Upgrading our thinking on App Store revenues

Every four to six months we get on another round of “Apple’s screwing developers without trials and upgrades.” While I agree it would be awesome to have, I’m on the record as believing that it is too late now. The expectation game was set long ago and App Store prices aren’t going up. Furthermore, the glut of App Store apps makes it hard to raise prices. iOS software has been commoditized.

The real question is how can we, as developers, use what’s given to us to build effective software sales. (Effective meaning “achieve our goals.”) I believe that trials and upgrades, two commonly requested features, are within our reach.

Whether we like it or not, Apple controls what we can do for business models. This is what they give us for purchasing:

  • Pay Up-Front: The first model. This shows the paid amount on the button in the App Store, you buy it and download it and it is yours forever.
  • In-App Purchase: Buy things once the app is downloaded and running on your device.
  • Subscriptions: Renewable purchases that can either be renewed manually or renewed automatically.
  • Free: No cost at all to download.

I will also note that we can use advertising in our apps and purchase physical goods within our apps.

There are some App Store review guidelines that are worth considering in this discussion.

  • 2.9: Apps that are “demo”, “trial”, or “test” versions will be rejected. Beta Apps may only be submitted through TestFlight and must follow the TestFlight guidelines
  • 11.1: Apps that unlock or enable additional features or functionality with mechanisms other than the App Store will be rejected
  • 11.2: Apps utilizing a system other than the In-App Purchase API (IAP) to purchase content, functionality, or services in an App will be rejected
  • 11.3: Apps that use IAP to purchase credits or other currencies must consume those credits within the App
  • 11.9: Apps containing content or services that expire after a limited time will be rejected, except for specific approved content (e.g. films, television programs, music, books)
  • 11.13: Apps that link to external mechanisms for purchases or subscriptions to be used in the App, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected

Really, section 11 is the big one and these are the applicable rules, I think. It also appears that section 11.9 allows subscription software services as well. There are lots of examples of mobile apps that extend web apps that do allow trials that expire after a period of time or a subscription where the app stops working once the subscription ends.

This is the framework within we must work. So now we need to mix-and-match this framework to get the desired results. A few suggestions of ways we can make money:

  • Charge up front: many of us have been doing this for years and is causing all the consternation so let’s not beat this horse.
  • Advertising: integrated ads, while anathema to so many of us, actually generates good money for the right apps.
  • Donation: give away the app, ask for “tips” to help keep it going.
  • Freemium: have a free app with some paid features.
  • Paymium: have a paid app with additional paid features.
  • Trial: if coupled with a web version, the mobile version can have a trial period.
  • Upgrades: use in app purchase to charge for new features added to the app.
  • Subscription: charge to use the app for periods of time. (For those that hate Apple’s 30% cut you can charge for this on your web site and activate with a login and password in the app. You can’t advertise that fact within your app, though.)
  • Free: give away the app and charge for something else.
  • Physical Goods: make something and use the app to promote it.

You’ll notice Trial and Upgrade can be done if we think through our business models carefully enough, and are willing to take the plunge into expanding beyond iOS development.

As Rob Rhyne said at the Release Notes conference, it’s not too hard for independent developers to make money on the App Store. It’s just hard for independent developers to make money.

One thought on “Upgrading our thinking on App Store revenues

  1. I disagree that iOS software has been commoditized, at least not the professional and pro-sumer apps. The issue of upgrade pricing and trials will be more of a problem as Apple pushes iOS into the professional sphere with iPad Pro. The current pricing options are too limiting for sustaining small teams.

    People don’t want a subscription for everything, nor does all software become better with web services. There are a lot of niches that could be served by small teams (high-price/medium-volume), but given the current policies and priorities, Apple seems to be okay with focusing on the mass market and discouraging new entrants from offering high-value software.

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