With all the discussion this week about iOS indie developers and how hard it is to make a living, I was asked whether trial versions would help developers out. My answer is that I am skeptical that it will help¹.
First, refer to the graphic above. This is the classic marketing mix as taught in every college for the past sixty years. In short the marketing mix has four pieces: the product itself, the price you charge, the place where it is sold, and what promotion is used to help people find it. It is often referred to as the 4-Ps.
In the old days of selling software, we leveraged all four of these components. We developed a great product at multiple price points with varying features, promoted it through partners, trade shows, publications, direct sales and various advertising campaigns, and sold it in as many outlets as we could. At one point or another powerOne calculator was sold via our web site, value-added resellers, retail stores, catalogs, online resellers and via other partners. We were particularly good at “place”.
Now, though, you have one choice for place and one choice only: the App Store². This puts insane pressure on the other components of the marketing mix. Because there is only one place to purchase iOS apps, everyone looks there. This means that outside promotion — short of a few well-read publications during the launch — fails most apps. Long-term the App Store is the only place to promote, and there isn’t much room for promotion there. A few pictures, a title, an icon and a description, soon a video, is all we get. It is very hard to differentiate any application with only that. And since differentiation is very hard, prices drop. In the end it is one of the few ways a typical app can differentiate: price.
Why don’t I think trials will impact revenues substantially³? Because nothing about this equation changes. There is still only one place to buy apps, and that one place puts pressure on all the other marketing mix components.
It does offer more promotion opportunity, though, my questioner pointed out. Won’t it mean that high quality apps will rise to the top and lesser apps that aren’t as good will disappear, making it possible that the high quality apps get found more and more in the future?
Maybe, but I’m skeptical. The problem is that the volume of apps in any one category is overwhelming and when supply outstrips demand as it has in the App Store, a minor promotional opportunity like trials won’t make that much of a difference. There are literally hundreds if not thousands of products in some categories, like calculators, note-taking apps, and task lists.
Even in niche markets like podcast clients there are ten or more solid choices. When one solid choice is $.99 and another solid choice is $9.99, the $9.99 app has to be 10x better than the $.99 app to even get consideration, and that’s hard to do among tens or hundreds of alternatives. A little 30-day trial isn’t going to be enough to make the difference for the “expensive” app. Thus the race to the bottom is back on, and indie devs still can’t pay themselves a reasonable rate to make it a full-time job.
¹ Although I hope I’m wrong.
² Android is slightly better but not much. There you have Google Play, Samsung Apps and Kindle Appstore, plus a bunch of smaller players that don’t amount to much.
³ And by substantially I mean enough to make a bunch of indie developers revenue successful when they weren’t before.
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For online products, you just need one reliable place to get it. It’s not like fighting to get shelf space for your brand of potato chips at 7-Eleven! From my point of view as a consumer, I’m happy that all apps are easily and reliably available — I don’t want some developers to be better than others about making sure I can find a copy!
I actually very rarely use the app store to discover apps. I google for app reviews and get recommendations from friends. Even after this, It helps that expensive apps usually have a lite version to try out — it would be nice if the lite version could just be the regular app with a time limit on some features!
While I love word of mouth — we have tons of it — and use Google for reviews as well, neither of those are really promotion. To make a business I need to be able to do some promotion repeatedly and have it produce results (revenue). Serendipity is important, of course, and word of mouth is important but I believe you still proved my point. For most apps the app stores are the primary promotional channel, and most discerning customers don’t use it to discover apps.
Also please note that I’m not arguing that time limited versions aren’t great, I just don’t think they will help much with increasing revenues. Try five apps and still buy one of them for $5 or $1. Believe me, if Apple rolls out trials I will likely be first in line with a trial version of powerOne, and may even raise prices. I’d love to be proven wrong.