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Unfortunately, this is what you get when you pay $10 for an app. There is a huge disparity when it comes to the cost of apps these days vs the salaries require
by steve8918 14y ago
Unfortunately, this is what you get when you pay $10 for an app.
There is a huge disparity when it comes to the cost of apps these days vs the salaries required to sustain the engineers who make those apps. Even at $10/pop, you need to sell a lot of apps just to sustain the salaries of very good engineers, and THIS is what makes great products vulnerable to acqui-hires.
The problem is that the $0.99 model of the App Store makes a $10 app look ridiculously expensive, especially when there are free alternatives out there, even though it's only 2 Starbucks coffees. And even though $10 is worth it.
It's the price of the apps that have drastically lowered the expectations of what people need to pay for software, and this goes in direct conflict to the rising costs of great engineers' salaries.
I'm not sure what the exact price point is, but my guess is that people need to start getting used to the idea of spending $30-50 PER YEAR in a subscription model for a great app in order to create enough monetary incentive for the developers to keep their products alive. Otherwise Google and Facebook will continue to drop the bills and pick off the best teams who eventually get tired of the smaller comparative payoffs that these apps bring in.
- ben1040 14y agoThis is spot on. Thanks to the App Store, the days of paying $30+ for boxed software and paying again every year or so for version n+1 (assuming it comes out at all) are pretty far back in the rear view mirror now. I paid $10 for Sparrow and got far more than $10 in value from it. So while I am disappointed that the best email app I have seen is EOL'd now I did get a decent value and I can't complain a whole lot. I am no worse off than had I bought a boxed copy of software with no promise for updates ever. I would have paid $30 up front for Sparrow and purchased a large feature release for that price later down the line. Happily. That is a price far more in line with the value delivered. How do we recalibrate people's expectations about the value of software back to pre-2008 levels? Not everything can or should cost a buck.
- kenjackson 14y ago"Not everything can or should cost a buck." When I talk to many developers they tell me that everything should be free. How do you recalibrate the consumer's perception of the value of software, when so many developers don't value software either?
- jiggy2011 14y agoI guess they are meaning "free as in freedom" which is something that comes up time and time again thanks to the FSFs insistence on using poor wording. I don't think that developers don't "value" software. It would be a push to suggest that people who use Linux,Apache or Emacs don't see any "value" to them. I'm sure if they though about it they could probably assign a high dollar amount that would reflect the utility they receive from these programs. Personally I don't have a problem either paying for a commercial software or using an open source alternative. It's when an application is either free (as in $0 or outrageously cheap) and closed source and I can't "get" the developer's business model that I would be very hesitant to rely on it.
- TeMPOraL 14y ago> I guess they are meaning "free as in freedom" Not necessarily. Most of the software developers use - from IDEs/editors, through version control, synchronization, web stack, to server software and even the basic but important tools like ls or grep - is free. Free as in "free beer". We are used to get tremendous value for free. We are used to give away value for free. And I'm not surprised that many developers (myself included) like this utopia, even if it is not currently sustainable.
- jiggy2011 14y agoOpen source is a sustainable way of making software a zero money cost though. The contract is basically that they allow you to use the software on the basis that you might give some value back in the form of patches, bug reports or even just asking intelligent questions on their forum or paying for commercial support. Even if you don't they don't really lose anything. A huge amount of OSS is fairly "developer facing" too, with possible exceptions of stuff like firefox of VLC (few people would imagine paying for a media player or browser today). I agree though that bad FOSS evangelism may be partly to blame, if you tell everyone to "use Linux because it is free, all software should be free!" without explaining that price not the important part of the equation and you are a software developer yourself then I guess you can't be too surprised if people see that as endorsement to pirate Photoshop.
- Zirro 14y ago"How do we recalibrate people's expectations about the value of software back to pre-2008 levels?" As someone who wasn't quite old enough to be interested in following this when it happened, I feel the need to ask: Why did the App Store affect pre-2008 price-levels as much as it did? Were most apps this cheap at the launch of the App Store, or did it lower over the year(s)? Did Apple set any guidelines for the price-levels of apps, thus creating the levels we're seeing today, or was it entirely up to the developers?
- SoftwareMaven 14y agoThe early days of the App Store were a gold rush. People were able to make a good chunk of money off a $5 app. That brought in investment dollars (angel or internal corporate development) that allowed prices to be lowered because there was less direct need to have revenue and costs line up. Over time, that pushed the prices down lower. Customers became accustomed to getting an amazing app for $0.99 (or even free), so they complain at best and refuse to buy at worst if the price is much higher. Apple never provided any guidelines on pricing. The market went where it wanted to.
- mgkimsal 14y agoI know I'm not the only one, but I rarely buy iphone/ios apps, mostly because there's often no trial process, and there's no return/refund policy. Yes, it might get abused, but give vendors the ability to do more (time limited trials, functional trials with in-app upgrades, etc). Some vendors try to provide this, but... they're fighting against Apple App Store policies. Yes, you can argue "hey, it's just $x" ($2? $1? $3?) Over time, those tend to add up, and when there's no recourse, I'd rather just not participate much.
- gyardley 14y agoPrices were slightly higher at launch, with $4.99 and $9.99 being fairly common price points. (Super Monkey Ball, the first heavily-promoted game I can recall, was $9.99.) But by Christmas 2008, less than a year later, prices were about what they were today. In my opinion / recollection, prices dropped because some developers experimented and discovered that they could make more money at $0.99 - the increased unit sales more than made up for it. Of course, those increased unit sales were partly because they were one of the few quality applications selling at $0.99 - and once the other developers saw how the $0.99 apps were cannibalizing their $4.99 sales, they followed along to compete. I don't recall Apple influencing pricing publicly, but god knows if they had any discussions with their initial, pre-announcement partners. It wouldn't surprise me if they pushed Sega to get Super Monkey Ball out at $9.99, since it sold for much more than this on earlier game platforms, but that's just me speculating.
- Jach 14y ago> Thanks to the App Store, the days of paying $30+ for boxed software and paying again every year or so for version n+1 (assuming it comes out at all) are pretty far back in the rear view mirror now. I think this is overblown. There are a lot of business models, many that don't revolve around app-store-like freemium or one-time $1 purchases. They are waiting to be used. In the enterprise world, I don't think the app store has even made a dent in purchasing decisions.
- wensing 14y agoHow do we recalibrate people's expectations about the value of software back to pre-2008 levels? One suggestion: Stop trying to push the cutting edge forward and start delivering value to people in the technical stone ages. In other words: B2B. Stop focusing on entertainment or social value and make something that actually makes or saves money. People are still paying $12,000 per seat per year for the Bloomberg Terminal. Make another one of those.
- dhugiaskmak 14y agoHow much would Sparrow have had to sell for in order to make a $25mil offer from Google not seem attractive? Would you have still bought Sparrow at that price?
- webwright 14y agoThis is very very true. Their overall top grossing US rank (on iPhone) was stabilizing in the 500-700 range (after generally declining for months[1]), which equates to tens of thousands of dollars per month from my understanding. I'm sure they made some from their Mac app as well. This is GOOD MONEY, don't get me wrong. But you'd have to really love self-employment to take this over a $2M payout and a $200k comp package (stock, benefits, etc). If I were to guess, these guys were also buried in support from paying customers who felt entitled to it. What are the economics of technical support for a $2.99 app? [1] Source of the rank data-- requires an account but worth it if you're interested in this stuff: http://www.appannie.com/app/ios/492573565/ranking/history/#view=grossing-ranks&start_date=2012-01-21&end_date=2012-07-20 http://www.appannie.com/app/ios/492573565/ranking/history/#v... Here's a screenshot if you don't want to create an account: https://skitch.com/webwright/eenji/sparrow-rank-history-app-annie https://skitch.com/webwright/eenji/sparrow-rank-history-app-...
- raldi 14y agoWhat does "stabilizing in the 500-700 rank" mean?
- webwright 14y agoThere's a Top 1000 Grossing Apps list for iPhone that is track-able. They are in that list in the 500-700 range. Here's a screenshot of their graph so you don't have to create an appannie account: https://skitch.com/webwright/eenji/sparrow-rank-history-app-annie https://skitch.com/webwright/eenji/sparrow-rank-history-app-...
- phil 14y agoMac app had a run rate of over $1m its first six months, per this interview: http://articles.businessinsider.com/2011-08-26/tech/30036420_1_mac-app-store-iphone-app-ios http://articles.businessinsider.com/2011-08-26/tech/30036420... Who knows what was happening internally, but on the surface: strong team of 5, $1-1.5m revenue their first year, tremendous reputation and another product in the pipeline. What more could you ask for to make a long term go of it?
- chimi 14y agoIt's easy to blame the app store and focus on Apple here, because Sparrow runs on Apple products, but it's not Apple's fault. Developers have given away software products for less than $0.99 since long before Apple conceived of an app store. Open source software is free. Firefox is free. Thunderbird is free. That anyone would pay for an email client at all is exceptional. It's not Apple who is at fault here -- it's us.
- acdha 14y agoWhy? People pay for quality and the OSS email apps tend to be unlovable. Sparrow proved there's a market willing to pay for better clients but Apple doesn't want their money and nobody else seems interested in trying for it.
- raverbashing 14y agoYeah, but the market is tiny A better email client can only go so far: - Gmail is already a great email client, I just plug other accounts into it - I really want a good email client. For Linux - Outlook/Thunderbird/Evolution may be bad, but they're usually good enough
- tlogan 14y agoMany users actually think everything should be free. And they even claim they are 'ripped off' because the free version of software does not do 'X'. And they post bad reviews and send hate emails. (First hand experience). Somehow, thanks for Facebook and Google, people feel entitled to free software and service.
- jiggy2011 14y agoI actually think we have Piracy to thank for this and perhaps to a lesser extent Open Source. There seems to exist a group of people who feel that piracy isn't just something that you do because you can't afford product X and feel marginally guilty about doing but something that is somehow a fundamental human right in a "people who pay for software are mugs" sort of way.
- thirdsun 14y agoTell me about it - several of my friends who aren't very tech-savvy would nevertheless go to great lengths in order to have someone jailbreak their iPhones - not to escape the walled garden or other greater reasons, but simply because they heard there's free stuff to get. Of course this isn't limited to software as those are the same people that haven't bought an album in years.
- mgkimsal 14y agoDid they go so far as to pay someone to jailbreak for them? Or buy a jailbreak utility?
- thirdsun 14y agoNo, they just ask, express their interest and I usually try to explain that it isn't a very good idea to jailbreak - especially if you don't know what you're doing.
- jiggy2011 14y agoI know someone who jailbroke his iPhone so he didn't have to pay for a $10 navigation app to use to navigate his $40,000 Mercedes.
- jusben1369 14y agoI don't understand this argument at all. None of it. It's odd and quite frankly silly. It doesn't matter if the app was $10. Enterprise software companies, that sell for 5, 6 and 7 figures get acquired all the time. Their offerings then get EOL'ed many times. Free doesn't help you. $30 doesn't help you. $1 million doesn't help you. If a larger company believes that acquiring smaller company is attractive and writes a big check then that's what happens. The only determinant I can see is if you want a lifestyle business where you're always the master of your own domain. That seems to be the only reasons folks won't sell (Marco won't move a family to the Valley - at least not unless he gets a LOT of money) When did we all start pining for everything to be the same forever?
- DLWormwood 14y ago> When did we all start pining for everything to be the same forever? Since time immemorial... it’s one of the few constants of human nature that does stay the same.
- ZoFreX 14y agoIf anyone is truly pining for everything to be the same forever then they're in luck, because Sparrow won't be changing anymore...
- joe_the_user 14y agoOpen source helps if your app has a functioning eco-system. Oracle couldn't kill Open Office for example.
- FrojoS 14y agoI always thought, or at least hoped, that the economy of scale will allow $0.99 software to be profitable. That software would be so cheap, that you don't think even twice. But because millions do the same, the developers can still become rich. Right now, there might be a few dozen million clients on the app store. What if someday there will be a few billions?
- jiggy2011 14y agoIt depends how many people are going to use your software which is some function of your marketing, how good it is and how many people would find any use in it at all. I'm not going to download an app that is useless to me, even if it costs nothing. Obviously there are only so many people who use email and only so many of those are interested in using an alternative client.
- phil 14y agoThe funny thing is, they probably should have priced lower. If you look at their rank history on Mac and iOS, they saw big grossing rank bumps the few times they dropped the price. Maybe that's just a short-term effect (yay, sale!), but based on the week they sold Sparrow for $4.99, there's a good chance they would have made more long term. App store economics are weird.
- jinushaun 14y agoHow is $10 even an argument? Expensive software companies get acquired all the time, not just $1 App Store devs.
- tubbo 14y agoWhat's the point of paying at all if it's going to be acquired? Seems to be you could save a bit of money by just stealing it until it gets acquired, then download the free version legally. I'm all for supporting independent developers, but I feel like I'm wasting money when I buy an app that's just going to be free in the future anyway.
- ksolanki 14y agoWe (most in this discussion) seem to forget that the advent of $10 or $0.99 app actually expanded the market. As in, more people paid money for software than before, thus paying for more indy/non-indy developers. So let me say this again. The App store, with its $1-5 apps, is a good thing for the developers as well as the users.