Roughly one prospect in five says some version of the same thing, in the same tone - not hostile, more like they've caught you in something. You source this once. You license it out again and again. Every renewal after the first year is basically free money for you. It's said as an objection to price, but it isn't really about price. It's an accusation about margin, and it presumes the accusation is self-evidently damning. Nobody has to explain why "you're making a lot of profit on this" is supposed to be a problem. It's treated as obvious.
It isn't obvious. It's a specific, well-documented, and - this is the part worth sitting with - largely mistaken intuition, and it has a name.
In 1986, Daniel Kahneman, Jack Knetsch, and Richard Thaler ran a study that's become the standard reference for exactly this reaction. They surveyed people on what they considered fair pricing behavior, and found a consistent pattern they called dual entitlement: buyers feel entitled to a reference price, sellers feel entitled to a reference profit, and a firm is allowed to raise a price when its own costs go up - but not when demand simply increases and the firm could extract more for the same cost. Their canonical example is a hardware store raising the price of snow shovels the morning after a blizzard. Nothing about the shovel changed. Nothing about the store's cost changed. The only thing that changed is that people suddenly want the shovel more, and the store could charge for that - and nearly everyone surveyed called doing so unfair, even though, by ordinary economic logic, this is exactly when a shovel is worth more.1
The cost of serving them didn't visibly go up after the first year - no new sourcing, no new infrastructure, nothing that looks, from the outside, like new expense. So the entire renewal fee reads to them as pure, unearned extraction: not payment for anything, just profit-taking because you can. The dual entitlement norm says this should feel unfair, and it does, reliably, to almost anyone encountering it from the buyer's seat - which is precisely why you hear some version of it in one out of every five conversations. It isn't that your prospects are unusually cynical or unusually sharp. It's that they're running a completely ordinary, near-universal human fairness heuristic, and it happens to be the wrong tool for the object in front of them.
It's the wrong tool because the heuristic was built for a different kind of good. Dual entitlement makes sense as a norm in a world of physical goods with real, ongoing marginal costs - every additional shovel requires more steel, more labor, more shipping. Raising the price without a corresponding cost increase really is just capturing surplus that has nothing to do with what it costs you to make the next one. But a data license, like software, like almost anything built primarily from information rather than material, doesn't have that cost structure. The expensive part happened once, at the point of sourcing and building the product. Every license after that costs you close to nothing to deliver. This is not a loophole in your pricing. It's the correct shape of the cost curve for an information good, and economists have written the textbook on it: price an information good to its marginal cost, and you go out of business, because the marginal cost is close to zero and the fixed cost was not. The entire justification for pricing this category of product to value rather than to cost exists precisely because cost-based pricing is economically incoherent once the marginal cost collapses.2 Your prospect's fairness intuition is importing a manufacturing-economy rule into a category of product where that rule was never going to apply.
None of this means the fixed cost disappeared, either, which is the part that's easy to lose in the conversation. It didn't vanish - it just isn't sitting on your P&L, because in every data business built this way, the sourcing cost was capitalized somewhere else, usually against a completely different product line that existed before the licensing arm did. The $20 million a year it costs to keep the underlying data current doesn't stop being real just because it's booked against another division's budget. The prospect isn't wrong that the marginal economics of a renewal look extraordinary. They're wrong about what that means. It doesn't mean they're being overcharged. It means the fixed cost was paid a long time ago, by someone, and the renewal fee they're objecting to is one of many payments spread across many customers that, in aggregate, is what actually funds the thing they're relying on existing at all.
There's a reason this objection almost never comes with a counter-offer attached. Nobody calling out your margin follows it with "so I'd expect to pay X instead" - because there is no principled alternative number sitting behind the objection. It isn't a negotiating position. It's a fairness reflex firing on contact with a cost structure it wasn't built to evaluate, and it stops the moment it's said out loud, because saying it was the whole function. You don't owe it a concession. You owe it, at most, the explanation of why a near-zero marginal cost is the correct economics of the thing they're buying - and even that explanation is optional, because the reflex was never actually asking for one.