{"id":17912,"date":"2017-05-06T10:37:06","date_gmt":"2017-05-06T14:37:06","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=17912"},"modified":"2017-05-15T15:00:33","modified_gmt":"2017-05-15T19:00:33","slug":"phil-schiller-on-app-store-upgrade-pricing","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2017\/05\/06\/phil-schiller-on-app-store-upgrade-pricing\/","title":{"rendered":"Phil Schiller on App Store Upgrade Pricing"},"content":{"rendered":"

Kunal Dua<\/a> interviewed Phil Schiller (via Federico Viticci<\/a>, Steve Troughton-Smith<\/a>):<\/p>\n

\n

The reason we haven’t done it is that it’s much more complex than people know, and that’s okay, it’s our job to think about complex problems, but the App Store has reached so many successful milestones without it because the business model makes sense to customers. And the upgrade model, which I know very well from my days of running many large software programmes, is a model from the shrink-wrapped software days that for some developers is still very important, for most, it’s not really a part of the future we are going.<\/p>\n

I think for many developers, subscription model is a better way to, go than try to come up with a list of features, and different pricing for upgrade, versus for new customers. I am not saying it doesn’t have value for some<\/em> developers but for most it doesn’t, so that’s the challenge. And if you look at the App Store it would take a lot of engineering to do that and so would be at the expense of other features we can deliver.<\/p><\/blockquote>\n\n

On the other hand, subscriptions aren’t available for all types of apps, are more difficult to implement and use, and—except for really high-priced apps—customers seem to dislike them compared with upgrade fees.<\/p>\n\n

Previously: Software Pricing Damage<\/a>, App Store Subscriptions Clarification<\/a>, Pre-WWDC App Store Changes<\/a>.<\/p>\n\n

Update (2017-05-06): Mark Munz<\/a>:<\/p>\n

I’ve never seen the level of anger from loyal customers like when topic of subscriptions was brought up.<\/p><\/blockquote>\n\n

Michael Love<\/a>:<\/p>\n

I’m fortunate that my biz model allows me to monetize old users w\/o upgrades, but does affect what I spend time on.<\/p><\/blockquote>\n

We’ve also done a major, time-consuming UI refresh on iOS, and two of them on Android, since those have a big impact on new customer sales.<\/p><\/blockquote>\n

But making a heavily-used feature better in ways that are only obvious to people who already bought it is not a very profitable proposition.<\/p><\/blockquote>\n

Whereas with paid upgrades, making a heavily-used feature better in ways that are obvious to existing customers is how you make money.<\/p><\/blockquote>\n

In other words, existence of ‘professional’ apps is kind of a happy accident that relied on historical circumstances we may never see again.<\/p><\/blockquote>\n\n

Update (2017-05-07): Marco Arment<\/a>:<\/p>\n

Paid upgrades aren’t always<\/em> bad, but I think he’s right that they’re ideal for a pretty narrow niche relative to the entire App Store.<\/p><\/blockquote>\n\n

Siddhartha Oza<\/a>:<\/p>\n

Since OS upgrades are always free, I doubt we will ever see upgrade pricing.<\/p>\n

Apple can’t allow OS to upgrade and a few apps stop working.<\/p><\/blockquote>\n\n

Andrew Hart<\/a>:<\/p>\n

It’s how well paid upgrades do on the Mac, and how often they’re utilised, that convinces me otherwise.<\/p><\/blockquote>\n\n

Peter N Lewis<\/a>:<\/p>\n

Upgrade pricing is not about “value for some developers” - it is about ensuring value for existing users by closing the feedback loop.<\/p><\/blockquote>\n\n

Dan Counsell<\/a>:<\/p>\n

Hands up if you’re a user and prefer subscriptions rather than paid upgrades for apps.<\/p><\/blockquote>\n\n

Jeff Johnson<\/a>:<\/p>\n

There’s a mix of app buyers:<\/p>\n

1. Always upgrade posthaste<\/p>\n

2. Upgrade years later<\/p>\n

3. Never upgrade<\/p>\n

Subscriptions scare 2 & 3 from buying app.<\/p><\/blockquote>\n\n

Diane Ross<\/a>:<\/p>\n

Apps that I recommend with subscriptions scare away 9\/10 users.<\/p><\/blockquote>\n\n

Matt Gemmell<\/a>:<\/p>\n

This Schiller interview’s segment re app upgrade pricing seems extremely disingenuous. The issue isn’t “complexity”.<\/p><\/blockquote>\n\n

Will Cosgrove<\/a>:<\/p>\n

Major eye rolls when I read this quote. They want apps to be free and ad supported or VC funded money losers.<\/p><\/blockquote>\n

Traditional devs have no place in the app store. No one, including Apple, wants to pay for the work involved iterating apps.<\/p><\/blockquote>\n\n

Ivan Vučica<\/a>:<\/p>\n

I love “App Store has one price for an app, when you see it, you see if there’s a price on it, that’s the price” <- what are IAPs then?<\/p><\/blockquote>\n\n

Update (2017-05-12): Dan Counsell<\/a> (tweet<\/a>):<\/p>\n

The idea that developers will be able to charge their users a few bucks a year and make a living from it is bonkers. You only have to do the maths to see this is going to be tough for anyone what tries it[…]<\/p>\n

[…]<\/p>\n

No sane person wants to subscribe to each app they use on their phone.<\/p>\n

Here’s how I’d like monetise my apps on the App Store:<\/p>\n

I release version 1.0 of my app on the App Store. I continue to ship free updates just like I do now. Then when I’m ready to release version 2.0, the App Store can prompt all my existing users and asks if they’d like to purchase the upgrade. The user can choose to upgrade then, or ignore it.<\/p><\/blockquote>\n\n

Kirk McElhearn<\/a> (blog<\/a>):<\/p>\n

Apple doesn’t generally use the excuse that something is too hard. But Schiller makes it clear hear that this process is complex.<\/p><\/blockquote>\n\n

Update (2017-05-15): Ben Thompson<\/a>:<\/p>\n

\n

Still, even if the U.S. government is less to blame than Smith insists, nearly two decades of dealing with these security disasters suggests there is a systematic failure happening, and I think it comes back to business models. The fatal flaw of software, beyond the various technical and strategic considerations I outlined above, is that for the first several decades of the industry software was sold for an up-front price, whether that be for a package or a license.<\/p>\n

[…]<\/p>\n

The truth is that software — and thus security — is never finished; it makes no sense, then, that payment is a one-time event.<\/p>\n<\/blockquote>","protected":false},"excerpt":{"rendered":"

Kunal Dua interviewed Phil Schiller (via Federico Viticci, Steve Troughton-Smith): The reason we haven’t done it is that it’s much more complex than people know, and that’s okay, it’s our job to think about complex problems, but the App Store has reached so many successful milestones without it because the business model makes sense to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":"\"\"","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[2],"tags":[91,1421,101,31,1380,30,39,1381,1372],"class_list":["post-17912","post","type-post","status-publish","format-standard","hentry","category-technology","tag-appstore","tag-app-subscriptions","tag-business","tag-ios","tag-ios-10","tag-mac","tag-macappstore","tag-macos-10-12","tag-phil-schiller"],"apple_news_notices":[],"_links":{"self":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/17912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/comments?post=17912"}],"version-history":[{"count":14,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/17912\/revisions"}],"predecessor-version":[{"id":17996,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/17912\/revisions\/17996"}],"wp:attachment":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/media?parent=17912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/categories?post=17912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/tags?post=17912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}