Wednesday, January 25, 2017 [Tweets] [Favorites]

Setapp Goes Live

Setapp:

Setapp gives you a growing suite of hand-picked apps in one signup. There’s no store — just a folder on your Mac, and no hidden costs — just a flat monthly fee.

[…]

There’s no need to dig through hundreds of App Store listings, search for reviews, and compare prices: with Setapp, you always have the best app for the job. It’s like getting all the apples, while someone else does the picking.

[…]

Setapp gives you access to shiny new software versions without charging any extra for upgrades. Every app you see on Setapp is yours — and we do mean the app, not just the current version.

As a developer, I’ve declined to participate so far, for a number of different reasons, but it will be interesting to see how this goes. Revenue based on usage could work very well for some types of apps and very poorly for others. As a customer, I already own a few of these apps, and it doesn’t seem to make sense to subscribe on the chance that I’ll need others in the future. I’d also be a little worried about developers pulling out right before an upgrade.

John Voorhees:

For a flat subscription fee of $9.99 per month, customers can download any of the 61 apps and use them as long as they continue to make monthly payments. After MacPaw receives a 30% cut of customers’ subscription fees, developers who participate in Setapp are paid based on a formula that accounts for the price their apps are sold for outside the service and whether customers use the apps each month, which MacPaw tracks.

[…]

If Setapp helps developers build sustainable businesses by attracting new users, I’m all for it, but I’m skeptical. There’s a tension here. Customers are being offered an all-you-can-eat buffet of apps. The more apps that are used, the better the value for customers. At the same time, the more apps a customer uses, the less each developer of those apps gets paid. That might be fine if these are customers the developers wouldn’t attract without Setapp, but what if each Setapp user means one less full price app sale? […] Setapp feels like a short-term solution to a long-term problem that I’m afraid will hurt developers in the end by driving average app prices down even further.

Juli Clover:

Using one of the Setapp apps does require a subscription, so access is revoked if a subscription is canceled. An online connection is required for updates, but all software can be used offline.

Marcus Fehn:

We see Setapp as an interesting opportunity for a certain kind of user, and we want to be part of that opportunity. […] For us, Setapp is just another way to get Ulysses into the hands of users. It’s an option.

Update (2017-01-26): Adam C. Engst:

So let’s take the sample set of apps I mentioned above and see how that breaks out (with round numbers). Of a single user’s $10, $7 goes to the developers and $3 goes to MacPaw. That $7 is distributed among five apps that cost $291 proportionally by list price, broken out into 17 price tiers with individual multipliers. Assuming I’ve understood MacPaw’s documentation right, each app in this example would earn about 30 percent of its list price in a year. The more apps you use, though, the less each developer will earn.

Update (2017-02-09): Dan Counsell:

You might also be wondering what happens if a developer removes their app from Setapp as this has potential to be catastrophic from a users point of view. The good news is you get to keep the app installed at its current version. I think this is an extremely well thought out feature. It’s reassuring to know that an app you rely on won’t suddenly disappear from your Mac when you need it most.

[…]

The only real downside from a developer perspective is that every release has to go through a review process, just like the Mac App Store.

Update (2017-06-29): Adam C. Engst:

Nearly halfway through Setapp’s first year, it’s time to take a look and see how it’s doing. Most notably, the number of apps available to subscribers has grown from 60 to 77 (from 69 developers), providing users with lots more functionality without sacrificing quality or providing many nearly identical apps.

[…]

Setapp now has 10,000 paying users and another 200,000 people who are using it in the free 30-day trial mode, which can be extended by encouraging a friend to sign up. Those aren’t Apple-level numbers, of course, but they’re respectable for just a few months.

I polled a few developers who are participating in Setapp, and although all of them remain optimistic about Setapp’s potential, Setapp hasn’t contributed significantly to the bottom line for any of them.

Update (2018-02-01): Setapp:

Nevertheless, one year later we have 107 apps on the platform with over 300,000 users and $1.5M in ARR. And we are growing fast.

7 Comments

"As a developer, I’ve declined to participate so far, for a number of different reasons"

Yeah. I certainly don't see why this would be a good idea for a developer with a product line like Michael.

But beyond that, I really don't see the utility of this for a consumer. I'm sure there are use-case-scenarios I'm not thinking of, but I struggle to see just who it would make sense for.

(I suppose the two I can potentially come up with are nescient Mac users with more money than time who get a certain convenience factor at a pretty high price, and folks who want to sample multiple apps for a few months before canceling the service and then buying the couple they really like.)

"I’d also be a little worried about developers pulling out right before an upgrade."

Oddly, this type of strategy, perhaps pushed even further, is the one advantage I could see for developers. If Setapp picks up lots of subscribers, a dev could put their app in there for six month to get it in front of new users, and then pull it out.

> If Setapp picks up lots of subscribers, a dev could put their app in there for six
> month to get it in front of new users, and then pull it out.

I don't think that would end very well for that developer.

I can actually see why this system can make sense for the developer. As software matures, it's becoming harder and harder to convince people to pay for upgrades. I think that's one of the reason why companies like Adobe have switched to subscription models. But for a small software company, subscription models don't really work that well. A system like this could allow smaller developers to benefit from a subscription model - and thus from predictable revenue without being forced to push out meaningless upgrades in an attempt to get people to pay again.

I can also see why this makes sense for customers: convenience. Instead of having to look through dozens and dozens of App Store listings to find an app you need, you just look through the list of apps you already own via your subscription, with the security of knowing that there is an incentive for the subscription service to weed out bad applications, and only offer good options.

"I don't think that would end very well for that developer."

Yeah. There certainly is a risk for dev blowback, no doubt.

But just to play devil's advocate, what's really the risk here? Folks aren't already using the app prior to it being part of Setapp. Folks aren't specifically paying for that particular app by subscribing to Setapp. And then the app disappears from Setapp. Are more users who tried, liked, and are candidates for purchasing that app going to be permanently alienated from the dev? Or are more such users who've been exposed then going to go on to purchase it? Dunno how it balances out.

>Yeah. There certainly is a risk for dev blowback, no doubt.

I think pulling movies from a service like Netflix works, because either you've watched that movie, and then you don't really need to watch it again, or you haven't watched it, and then you can just watch something else. But with software, you rely on it. You have data that can only be opened with that application. You have tasks you need to do that require that application. Pulling software is basically one step removed from intentionally destroying your customers' data. Who would trust a software company that does that?

"I'm sorry, I guess you can't hand in your taxes on time this year, because the application you used to track your receipts was just stolen from your computer."

Not the kind of behavior that will make people give you their money :-)

@Lukas Yes, that’s one thing I thought about as a developer. How could I get out without angering customers if it ends up not being good for business? The App Store has kind of the same issue, but because there’s no promise of all future upgrades, it’s straightforward to give people licenses for whatever version they first bought (or the current one).

Although the Netflix behavior is one reason I’m no longer a member of that service. We don’t watch that much TV, so it’s a totally different proposition to pay a monthly fee for what used to be almost everything vs. a high likelihood of them not having what we want on a given night.

"But with software, you rely on it. You have data that can only be opened with that application."

Agreed entirely. I almost added that kind of caveat to my "devil's advocate" position. My strategy would only sensibly work for apps that don't create documents that keep data in a proprietary format.

But lots of apps fit that requirement.

(And, of course, that is the risk for an app like Ulysses in being part of Setapp. If they ever decide to stop participating, they'll leave folks really pissed off. Of course, some of those folks would still end up buying the app as their least bad option, but the blowback there would be nasty enough that even my "devil's advocate" position would shy away from recommending it for the dev.)

"Although the Netflix behavior is one reason I’m no longer a member of that service. We don’t watch that much TV, so it’s a totally different proposition to pay a monthly fee for what used to be almost everything vs. a high likelihood of them not having what we want on a given night."

While I personally share your distaste for Netflix current strategy, it does seem to be working for them. They've made a conscious decision to spend less on having a big library of compelling films, in order to spend more money on original programming. Their theory, which so far is working out in the marketplace, is that the original programming makes them more of a "must have" service.

But personally, I'm not a fan of their original programming. For my taste, I just don't think they're good at it. We've made it though an entire season of only two of their shows in all these years. So as their movie library got thinner and thinner, I finally cancelled for the first time since '09 and reallocated the money to Amazon a-la-carte and the kickass new arthouse streaming service FilmStruck. But like I say, Netflix' shift does seem to be working for them among the larger audience. De gustibus non est disputandum.

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