“Paid-up-front iOS apps had a great run, but it’s over. Time to make other plans.”
(via Marco.org)
This article from Marco Arment on his pricing strategy for the upcoming Overcast app has created quite a stir. I encourage you as an app developer to read it. There are a lot of valid points in it.
I don’t disagree with most of what he wrote. But when I get to a line like the one I just quoted above, I’m reminded of exactly what bothers me about most blog articles from app developers: “This is true for me, so it must be true for everyone and every other app in the universe.” The one-size-fits-all mentality that caused the race to the bottom in the first place continues.
If I were Marco, making a podcast app for iOS, I’d be considering seriously something other than a pay-once-up-front business model. Of course, I’m not going to be making a podcast app anytime soon, because I have no intention of getting into what’s already a crowded and I think pretty well-served market. Nor would I want to compete with his new app by any means. I’m sure it’ll be good, and deservingly successful.
There are many other kinds of apps where moving to this sort of model might make a lot of sense, too. It’s certainly worth careful consideration. But the problem arrives when you assume that all iOS users think and behave alike, and therefore all apps must be monetized similarly.
If we were to convert Teleprompt+ to the free with in-app purchase model, for instance, the three of us at Bombing Brain would be out of business in a couple of weeks.
Our customers are primarily prosumers and pros—people who wouldn’t trust their business to a “free” app. Our high price is a large part of what has made us successful in this market. (Along with years of cultivating a reputation for being better than our competition.) Converting this particular app to free with in-app purchase now would likely be an unmitigated disaster. We know, because there have been free alternatives that have crashed and burned. Hard.
Our target customers, the few who don’t blink at $15-$20 for an iPad app, are completely oblivious to the entire “free” app market. Free = invisible to them when it comes to finding solutions for their businesses.
To be fair, I don’t think Marco is actually suggesting that companies like ours change business models. But I do fear that too many developers read posts like this and walk away with that impression.
The fact is, there is a whole world of untapped potential on the App Store for developers who can solve real problems for people who are happy to pay. I’ve said it a million times, but it bears repeating: it’s not about price; it’s about trust. People are willing to spend money if they are sure what they are getting will solve their problem.
Is it easy to convince people that your app is worth a fair price? Of course not. Does that mean that you should make your app free in hopes of enticing a small percentage of people to convert to “paying” users? Not necessarily. Not for every kind of app, at least.
Giving a limited app away for free and charging to make it feature-complete is, in theory, one way to build trust. But given the reputation in-app purchase has acquired over the past few years, it’s going to take serious convincing before professionals, prosumers, and small business owners view IAP as anything but a scam in the short term. This is unfortunate, but you will be judged by the unscrupulous developers who have abused IAP before you, whether you like it or not. So you’re going to have to work even harder to gain that trust than you might think when associating yourself with this pricing model.
While it is true that the vast majority of iOS users scour the App Store looking for free alternatives, there is a not-insignificant number of users who wouldn’t go near a “free” app with a ten-foot pole. In their minds, free-with-in-app-purchase apps are all essentially Candy Crush.
So the risk is gaining a large number of users who are unlikely to pay you and who will write tons of bad reviews, while completely turning off the most valuable demographic in the Store.
Users looking to pay a premium price may be few and far between, but each one is ten times more valuable than the “average” iOS user to a developer like me.
Then there’s also the bulk of the education market to consider, which can’t, as a matter of policy, use any app with in-app purchase.
The point is, there are lots of different kinds of users in the App Store. And you need to know which ones are the most likely customers for your app. Don’t go treating them all equally.
Marco’s argument is essentially one of market share. He views total number of users as the primary goal. He wants to target as large a percentage of the total iOS user base as possible. That’s a perfectly valid business model that has worked for many. And for a podcast app, I think it’s a smart way to go. But it’s not the only way to skin this cat.
There are millions of iOS users in the world. I only need a tiny fraction of the right users to be successful.
I guess what I’m saying is, take everything you read from other developers (including myself) with a grain of salt. There’s no one way to be successful at this thing. Different apps in different markets, with different audiences, command different business models. You need to think about how you want to monetize your app long before you start building it. Consider all the options carefully. But don’t dismiss any of them out of hand because of what one or two others have experienced.
I’m happy that more devs are experimenting with in-app purchase as a legitimate way to encourage people to “try before they buy.” Look no further than MoneyWell for iPad as a primary example of IAP being used with positive results. Of course, this is an established company with a paid companion Mac app that already has a reputation for quality. Your mileage may vary. And, as Kevin Hoctor himself admits, his preliminary numbers are likely to be skewed for at least a few more months. But maybe in the long run, in-app purchase will gain the trust of users that currently avoid free apps like the plague. I think it’s going to be a long, uphill battle.
I look forward to seeing how other such experiments from other developers go. In the meantime, be cautious with anyone who tells you there’s only one way to go about doing things on the App Store.
