Is this like saying a gym runs at 40%+ margin because 80% of users don't really use it heavily or forget they even had a subscription? Would be interested to see the breakdown of that number.
That's how nearly every subscription service works, yes. Some fraction has a subscription and doesn't use it, another large chunk only uses a fraction of their usage limits, and a tiny fraction uses the service to it's full potential. Almost no subscription would be profitable if every customer used it to its full potential
TL;DR: their subscriptions have an extra built-in margin closer to 70%, because the entry price, target audience and clever choice of rate limiting period, all keep utilization low.
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In this case I'd imagine it's more of an assumption that almost all such subscriptions will have less than 33% utilization, and excepting few outliers, even the heaviest users won't exceed 60-70% utilization on average.
"33% or less" is, of course, people using a CC subscription only at work. Take an idealized case - using CC only during regular working hours, no overtime: then, even if you use it to the limit all the time, you only use it for 1⁄3 of the day (8h), and 5 days a week - the expected utilization in this scenario is 8/24 × 5/7 = 24%. So you're paying a $200 subscription, but actually getting at most $50 of usage out of it.
Now, throw in a rate limit that refreshes in periods of 5 hours - a value I believe was carefully chosen to achieve this very effect - and the maximum utilization possible (maxing out limit, waiting for refresh, and maxing out again, in under 8 hours wall-clock time), is still 10 hours equivalent, so 10/24 × 5/7 = 30%. If you just plan to use CC to the first limit and then take meetings for the rest of the day, your max utilization drops to 15%.
Of course people do overtime, use same subscription for personal stuff after work and on weekends, or just run a business, etc. -- but they also need to eat and sleep, so interactively, you'd still expect them to stay below 75% (83% if counting in 5-hour blocks) total utilization.
Sharing subscriptions doesn't affect these calculations much - two people maxing out a single subscription is, from the provider side, strictly not greater than two subscriptions with 50% utilization. The math will stop working once a significant fraction of users figure out non-interactive workflows, that run CC 24/7. We'll get there eventually, but we're not there yet. Until then, Anthropic is happy we're all paying $200/month but only getting $50 or less of service out of it.
