroom, then negative |
>
> **License is the safe product**: margin is 88% regardless of how hard the operator runs the Program,
> because their spend is billed to their own account. **Hosted takes on real, unbounded liability** for
> $8.67/mo more revenue — that gap buys the VM *and* every token and crawl. It clears comfortably on a
> typical 3–5 domain Constellation (~$1.69/domain/mo → breakeven near **13 domains**) but goes negative
> on a heavy operator, and there is currently **no cap**: cadence, breadth and cycle count are all
> user-controlled. §7 carries the exposure math and the allowance proposal.
>
> **(2) subscriber rev-share** — the platform takes a **~18% cut** (range 15–20%) when an operator
> charges their audience, ~pure margin (Stripe on the sub is the Director's, via Connect).
>
> **How to read the cost tables below:** the per-action / per-token figures are the **operator's
> provider spend**. On **License** that is their bill and never ours; on **Hosted** it is *our COGS*.
> The older **$20/seat + allowance + metered-overage** framing in §5–6 was shelved when everything was
> BYOK — it is **live again for Hosted**, which is exactly the flat-fee-plus-allowance problem it
> solved. The live model is in
> [`src/lib/core/economics/unit-economics.ts`](../../../../../src/lib/core/economics/unit-economics.ts) (run `npm run economics`).

> **Purpose.** The grounded cost surface of Meridians — every external service the engine
> touches, its real 2026 price, the per-action token cost of every AI operation, and a
> worked proposal for **token-based ("credit") pricing across the whole app**. This is the
> quantitative companion to the manifesto's [Business Model](../../../../src/app/(shared)/white-paper/sections/BusinessModelSection.tsx>)
> section — which now sells the shipped **$3.99 / $5.99 weekly** story, matching
> [`src/lib/server/gateway/pricing.ts`](../../../../../src/lib/server/gateway/pricing.ts). This file is where the
> superseded **$20/seat** proposal was tested against the cost surface; §5–6 keep it for that reference
> only.
>
> **Canonical source of truth for prices:** [`src/lib/core/constants/ai-pricing.ts`](../../../../../src/lib/core/constants/ai-pricing.ts) (`MODEL_PRICING`)
> — that is what the app actually bills calls against via [`calculateApiCost`](../../../../../src/lib/core/kernel/api-logger.ts).
> Where the manifesto and the code disagree, the code wins (noted inline).

## The simulation is now a cost unit

For a causal-simulation user, one situation carried through world construction, forked arms,
Meridians World Search (MWS) rounds, readings, and debrief is a more useful cost unit than a research crawl.
See [the simulation leaf](15-9-the-simulation-as-the-cost-unit.md). Program crawl economics still
apply to Directors who ground worlds in live evidence; they are no longer the modal bill for the
participant, reader, learner, or author shapes.

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