App Store Pricing On the Move
On episode #112 of The Talk Show, Paul Kafasis joins John Gruber to talk baseball and doorbells - but starting at the 2 hour mark of the episode [footnote] Podcasts can't longer than 30 minutes and be successful! they say.[/footnote] they have an interesting discussion about app pricing in the iOS App Store.
They come to the conclusion that for a certain genre of app on the App Store - productivity/tool apps - it's not sustainable for developers. If developers can't make money, they won't be able to continue developing. Period.
There's some interesting factors that affect developers inability to make money on the App Store:
- No upgrade pricing. On the Mac, outside of the Mac App Store, developers can offer a new version that sells for $50 but offer it for $25 to people who had bought the previous version. On the iOS App Store it's either sell it as a new app or give it away for free to all previous purchasers.
- Apple's sold 1 billion iOS devices. Which seems like a huge market. But how many of those devices are actually used by individuals? In our own house we have 2 iPhones, an iPad and an old iPod touch that all use the same App Store account. 4 devices, one sale to the developer.
- The race to the bottom that has long been a struggle with all things online. Apple, as great as design as they're supposed to be, hasn't been able to figure out a way to design an App Store that surfaces great apps, not just popular apps.
- Related to that: the occasionally insane success story of a small development team making millions off of an app masks all the great developers who give up after one or two apps because they can't make a living. See Panic's 2014 annual report where they spell out their amazing iOS apps don't make them as much money as their Mac apps despite selling basically the same unit numbers on both platforms. It's troubling if a development shop like Panic can't make it.
Gruber and Kafasis started their discussion with the fact that Gruber's app, Vesper, is raising it's price instead of dropping it. And Gruber, in an interview with Jason Snell for SixColors.com, calls on to other developers to join them:
Instead, we want to embrace the users who are looking for the best app, and who are willing to pay a fair price for it if they think Vesper might be it. Going low didn’t work; we lose nothing by trying to go high. I would like to see other developers follow.
I'm all in favour of developers raising pricing for quality apps. You don't have to be a professional software pundit to figure out that $0 for software isn't sustainable as a business model - even with crappy ads thrown overtop.
Until Apple figures out a better way to search the App Store though, cheap apps will always rise to the top. Hopefully some of Apple's recent hires, such as former Mac journalist Chris Breen, point to a more curated App Store.
In much the same way as I rely on blogs and the people I follow on Twitter to point me towards great apps, the average App Store user needs help sorting through the millions of apps to find the best ones in whatever category of app they're searching for.
If you're at all curious about the history of the iOS App Store, you should listen to Myke Hurley's excellent series starting with episode #27 of Inquisitive: Behind the App. Even as someone who was around during the unveiling, it's amazing how much has changed in what feels like a relatively short time.