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Developers could very well re-architect their application so that when you download the update to v2, you have to unlock the new features with an in-app purchas

Developers could very well re-architect their application so that when you download the update to v2, you have to unlock the new features with an in-app purchase, but to be honest, it's a lot of extra work for the developer, and there is no way to make it less painful for the users, who will feel like they are getting nickel and dimed by the developer. Also, for those users that are brand new on the v2 version, it's a very bad experience when they have to immediately buy an in-app purchase just to unlock functionality that should be included. If you drop the price of the v2 version to accomodate this, then your original v1 userbase will complain that they paid twice as much. Here's an example: v1.0 of App X sells for $9.99 on the app store. Users buy it and are happy. v2.0 of App X comes out and to unlock the new features, you must pay $4.99 in-app purchase. Developer drops the price of the app to $4.99 so that new users don't have to pay $14.99 to get all the features. New users now complain that they have to immediately make an in-app purchase just to unlock the software - they don't notice that it's half price now because they never bought it previously. Existing users complain that they paid $9.99 and are now being nickel and dimed for updates, when the price is cut in half now. You can't win. Unfortunately, Apple has create a model that makes a lot of profit for them, and makes it relatively painless for the end user, but it's a model where the developers suffer and can't really support the large applications that receive many new features every year.

chc 14y ago
I think you misunderstood. He's suggesting that instead of releasing v2.0 on the App Store, you release an in-app purchase option in the original app that upgrades it to v2.0. A similar idea would be to release new features a la carte as in-app purchases instead of releasing new numbered versions. I'm not sure if the marketing hit would be worth it, but it is one way to a consistent revenue stream.
- DigitalJack 14y ago
  Diner Dash follows this model. They update the app periodically and add new content available via in app purchase.
pgeorgi 14y ago
The idea to have new features exist as unlockable extras actually is an advantage to users: if they don't need it, they still get updates for the feature set they bought. So all that's missing is a way to give customers of "date X or later" unlockable features as part of the baseline sale.
- lukifer 14y ago
  Except the developer takes a hit there, too. Given that not everyone needs every feature, users end up subsidizing each other's desired improvements as part of a major upgrade. On top of that, not all features have clear lines that can be drawn around them, technically or marketing-wise. It's a great model for games and certain specific types of apps (Paper is very clever). But to push all apps onto this model is highly unrealistic.
  - spaghetti 14y ago
    I'm not sure if the developer necessarily takes a hit. Say I have $15 to spend on a video editing app. $10 for the initial app and $5 for the only premium feature I want results in me giving $15 to the developer (less Apple's cut etc). However if the developer adds 5 new features to the app and I have to choose between buying features that I mostly don't want and can't afford or not spending the money I'll most likey give $0 to the developer. Similar situation with luxury features on cars: it makes business sense to sell them individually.
    - lukifer 14y ago
      If you wanted/needed the feature badly enough (ie, it was a mission-critical tool), you might pay much more for an update that included your desired feature in addition to stuff you don't need (or even stuff you might not yet know that you want). Also, the extra "wasted" revenue helps pay the developer for the thankless but necessary task of under-the-hood improvements, whose costs have to absorbed elsewhere. I'm not saying the model can never work, but it's not a good fit for every product. The developer should be able to create the relationship with their customers that they think fits best; sometimes that will be IAP, sometimes subscriptions, sometimes upgrades. There will never be "one business model to rule them all", or else we'd see all marketplaces naturally converge in that direction.
spaghetti 14y ago
Why lower the price of the initial purchase? Just keep it simple: basic app is $10 forever. The basic version of the app comes with some basic useful features. Premium features become available via in-app-purchase as the developer makes them. Users can choose to use the premium features or not. Bug-fix updates are just free as they should be IMO. Using a theoretical video editor as an example: $10 gets you basic clip cropping, placing clips next to each other, background music, importing, exporting and titles. So a basically useful app. Later the developer updates the app with a few bug-fixes and a premium "transitions" feature that's available via IAP. This update is of course free to download. So existing users get the bug-fixes for free. Anyone who want the premium feature just unlocks it and uses it indefinitely.
- illumin8 14y ago
  It creates a lot of ill-will from customers which translates into bad reviews: "I bought this app for $9.99 and then I found out that all of the good features require in-app purchases - 1 star for you!"

chc 14y ago

I think you misunderstood. He's suggesting that instead of releasing v2.0 on the App Store, you release an in-app purchase option in the original app that upgrades it to v2.0. A similar idea would be to release new features a la carte as in-app purchases instead of releasing new numbered versions. I'm not sure if the marketing hit would be worth it, but it is one way to a consistent revenue stream.

DigitalJack 14y ago
Diner Dash follows this model. They update the app periodically and add new content available via in app purchase.

pgeorgi 14y ago

The idea to have new features exist as unlockable extras actually is an advantage to users: if they don't need it, they still get updates for the feature set they bought. So all that's missing is a way to give customers of "date X or later" unlockable features as part of the baseline sale.

lukifer 14y ago
Except the developer takes a hit there, too. Given that not everyone needs every feature, users end up subsidizing each other's desired improvements as part of a major upgrade. On top of that, not all features have clear lines that can be drawn around them, technically or marketing-wise. It's a great model for games and certain specific types of apps (Paper is very clever). But to push all apps onto this model is highly unrealistic.
- spaghetti 14y ago
  I'm not sure if the developer necessarily takes a hit. Say I have $15 to spend on a video editing app. $10 for the initial app and $5 for the only premium feature I want results in me giving $15 to the developer (less Apple's cut etc). However if the developer adds 5 new features to the app and I have to choose between buying features that I mostly don't want and can't afford or not spending the money I'll most likey give $0 to the developer. Similar situation with luxury features on cars: it makes business sense to sell them individually.
  - lukifer 14y ago
    If you wanted/needed the feature badly enough (ie, it was a mission-critical tool), you might pay much more for an update that included your desired feature in addition to stuff you don't need (or even stuff you might not yet know that you want). Also, the extra "wasted" revenue helps pay the developer for the thankless but necessary task of under-the-hood improvements, whose costs have to absorbed elsewhere. I'm not saying the model can never work, but it's not a good fit for every product. The developer should be able to create the relationship with their customers that they think fits best; sometimes that will be IAP, sometimes subscriptions, sometimes upgrades. There will never be "one business model to rule them all", or else we'd see all marketplaces naturally converge in that direction.

spaghetti 14y ago

Why lower the price of the initial purchase? Just keep it simple: basic app is $10 forever. The basic version of the app comes with some basic useful features. Premium features become available via in-app-purchase as the developer makes them. Users can choose to use the premium features or not. Bug-fix updates are just free as they should be IMO. Using a theoretical video editor as an example: $10 gets you basic clip cropping, placing clips next to each other, background music, importing, exporting and titles. So a basically useful app. Later the developer updates the app with a few bug-fixes and a premium "transitions" feature that's available via IAP. This update is of course free to download. So existing users get the bug-fixes for free. Anyone who want the premium feature just unlocks it and uses it indefinitely.

illumin8 14y ago
It creates a lot of ill-will from customers which translates into bad reviews: "I bought this app for $9.99 and then I found out that all of the good features require in-app purchases - 1 star for you!"