6 ms·

Underscore Price Dynamics

209 points by mh_ 13y ago

deleted 13y ago
[deleted]
sami36 13y ago
I never understood why in-app purchases have been branded as "evil" in the first place. As long as Apple doesn't offer developers a way to do trials, it's the closest way a customer can get a taste of an app's features, esthetics before deciding whether to pay or not for an app. EX : I wouldn't have paid 10$ for flighttrack pro without the in app purchase option. I would go as far as theorize that the main reason why the average price for an app has remained stuck at 1$ is exactly that fear of paying for something worthless without much of a recourse. in-app purchases all the way.
- Kylekramer 13y ago
  Seems like an argument for a sensible trial system, not IAP. I've got no problem with using IAP for a sensible trial system, but it is much more commonly used for smurfberries.
- ghshephard 13y ago
  It's not In-App purchases, per se that are evil - I've spent around a hundred dollars on new levels (great use of In-App purchase - you reward the developer for creating new content), new tools, new capabilities in the last few years (much less than the the close to a thousand dollars in "up-front" app purchases I've made) - and I think I've gotten real value each time. What's truly evil, is the cognitive manipulation that "free" games engage in on those who are most vulnerable to those manipulative techniques. The "Candy Crushes" of the world. You want there to be a virtuous circle, in which developers are rewarded for creating new, and improved apps; not for buying extra boosters so you can clear the jelly without developing the skill required to (or wait long enough for an easier level). How stupid do you feel purchasing "Diesel" for your "Tractor" in a game? Particularly when you consume it and just have to buy more diesel to continue at any reasonable pace. That's the evil part of In-App purchases - I can show you a dozen places where In-App purchases and/or subscriptions have been very well executed to the benefit of everyone. (LetterPress, Flickr, Whatsapp, Path, evernote, Pioneer Lands, Paper by Fifty-three - just to name a few)
  - wahnfrieden 13y ago
    It would be more helpful to show examples where IAP/subscriptions were well executed by your standard and still made it to / stayed in the top grossing list.
    - ProblemFactory 13y ago
      ghshephard gave a good answer to the question "why do many people consider in-app purchases evil". However, there is no doubt that "evil" approaches are more profitable than the doing the right thing. Techniques such as the ones described in http://www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/The_Top_F2P_Monetization_Tricks.php http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949... are very effective, and developers who do use them are likely to make more money. But that doesn't mean that any means necessary to make it into the top 10 grossing apps list must be considered ethical.
- mikeash 13y ago
  IAP in general is fine, but a lot of these apps are bait-and-switch. They do not make it clear up-front that unlocking critical features requires payment. Games are the worst. There are so many "free" games which simply do not allow you to have fun without spending money. They claim to be free, but then it turns out you have to grind pointlessly unless you pony up the cash. It's gotten to the point where I won't bother with any free app that's listed as having IAPs. I much prefer the "Lite" model, where you basically have a functional demo for free, then a separate paid app. Offer the paid features in the "Lite" version as an IAP too, if you think that helps. What it comes down to is that a good transaction should be a net gain for both sides. I give you money, and in exchange I get something that's worth more to me than the money I give you. We both win! But the way many of these games are done, the creator deliberately makes their game less fun in order to make it more lucrative. It's no longer mutually beneficial. Rather than adding value to get more money from me, they actually reduce value to try to extract more cash.
gdubs 13y ago
I think one of the main reasons it's so hard for new developers to make money is that -- as has been said so often -- discovery is broken on the App Store. The "new" category basically doesn't exist anymore, and even if it did there are a ton of new apps being released _daily_. For everyone's complaints about Apple's stringent review process, there's a ton of crapware on there, which makes customers really hesitant to buy. In [some] ways you're better off charging _more_ money and targeting a highly specific user base. Then you at least have a good shot at reaching the top-grossing lists in niche categories and gaining visibility. Edit: to be clear, there's a lot of different types of apps and the free or IAP route can be the right choice. But, IMO you need something that has mass appeal if you're going to rely on converting small percentages of free users to paid users.
- radley 13y ago
  It's not just discovery. The land grab is over and established apps are well entrenched. There was a huge first-wave advantage for mobile apps. We just barely caught the end of it ourselves, so we're doing ok.
  - deleted 13y ago
    [deleted]
  - gdubs 13y ago
    You're right, absolutely. For newcomers, it's an uphill battle to market even if there's no competition in the space.
    - ghshephard 13y ago
      The quality apps will always stand out. I'd tried a bunch of note taking apps before vesper came along - and it put them all to shame. I think I've tried every podcast app out there - and they are all really, really cruddy. I spend 10-15 hours a week with iCatcher, and it reminds me of my Palm Treo 650 - It's the best of the bunch (for me), but it still manages to seriously annoy me every time I use it. If marco gets good traction with his design team (Pacific Helm again?), I'm sure he's going to blow away the "quality" podcast-player market. Only problem is, the market for people who are looking for quality podcast players is probably in the tenths (or even hundredths) of a percent of the iOS users. But, if he makes Overcast free.... I'm very interested in seeing how he manages to In-App charge for a free podcast player.
jarjoura 13y ago
It's all about value-add really regardless of whether someone assumes it "comes from Apple" or not. If it's obvious what the value-add for your application is in the app store, then pay-up-front works. One problem is, 5 screenshots and non-rich text descriptions really make that hard.
Osmium 13y ago
Flip-side on the IAP suggestion: I despise ads, but if I have an app with ads I can't bring myself to buy an in-app purchase to remove them for an app I probably won't use that often. Whereas if the app was just $.99 to start with, and it looks decent, I'd happily buy it even if I don't use it much. I wonder how this attitude would differ depending on whether you're an early adopter of the technology or whether you're just getting your first smartphone. I come from the Mac sphere where it's entirely reasonable to spend a lot of money on a good app (I'm considering paying $90 to upgrade to the latest OmniGraffle for example), so buying apps on a phone where most are super cheap doesn't seem so bad to me. Either way, I think losing the paid app market is a Bad Thing. Quality apps are expensive to make, but I have an expensive phone; I don't then want to load it up with cheap, ill-designed apps. It doesn't matter how good the phone is if the apps are crap.
- eropple 13y ago
  > I don't then want to load it up with cheap, ill-designed apps. The depressing thing to me is how much of a minority thing this is. It's not platform-specific; Android sales have always lagged iOS in general, but the aggressive ugliness of Android apps and cheapness of Android users (don't get me wrong, fellow Android people, I use them as my daily drivers, I prefer them) has now just made the jump to iOS. Which is insane. But, hey.
radley 13y ago
On Android a common method is free / prime. A free version has basic features while a paid prime apk acts as an unlocker for advanced features. Haven't heard of removing a free app and replacing with a paid. That doesn't make sense or work for anyone. That free app is an essential promotion. The only downside/difficulty is all the user support. Free users can be pretty rough.
- ghshephard 13y ago
  The two removals mentioned by marco in his article were not a case of removing a free and replacing with a paid. In one case, it was removing the free competition to an already existing paid application. (Only works if there isn't other free competition in the market) The other case has started to really annoy me - it's where developers are starting to remove their version 1 application, and replace it with a version 2 which you have to purchase. The only problem with that, is if you were perfectly happy with version 1, you can no longer migrate it to your next Laptop/iPhone - because it's been removed from the market. Somewhat defeats the value of keeping your content in the "Cloud" - you are back to square one where you have to have local copies of everything because you never know when the developer is going to yank your functional version.
  - josephlord 13y ago
    You can transfer the apps from iTunes even if they are no longer available. You can even keep old versions if you copy the .app files or rescue them from the recycle bin after the updated version is available. I suspect you can only install them on devices attached to the correct account and I'm not sure what happens with the Mac App Store (or Google Play, Windows store etc.)
  - kazagistar 13y ago
    You seem to be under the impression that you own the content, as opposed to it being rented to you at the whim of the companies involved.
k-mcgrady 13y ago
In my experience it's gradually gotten worse over time. Up until someone in 2010 charging people $1-3 up front worked well for me. Then sometime in 2010 it slowly stopped working as more of the 'top' apps switched to a free with IAP model. Consumers didn't want to pay up front for an app from an unknown developer when people like EA were giving their apps away for nothing.
- toyg 13y ago
  In Europe, 2010 is when people lost their jobs because of the 2008 crash. I bet people like EA switched to IAP because they felt it was a way to bypass the newly-developed austerity mindset.
radley 13y ago
One thing I think he overlooked was the benefit of cross-promotion through a proven track record. Had he held on to his old apps, he would have been able to leverage them to promote his new app. Now he has to start from scratch, using only his blog to promote it.
- ghshephard 13y ago
  "only his blog" (...and his conference appearances, and wildly popular podcast, and twitter feed, etc.. Marco is a well-honed promotion machine.)
radley 13y ago
There's really nothing new here. There was only a brief window during which you could immediately charge for mobile apps. Desktop software has relied on try before you buy for a while now. Mobile has simply matured.
miguelrochefort 13y ago
On Windows Phone, every app has the ability to offer a free "trial" version. So you can make a paid app, but still let the user try it (with less features, or ads). I think this mechanism is ideal.
- unsigner 13y ago
  Windows Phone is not exactly a sterling example of developer success, is it?
  - miguelrochefort 13y ago
    What do you mean? Windows Phone has the best mobile programming environment there is. The tools are much better than anything you can find for iOS and Android. I know, I programmed apps on all major platforms. So is it a developer success? I would think so. Is it a consumer success? Not really. But it's consistently gaining marketshare, and is becoming quite popular in Europe. And no, I don't work for Microsoft.
spolsky 13y ago
The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component. The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Trello, which is free, but the business of providing administrative tools to large organizations using Trello can sustain the whole business. This is more than just "freemium" or "advertising-supported." Freemium and Ad-supported business models are special cases of this general model. The real insight is that the free product has a chance to reach an enormous audience which provides distribution/advertising/marketing making it trivial to go to market with your paid product. What Marco is reporting here is that the old-fashioned "make something and get people to pay for it" business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.
- Swizec 13y ago
  Unless the cost of maintaining a 100x userbase outweighs the combined $$ value of the value added feature for the 1%.
- krmmalik 13y ago
  What are your thoughts on say something like a video course? i.e giving it away for free and doing an upsell on consulting or stick to charging for the course?
  - ghshephard 13y ago
    That's the twitter/blog model for a lot of people. They give away really great content, build their brand, and then hold conferences/sell t-shirts, etc... The only challenge with that is you have to be really skilled/gifted to get traction in a very noisy environment. The other challenge with something like "consulting" - is that you don't get a lot of opportunity to scale - you are limited by the number of hours a day you can work (as opposed to conferences, where you are limited to the size of the venues you can book/fill)
markkanof 13y ago
I general Marco's points seem accurate, except for the first one. I've mentioned to many people that I build iOS apps and never have I had someone assume that I work for Apple. There are certainly various misconceptions about the app business (ie. it's an easy ticket to millions), but assuming I work for Apple is not one of them. These are "regular" people that have no knowledge of the Apple or tech sphere, other than owning a smartphone. Doctors, teachers, retail employees, elderly relatives (who have no idea where I work), all sorts of different people. There is definitely some interesting psychology going on with regard to the amount anyone is willing to pay for an app, but I really don't think believing the developer works for Apple has anything to do with it.
nawitus 13y ago
>Everyone outside of the immediate Apple tech sphere assumes, since I make apps for iOS, that I work for Apple. Interesting. I've never heard anyone having this misconception. Everyday people seem to know that app developers are completely different from Apple or other mobile phone manufacturers.
- giovannibajo1 13y ago
  Agreed. On the other hand, basically everyone but developers believe that billing/CC problems in the applications stores are developers' fault.
mrtron 13y ago
Lately I have been thinking a lot about the giant leap of faith you have when installing an app. There is no free trial, and most apps you can't understand until you start using them. One of the biggest gaps is games - most promotional videos do not even display in-app activity. I think most of us would pay for instagram and twitter now. I would have to think twice about it above 20$/month. I don't think they could get to where they are with a paid app model. I tried out a few ways to solve this problem. Better app landing pages. Better app videos. Nothing works, apps are an experience. Also their utility skyrockets in certain situations. Twitter is essential when something major is happening, like an earthquake in your area. Instagram is essential when you want to e-brag. Yelp is essential when you have a group of people deciding where to eat. The barrier to pre-installing the app needs to be incredibly low, and the ease of use for a noob needs to be low.
- angryasian 13y ago
  I think its a little naive to think that users wouldn't jump to another network, if they started to charge. I think what mobile has proven is that the micro social networks are easy to start and can get big fast because of people reluctance to stick with a single solution.
crazygringo 13y ago
Is there anything in the app store TOS preventing developers from releasing, for example, free versions that are 14-day trials, that are upgraded to full version in-app, or else stop working? I have nothing against paying for apps, but after having been totally burned a bunch of times, I refuse to pay for an app I can't even try out first. Lots of people say "just look at the reviews", but they usually don't tell you what you want to know -- it's not a substitute at all.
- cmelbye 13y ago
  Yes, that's not allowed.
- ghshephard 13y ago
  From: "http://www.makayama.com/checklist.html" http://www.makayama.com/checklist.html" Time trials are not allowed, if they completely disable the app's use. Also restrictions such as limiting the number of runs are not allowed. Apps should have core functionality that does not expire. However, you can use In App purchase to let certain features expire and then charge to unlock these again.
- smsm42 13y ago
  IMHO this (disallowing trials) is a big mistake. I very rarely would buy an app that I can't try. Of course I can afford to lose $1 or whatever - it's not the cost but the fact that I had been scammed what would infuriate me. It would only make sense for the app makers to turn my loss aversion against me - if I already used the app for a couple of days and liked it, now the choice for me would be "lose it or pay measly $2" - and that would be completely different game. Given that Apple exercises total and absolute control over the whole ecosystem, it could easily make trial system that makes apps free for 3 days (or 15 days if the developer chooses) and then makes them stop working until you pay. I think it would make Apple ecosystem much more friendly to the user, because frankly reviews are usually worthless and screenshots etc. are not much help either.
  - icelancer 13y ago
    I completely agree. Apple contributed to the death of the up-front paid app by disallowing this. It's ridiculous.
FollowSteph3 13y ago
People say they are willing to pay but more often than not they look not to pay. Same as airlne tickets. Everyone complains the service and quality is terrible yet everyone is always looking for the cheapest price. It's the real consumer behavior drives the markets rather than our idealized behaviors ;)
- libovness 13y ago
  Totally agree. If you had four movie theaters that: 1) Charges $12 up front 2) Shows the movie for free with ads 3) Allows you to decide if you want to pay $3 for each quarter of the movie Easy: #2 or #3, then #1.
  - klaasmer 13y ago
    You would rather watch the movie with ads?? Really? I would pay to get rid of ads everywhere.
    - sjs 13y ago
      That is not a popular stance. See cable television.
      - riobard 13y ago
        Sad thing is, even if we pay, we still get ads. Like before the movie is shown. Apparently we don't pay enough.
        daemin 13y ago
        This happens in Australia as well, the cable TV channels actually show more ads than comparable ones on free to air TV. It seems that because you're comfortable paying for a product that you're actually more valuable to advertise to.
      - pietro 13y ago
        See Netflix.
leefrank 13y ago
my friend's mother-in-law makes $76/hr on the internet. She has been fired for 9 months but last month her payment was $14190 just working on the internet for a few hours. this big57.com
berzniz 13y ago
There is one hack that seems to work. Keeping the app free for its first week on the store. This gets the app in the hands of the right people, the "early adopters". If the app is good, they'll use it and recommended it to friends long after the promotion week is over. People are not afraid to pay when the trial was confirmed as a success by their friend (who is an iPhone genius).
- mesozoic 13y ago
  Do you have any case studies of this you can refer us to?
  - berzniz 13y ago
    Can't provie it, but I'm seeing this for my own app (It's in Hebrew and quite successful in Israel http://bitly.com/DriveModeHeb http://bitly.com/DriveModeHeb ) and other previous apps.
xamdam 13y ago
Dude made searching my own instapaper articles on my own device a "subscription service", I switched to Pocket just for that. Unforgivable existing-customer f*king.
pc86 13y ago
To the App Store developers out there: is it even worth getting into this market? I've dabbled in Objective C/iOS development, but never built a full app. Never released anything into the app store. I've been looking for something to direct my free time toward and was thinking this would be it, but I've read an increasing number of articles like this essentially stating that the single-developer part-time app model is dead and you'll be lucky to make enough to pay the $99 to Apple every year.
kristianp 13y ago
I apologise in advance, but what is the significance of the "Underscore" in the article title?
- smackfu 13y ago
  The podcast he references is by David Smith, who uses _davidsmith as a twitter handle, and then gets called "underscore david smith" on podcasts.
jonny_eh 13y ago
What's Overcast? He talks about it like I know what it is. I even follow him on Twitter, I must have missed a tweet. Is it a podcast app? Is it out?

209 points by mh_ 13y ago

deleted 13y ago

[deleted]

I never understood why in-app purchases have been branded as "evil" in the first place. As long as Apple doesn't offer developers a way to do trials, it's the closest way a customer can get a taste of an app's features, esthetics before deciding whether to pay or not for an app. EX : I wouldn't have paid 10$ for flighttrack pro without the in app purchase option. I would go as far as theorize that the main reason why the average price for an app has remained stuck at 1$ is exactly that fear of paying for something worthless without much of a recourse. in-app purchases all the way.

Kylekramer 13y ago
Seems like an argument for a sensible trial system, not IAP. I've got no problem with using IAP for a sensible trial system, but it is much more commonly used for smurfberries.
ghshephard 13y ago
It's not In-App purchases, per se that are evil - I've spent around a hundred dollars on new levels (great use of In-App purchase - you reward the developer for creating new content), new tools, new capabilities in the last few years (much less than the the close to a thousand dollars in "up-front" app purchases I've made) - and I think I've gotten real value each time. What's truly evil, is the cognitive manipulation that "free" games engage in on those who are most vulnerable to those manipulative techniques. The "Candy Crushes" of the world. You want there to be a virtuous circle, in which developers are rewarded for creating new, and improved apps; not for buying extra boosters so you can clear the jelly without developing the skill required to (or wait long enough for an easier level). How stupid do you feel purchasing "Diesel" for your "Tractor" in a game? Particularly when you consume it and just have to buy more diesel to continue at any reasonable pace. That's the evil part of In-App purchases - I can show you a dozen places where In-App purchases and/or subscriptions have been very well executed to the benefit of everyone. (LetterPress, Flickr, Whatsapp, Path, evernote, Pioneer Lands, Paper by Fifty-three - just to name a few)
- wahnfrieden 13y ago
  It would be more helpful to show examples where IAP/subscriptions were well executed by your standard and still made it to / stayed in the top grossing list.
  - ProblemFactory 13y ago
    ghshephard gave a good answer to the question "why do many people consider in-app purchases evil". However, there is no doubt that "evil" approaches are more profitable than the doing the right thing. Techniques such as the ones described in http://www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/The_Top_F2P_Monetization_Tricks.php http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949... are very effective, and developers who do use them are likely to make more money. But that doesn't mean that any means necessary to make it into the top 10 grossing apps list must be considered ethical.
mikeash 13y ago
IAP in general is fine, but a lot of these apps are bait-and-switch. They do not make it clear up-front that unlocking critical features requires payment. Games are the worst. There are so many "free" games which simply do not allow you to have fun without spending money. They claim to be free, but then it turns out you have to grind pointlessly unless you pony up the cash. It's gotten to the point where I won't bother with any free app that's listed as having IAPs. I much prefer the "Lite" model, where you basically have a functional demo for free, then a separate paid app. Offer the paid features in the "Lite" version as an IAP too, if you think that helps. What it comes down to is that a good transaction should be a net gain for both sides. I give you money, and in exchange I get something that's worth more to me than the money I give you. We both win! But the way many of these games are done, the creator deliberately makes their game less fun in order to make it more lucrative. It's no longer mutually beneficial. Rather than adding value to get more money from me, they actually reduce value to try to extract more cash.

gdubs 13y ago

I think one of the main reasons it's so hard for new developers to make money is that -- as has been said so often -- discovery is broken on the App Store. The "new" category basically doesn't exist anymore, and even if it did there are a ton of new apps being released _daily_. For everyone's complaints about Apple's stringent review process, there's a ton of crapware on there, which makes customers really hesitant to buy. In [some] ways you're better off charging _more_ money and targeting a highly specific user base. Then you at least have a good shot at reaching the top-grossing lists in niche categories and gaining visibility. Edit: to be clear, there's a lot of different types of apps and the free or IAP route can be the right choice. But, IMO you need something that has mass appeal if you're going to rely on converting small percentages of free users to paid users.

radley 13y ago
It's not just discovery. The land grab is over and established apps are well entrenched. There was a huge first-wave advantage for mobile apps. We just barely caught the end of it ourselves, so we're doing ok.
- deleted 13y ago
  [deleted]
- gdubs 13y ago
  You're right, absolutely. For newcomers, it's an uphill battle to market even if there's no competition in the space.
  - ghshephard 13y ago
    The quality apps will always stand out. I'd tried a bunch of note taking apps before vesper came along - and it put them all to shame. I think I've tried every podcast app out there - and they are all really, really cruddy. I spend 10-15 hours a week with iCatcher, and it reminds me of my Palm Treo 650 - It's the best of the bunch (for me), but it still manages to seriously annoy me every time I use it. If marco gets good traction with his design team (Pacific Helm again?), I'm sure he's going to blow away the "quality" podcast-player market. Only problem is, the market for people who are looking for quality podcast players is probably in the tenths (or even hundredths) of a percent of the iOS users. But, if he makes Overcast free.... I'm very interested in seeing how he manages to In-App charge for a free podcast player.

jarjoura 13y ago

It's all about value-add really regardless of whether someone assumes it "comes from Apple" or not. If it's obvious what the value-add for your application is in the app store, then pay-up-front works. One problem is, 5 screenshots and non-rich text descriptions really make that hard.

Osmium 13y ago

Flip-side on the IAP suggestion: I despise ads, but if I have an app with ads I can't bring myself to buy an in-app purchase to remove them for an app I probably won't use that often. Whereas if the app was just $.99 to start with, and it looks decent, I'd happily buy it even if I don't use it much. I wonder how this attitude would differ depending on whether you're an early adopter of the technology or whether you're just getting your first smartphone. I come from the Mac sphere where it's entirely reasonable to spend a lot of money on a good app (I'm considering paying $90 to upgrade to the latest OmniGraffle for example), so buying apps on a phone where most are super cheap doesn't seem so bad to me. Either way, I think losing the paid app market is a Bad Thing. Quality apps are expensive to make, but I have an expensive phone; I don't then want to load it up with cheap, ill-designed apps. It doesn't matter how good the phone is if the apps are crap.

eropple 13y ago
> I don't then want to load it up with cheap, ill-designed apps. The depressing thing to me is how much of a minority thing this is. It's not platform-specific; Android sales have always lagged iOS in general, but the aggressive ugliness of Android apps and cheapness of Android users (don't get me wrong, fellow Android people, I use them as my daily drivers, I prefer them) has now just made the jump to iOS. Which is insane. But, hey.

radley 13y ago

On Android a common method is free / prime. A free version has basic features while a paid prime apk acts as an unlocker for advanced features. Haven't heard of removing a free app and replacing with a paid. That doesn't make sense or work for anyone. That free app is an essential promotion. The only downside/difficulty is all the user support. Free users can be pretty rough.

ghshephard 13y ago
The two removals mentioned by marco in his article were not a case of removing a free and replacing with a paid. In one case, it was removing the free competition to an already existing paid application. (Only works if there isn't other free competition in the market) The other case has started to really annoy me - it's where developers are starting to remove their version 1 application, and replace it with a version 2 which you have to purchase. The only problem with that, is if you were perfectly happy with version 1, you can no longer migrate it to your next Laptop/iPhone - because it's been removed from the market. Somewhat defeats the value of keeping your content in the "Cloud" - you are back to square one where you have to have local copies of everything because you never know when the developer is going to yank your functional version.
- josephlord 13y ago
  You can transfer the apps from iTunes even if they are no longer available. You can even keep old versions if you copy the .app files or rescue them from the recycle bin after the updated version is available. I suspect you can only install them on devices attached to the correct account and I'm not sure what happens with the Mac App Store (or Google Play, Windows store etc.)
- kazagistar 13y ago
  You seem to be under the impression that you own the content, as opposed to it being rented to you at the whim of the companies involved.

k-mcgrady 13y ago

In my experience it's gradually gotten worse over time. Up until someone in 2010 charging people $1-3 up front worked well for me. Then sometime in 2010 it slowly stopped working as more of the 'top' apps switched to a free with IAP model. Consumers didn't want to pay up front for an app from an unknown developer when people like EA were giving their apps away for nothing.

toyg 13y ago
In Europe, 2010 is when people lost their jobs because of the 2008 crash. I bet people like EA switched to IAP because they felt it was a way to bypass the newly-developed austerity mindset.

radley 13y ago

One thing I think he overlooked was the benefit of cross-promotion through a proven track record. Had he held on to his old apps, he would have been able to leverage them to promote his new app. Now he has to start from scratch, using only his blog to promote it.

ghshephard 13y ago
"only his blog" (...and his conference appearances, and wildly popular podcast, and twitter feed, etc.. Marco is a well-honed promotion machine.)

radley 13y ago

There's really nothing new here. There was only a brief window during which you could immediately charge for mobile apps. Desktop software has relied on try before you buy for a while now. Mobile has simply matured.

miguelrochefort 13y ago

On Windows Phone, every app has the ability to offer a free "trial" version. So you can make a paid app, but still let the user try it (with less features, or ads). I think this mechanism is ideal.

unsigner 13y ago
Windows Phone is not exactly a sterling example of developer success, is it?
- miguelrochefort 13y ago
  What do you mean? Windows Phone has the best mobile programming environment there is. The tools are much better than anything you can find for iOS and Android. I know, I programmed apps on all major platforms. So is it a developer success? I would think so. Is it a consumer success? Not really. But it's consistently gaining marketshare, and is becoming quite popular in Europe. And no, I don't work for Microsoft.

spolsky 13y ago

The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component. The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Trello, which is free, but the business of providing administrative tools to large organizations using Trello can sustain the whole business. This is more than just "freemium" or "advertising-supported." Freemium and Ad-supported business models are special cases of this general model. The real insight is that the free product has a chance to reach an enormous audience which provides distribution/advertising/marketing making it trivial to go to market with your paid product. What Marco is reporting here is that the old-fashioned "make something and get people to pay for it" business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.

Swizec 13y ago
Unless the cost of maintaining a 100x userbase outweighs the combined $$ value of the value added feature for the 1%.
krmmalik 13y ago
What are your thoughts on say something like a video course? i.e giving it away for free and doing an upsell on consulting or stick to charging for the course?
- ghshephard 13y ago
  That's the twitter/blog model for a lot of people. They give away really great content, build their brand, and then hold conferences/sell t-shirts, etc... The only challenge with that is you have to be really skilled/gifted to get traction in a very noisy environment. The other challenge with something like "consulting" - is that you don't get a lot of opportunity to scale - you are limited by the number of hours a day you can work (as opposed to conferences, where you are limited to the size of the venues you can book/fill)

markkanof 13y ago

I general Marco's points seem accurate, except for the first one. I've mentioned to many people that I build iOS apps and never have I had someone assume that I work for Apple. There are certainly various misconceptions about the app business (ie. it's an easy ticket to millions), but assuming I work for Apple is not one of them. These are "regular" people that have no knowledge of the Apple or tech sphere, other than owning a smartphone. Doctors, teachers, retail employees, elderly relatives (who have no idea where I work), all sorts of different people. There is definitely some interesting psychology going on with regard to the amount anyone is willing to pay for an app, but I really don't think believing the developer works for Apple has anything to do with it.

nawitus 13y ago

>Everyone outside of the immediate Apple tech sphere assumes, since I make apps for iOS, that I work for Apple. Interesting. I've never heard anyone having this misconception. Everyday people seem to know that app developers are completely different from Apple or other mobile phone manufacturers.

giovannibajo1 13y ago
Agreed. On the other hand, basically everyone but developers believe that billing/CC problems in the applications stores are developers' fault.

mrtron 13y ago

Lately I have been thinking a lot about the giant leap of faith you have when installing an app. There is no free trial, and most apps you can't understand until you start using them. One of the biggest gaps is games - most promotional videos do not even display in-app activity. I think most of us would pay for instagram and twitter now. I would have to think twice about it above 20$/month. I don't think they could get to where they are with a paid app model. I tried out a few ways to solve this problem. Better app landing pages. Better app videos. Nothing works, apps are an experience. Also their utility skyrockets in certain situations. Twitter is essential when something major is happening, like an earthquake in your area. Instagram is essential when you want to e-brag. Yelp is essential when you have a group of people deciding where to eat. The barrier to pre-installing the app needs to be incredibly low, and the ease of use for a noob needs to be low.

angryasian 13y ago
I think its a little naive to think that users wouldn't jump to another network, if they started to charge. I think what mobile has proven is that the micro social networks are easy to start and can get big fast because of people reluctance to stick with a single solution.

crazygringo 13y ago

Is there anything in the app store TOS preventing developers from releasing, for example, free versions that are 14-day trials, that are upgraded to full version in-app, or else stop working? I have nothing against paying for apps, but after having been totally burned a bunch of times, I refuse to pay for an app I can't even try out first. Lots of people say "just look at the reviews", but they usually don't tell you what you want to know -- it's not a substitute at all.

cmelbye 13y ago
Yes, that's not allowed.
ghshephard 13y ago
From: "http://www.makayama.com/checklist.html" http://www.makayama.com/checklist.html" Time trials are not allowed, if they completely disable the app's use. Also restrictions such as limiting the number of runs are not allowed. Apps should have core functionality that does not expire. However, you can use In App purchase to let certain features expire and then charge to unlock these again.
smsm42 13y ago
IMHO this (disallowing trials) is a big mistake. I very rarely would buy an app that I can't try. Of course I can afford to lose $1 or whatever - it's not the cost but the fact that I had been scammed what would infuriate me. It would only make sense for the app makers to turn my loss aversion against me - if I already used the app for a couple of days and liked it, now the choice for me would be "lose it or pay measly $2" - and that would be completely different game. Given that Apple exercises total and absolute control over the whole ecosystem, it could easily make trial system that makes apps free for 3 days (or 15 days if the developer chooses) and then makes them stop working until you pay. I think it would make Apple ecosystem much more friendly to the user, because frankly reviews are usually worthless and screenshots etc. are not much help either.
- icelancer 13y ago
  I completely agree. Apple contributed to the death of the up-front paid app by disallowing this. It's ridiculous.

FollowSteph3 13y ago

People say they are willing to pay but more often than not they look not to pay. Same as airlne tickets. Everyone complains the service and quality is terrible yet everyone is always looking for the cheapest price. It's the real consumer behavior drives the markets rather than our idealized behaviors ;)

libovness 13y ago
Totally agree. If you had four movie theaters that: 1) Charges $12 up front 2) Shows the movie for free with ads 3) Allows you to decide if you want to pay $3 for each quarter of the movie Easy: #2 or #3, then #1.
- klaasmer 13y ago
  You would rather watch the movie with ads?? Really? I would pay to get rid of ads everywhere.
  - sjs 13y ago
    That is not a popular stance. See cable television.
    - riobard 13y ago
      Sad thing is, even if we pay, we still get ads. Like before the movie is shown. Apparently we don't pay enough.
      - daemin 13y ago
        This happens in Australia as well, the cable TV channels actually show more ads than comparable ones on free to air TV. It seems that because you're comfortable paying for a product that you're actually more valuable to advertise to.
    - pietro 13y ago
      See Netflix.

leefrank 13y ago

my friend's mother-in-law makes $76/hr on the internet. She has been fired for 9 months but last month her payment was $14190 just working on the internet for a few hours. this big57.com

berzniz 13y ago

There is one hack that seems to work. Keeping the app free for its first week on the store. This gets the app in the hands of the right people, the "early adopters". If the app is good, they'll use it and recommended it to friends long after the promotion week is over. People are not afraid to pay when the trial was confirmed as a success by their friend (who is an iPhone genius).

mesozoic 13y ago
Do you have any case studies of this you can refer us to?
- berzniz 13y ago
  Can't provie it, but I'm seeing this for my own app (It's in Hebrew and quite successful in Israel http://bitly.com/DriveModeHeb http://bitly.com/DriveModeHeb ) and other previous apps.

xamdam 13y ago

Dude made searching my own instapaper articles on my own device a "subscription service", I switched to Pocket just for that. Unforgivable existing-customer f*king.

pc86 13y ago

To the App Store developers out there: is it even worth getting into this market? I've dabbled in Objective C/iOS development, but never built a full app. Never released anything into the app store. I've been looking for something to direct my free time toward and was thinking this would be it, but I've read an increasing number of articles like this essentially stating that the single-developer part-time app model is dead and you'll be lucky to make enough to pay the $99 to Apple every year.

kristianp 13y ago

I apologise in advance, but what is the significance of the "Underscore" in the article title?

smackfu 13y ago
The podcast he references is by David Smith, who uses _davidsmith as a twitter handle, and then gets called "underscore david smith" on podcasts.

jonny_eh 13y ago

What's Overcast? He talks about it like I know what it is. I even follow him on Twitter, I must have missed a tweet. Is it a podcast app? Is it out?