More on App Subscriptions

Michael Tsai:

I think the best thing that can be said for subscriptions is that they’re honest and mostly align everyone’s incentives properly. Customers will essentially vote with their wallets, on an ongoing basis. Developers who maintain and improve their apps will get recurring revenue. Apple will get more revenue when it steers customers to good apps. Over time, more of the money will flow to the apps that people actually like and use. My guess is that the average customer will end up spending more money on fewer paid apps. Some apps will become more sustainable, but others will be culled.

I’m not sure there’s an easy or ideal way to pull the App Store out of its nosedive into unsustainably low pricing, but subscriptions seem like a good option. They’re clearly imperfect, but they might be a key factor in keeping prices generally low for users as they amortize the cost of development over months-to-years and incentivize regular updates.

It definitely won’t work for every app, though, or even every niche. Once the uncertainty about which apps are eligible for subscriptions is cleared up, I think there are going to be specific qualities that justify a maintenance-style subscription: quality apps for a particular audience, made by indie developers who issue regular updates. And I think it needs all of those factors. Users aren’t going to pay for an app maintenance subscription if the app is of mediocre quality, or if the developer is a huge company,1 or if it is infrequently updated — or, at least, does not have some sort of ongoing justification for its subscription cost.

For instance, Things by Cultured Code is a tremendously good app made by an independent development team. Because it’s updated so infrequently, I think that most users would prefer to pay a flat rate upfront than pay a subscription fee. However, because they’ve built in a proprietary syncing backend, that could justify the cost of a subscription.

Weather Line is another good example. The app is of a very high calibre and is designed for a specific user base, but because it’s not updated frequently and there’s no ongoing service for which they can charge a fee, it’s probably best suited to major version updates that are charged at a flat rate.

This is all still theoretical, of course, especially since Apple needs to clear up what apps will be allowed to use subscriptions. I think it should be open to all, and Apple should treat it as a different pricing model. Hopefully, this will allow for a more sustainable App Store for thousands of indie developers.

  1. I bet plenty of Tweetbot users would pay $0.99 per month to use the app, but virtually nobody would pay $0.99 per month to use the official Twitter client. ↥︎