{"id":22450,"date":"2018-08-14T16:09:54","date_gmt":"2018-08-14T20:09:54","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=22450"},"modified":"2021-05-20T10:59:21","modified_gmt":"2021-05-20T14:59:21","slug":"2-years-of-app-subscriptions-2-0","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2018\/08\/14\/2-years-of-app-subscriptions-2-0\/","title":{"rendered":"2 Years of App Subscriptions 2.0"},"content":{"rendered":"

Kif Leswing<\/a> (via Dan Masters<\/a>):<\/p>\n

Developers, Apple said, needed to realize the business model of apps was changing. Successful apps tended to focus on long-term engagement instead of upfront cost. Indie developers who wanted to capitalize on this needed to move to a subscription model, as Apple had made possible in the past year in a splashy announcement.<\/p>

[…]<\/p>

10 years later, the App Store isn’t new anymore, and Apple continues to tweak its rules so that developers can create sustainable business models, instead of selling high-quality software for a few dollars or monetizing through advertising. If Apple can’t make it worthwhile for developers to make high-quality utilities for the iPhone, then the vibrant software ecosystem that made it so valuable could decay.<\/p>

Apple’s main tool to fight the downward pricing pressure on iPhone apps is subscriptions.<\/p>

[…]<\/p>

Still, even with some hammer-makers finding huge success, the majority of Apple’s subscription revenue doesn’t appear to come from apps that are specific tools — instead, it’s coming from big content businesses like Pandora, HBO, and Netflix.<\/p>

“My suspicion is that a good portion of those subscriptions are content subscriptions,” independent Apple analyst Neil Cybart wrote in May.<\/p><\/blockquote>\n\n

I love how this is framed as Apple enlightening developers that one-time purchases are not a sustainable model. Developers had been trying to tell Apple this since day one of the App Store, and even when Apple did add subscriptions it limited which apps were allowed to use them.<\/p>\n\n

Two years later, at least judging from my iPhone’s home screen, the transition to subscriptions has barely begun. There remains a high implementation hurdle<\/a>.<\/p>\n\n

Previously: Productivity Apps and Subscription Pricing<\/a>, Pre-WWDC App Store Changes<\/a>.<\/p>\n\n

Update (2018-08-15): Steve Troughton-Smith<\/a>:<\/p>\n

\n

Apple is without a doubt preparing for a world without paid-upfront apps. There are a lot of developers who are not gonna like where things are leading[…] IOW, the App Store was so big and impactful that it’s going to ruin the consumer software industry’s business model forever. As a user, I would love<\/em> a Netflix-style model for apps. As a developer, this is horrifying<\/p>\n<\/blockquote>\n\n

Joseph Slinker<\/a>:<\/p>\n

\n

Apple created a self fulfilling prophecy in not allowing paid apps to have a trial period. If Apple added the option for people to try paid apps before they bought them, I would predict a hug change in this trend.<\/p>\n<\/blockquote>\n\n

John Gruber<\/a> (tweet<\/a>):<\/p>\n

\n

Up front paid apps are going the way of the dodo. Whether you think that’s good or bad, it doesn’t matter. That’s where things are going.<\/p>\n<\/blockquote>\n\n

Riccardo Mori<\/a>:<\/p>\n

\n

So, Apple is pushing the subscription model for apps... This may be the future, but it’s not going to be my future as a customer. I have no problems paying a bit more for quality apps, but either it’s pay upfront, or it’s highly unlikely I’ll subscribe to an app. Sorry, devs.<\/p>\n<\/blockquote>\n\n

Emilio Pavia<\/a>:<\/p>\n

\n

developers should publicly push Apple to deliver a reliable sandbox for developing subscriptions<\/p>\n<\/blockquote>\n\n

Bob Burrough<\/a>:<\/p>\n

The article glossed over an important question. It said 15% of App Store revenue was paid apps, but then started talking about subscriptions. The question is “what constitutes the other 85%?” I think in-app-purchase is the predominant revenue driver.<\/p><\/blockquote>\n\n

Marc Edwards<\/a>:<\/p>\n

\n

Yep, we all know free-to-play games make up the bulk of the revenue. The question is: What kind of platform do they want? These kinds of changes could easily decimate what’s left of the indie scene.<\/p>\n<\/blockquote>\n\n

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

\n

It’s a shame Apple is pushing so hard on this, I understand why, but it’s a shame. The main winner from this will be Apple, not customers, and certainly not developers. Apple comes first, customers second, developers third, that’s the way it’s always been<\/p>\n<\/blockquote>\n\n

Rory Prior<\/a>:<\/p>\n

\n

What they are perhaps missing is that it’s the small devs that keep the Mac relevant for a lot of people. You can run the big dev’s apps on Windows and save a fortune on hardware and avoid a lot of the headaches post 2011 Apple has been inflicting on its users.<\/p>\n<\/blockquote>\n\n

It’s no surprise that paid-upfront isn’t working well, since the App Store doesn’t allow free trials or paid upgrades. But it’s not really designed to support subscriptions well, either. They are time-consuming to implement and difficult to test. They don’t work with Family Sharing. You can’t transfer your app to another developer if you use a subscription.<\/p>\n\n

And what if you already have an app and want to transition it to a subscription model? Unless you want to take away the old version that your existing customers are using, you have to create a whole new SKU. You lose your reviews and ratings, and there’s no indication to customers that the new version is available.<\/p>\n\n

Previously: Panel Discussion on Moving to Subscriptions<\/a>, Ulysses Switches to Subscription<\/a>, Testing Auto-Renewable Subscriptions on iOS<\/a>.<\/p>\n\n

Update (2018-08-16): Gareth<\/a>:<\/p>\n

\n

Subscriptions have to have high value, and deliver someone unique. I subscribe to Office 365 (I just need it) and to Adobe CC photography. Both are good deals. I’m not going to subscribe to a podcast app. Same as Netflix and Amazon Prime. Both worth it.<\/p>\n<\/blockquote>\n\n

Bryan Jones<\/a>:<\/p>\n

\n

Exactly. So Apple attempting to convince “utility” apps that subscriptions “are the present” is just dumb. They’re doing that because they don’t have an actual<\/em> answer to the monetization problem. Nobody does...yet.<\/p>\n<\/blockquote>\n\n

Nick Lockwood<\/a>:<\/p>\n

\n

Up-front purchase doesn’t work well for supporting apps due to maintenance. Paid feature releases also fall down once an app is feature complete.<\/p>\n<\/blockquote>\n\n

Update (2018-08-17): Michael<\/a> Love<\/a>:<\/p>\n

\n

missing in much of the discussion of app monetization is that in the good old days, we didn’t really need to worry as much about apps’ recurring revenue because everything kept working for years without being updated.<\/p>\n<\/blockquote>\n

\n

This phenomenon of developers being encouraged to spend a lot of time\/money updating their app simply to keep it working on the latest OS \/ form factor \/ whatever is really something specific to the mobile era.<\/p>\n<\/blockquote>","protected":false},"excerpt":{"rendered":"

Kif Leswing (via Dan Masters): Developers, Apple said, needed to realize the business model of apps was changing. Successful apps tended to focus on long-term engagement instead of upfront cost. Indie developers who wanted to capitalize on this needed to move to a subscription model, as Apple had made possible in the past year in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"apple_news_api_created_at":"2018-08-14T20:09:56Z","apple_news_api_id":"7670b8c1-7645-42dc-9d62-6783c1b7f911","apple_news_api_modified_at":"2021-05-20T14:59:26Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAABw==","apple_news_api_share_url":"https:\/\/apple.news\/AdnC4wXZFQtydYmeDwbf5EQ","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":[2070,91,1421,1015,31,1472,30,39,1529],"class_list":["post-22450","post","type-post","status-publish","format-standard","hentry","category-technology","tag-anniversary","tag-appstore","tag-app-subscriptions","tag-family-sharing","tag-ios","tag-ios-11","tag-mac","tag-macappstore","tag-macos-10-13"],"apple_news_notices":[],"_links":{"self":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/22450","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=22450"}],"version-history":[{"count":8,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/22450\/revisions"}],"predecessor-version":[{"id":22496,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/posts\/22450\/revisions\/22496"}],"wp:attachment":[{"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/media?parent=22450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/categories?post=22450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mjtsai.com\/blog\/wp-json\/wp\/v2\/tags?post=22450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}