The Future of Apps Is Free

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Once upon a time I listened to the radio. This was, in essence for a teenager without any money, the only way to listen to new music. The good part is that there was always something new to listen to. The bad part was the commercials, the DJs, the commercials, the constant talking… did I mention the commercials? Later I understood the trade-off. Without the commercials there was no radio and that that was the cost of listening to new music.

But that changed. Years later there were many more ways to listen to new music, most of which didn’t require paying a fee to do so. Even in the car, I now carry iPods and iPhones loaded with music and podcasts that don’t require me to listen to commercials at all. So now music is free. And when things go free there is no going back.

Apps, for all intensive purposes, have tipped. They are now free. And there’s no use trying to treat them as anything but.

I do indeed pay for some software but it is becoming more and more clear that the apps I rely on the most are, in essence, free. Evernote and DropBox, free. For all intensive purposes the operating systems I run are now free. Google apps, free. Email, free. Web browsers, free. Almost everything I use now is either so ridiculously cheap that it is practically free or is really free. If the app isn’t free now, it will be in the next few years. In certain niches this won’t be the case, but in mass market apps, products aimed at the masses of consumers, what we used to call horizontal software products, are or will shortly be free.

This trend is not worth fighting. It is what it is. As a software developer I have a choice: I can either focus on a very targeted niche application so I can continue to generate product sales, or I can come to terms with the fact that software will be free and consider new models to generate income. Check out this list of amazing revenue models, put together by Fred Wilson’s AVC community.

Just Do Something

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I’m burned out and need a few days with the computer off. Since it is Thanksgiving week here in the United States, I’m going to also take the opportunity to step away from the blog for a few days. With that, I wanted to leave you with something to think about this weekend. So I leave you with a story from Jonathan Moore about the almost drowning of his son. “You don’t have to do it right. You just have to do something.”

Great advice, whether saving your child or living life.

The Relative Cost of Stuff

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I’ve started looking at pricing things different then I used to. Once upon a time I’d look at total dollar cost and decide whether it was of value or not. Wow! A $200 pair of shoes! But now I look at an object in relation to the value per usage. Okay, those $200 pair of shoes cost more than a $100 pair of shoes, but I will use them for the next 200 times over the next five years. That’s only $1.00 per use. And since I bought them at REI, they will be covered for their entire life.

Technology is the same way. Now some of the technology products I buy are because we have to for work. I’m certain I would not have purchased an iPad mini except I needed to make sure powerOne was functional on it. But spending $800 on an iPad, given the number of hours I spend on it each year, pays off big time. I’m probably down around $0.05 per hour for that baby!

Freedman Movie Rating System – Part 2

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On Friday I talked about my personal approach to rating movies, a system that revolved around price, immediacy and convenience to watch. To refresh your memory:

  • 5 Stars: Full-Priced Movie at the Theater
  • 4 Stars: Matinee-Price Movie at the theater
  • 3 Stars: Netflix Discs/Rental
  • 2 Stars: Netflix Watch Instantly/Amazon Instant Video/Cable
  • 1 Star: Couldn’t pay me to watch the movie

Today I want to talk about the expectations game. We saw Mission: Impossible 2 this past weekend. My expectation was a 3-star movie. After watching it, I’d rate it 2-stars. Pretty mediocre movie all the way through. A week ago we saw a movie called The Lives of Others. Had no idea going in but we did wait for the Netflix disc so I would rate this one a 3-star movie. Once watched, it was easily a 5-star, one of the best movies I’ve seen in a long time, and I would have paid full price to see this in one of the local theaters.

While I can’t take full credit for this observation (Joe Posnanski wrote about this ages ago and helped solidify my vague thoughts on the concept) the real value of a movie is the difference between the expectation and reality. A 1-star expected movie that turns out to be a 2-star movie is actually a better value then the 3-star expected movie that turns out to be 2-stars, even though they were both rated 2-stars at the end.

So Mission: Impossible 2 was a disappointment. It rated out lower then I expected. The Lives Of Others was a huge success. Not only did it turn out to be a great movie but so far exceeded expectations that I talk about it every chance I get.

Freedman Movie Rating System – Part 1

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For most of my life I’ve escaped into three things: technology/code, movies, and books [1]. Movies were always the hardest in my mind simply because the value-to-price ratio is way out of whack. $10 buys two hours of entertainment where buying a book costs the same and the entertainment lasts for days. (Technology costs a lot more but I get years of enjoyment for it.)

When I was in college, a matinee was $3.25. A delayed rental at Blockbuster was $2. Given that we had nothing else to spend our money on, my future wife and I saw a lot of movies in the theater. Anything that looked remotely interesting we’d go see. But as we’ve gotten older and our time more sparse, as our money has been designated for other things, as matinee prices have tripled, and as we have accumulated large screen tvs and surround sound systems that rival the best theaters, going to the movies is now something we only do a couple of times a year.

With that in mind, years ago I came up with a movie rating system to figure out what’s appropriate theater faire and what isn’t. Without further ado, the Freedman Movie Rating System™:

  • 5 Stars: Full-Priced Movie at the Theater
  • 4 Stars: Matinee-Price Movie at the theater
  • 3 Stars: Netflix Discs/Rental
  • 2 Stars: Netflix Watch Instantly/Amazon Instant Video/Cable
  • 1 Star: Couldn’t pay me to watch the movie

The scale really comes down to three factors: price, immediacy and convenience. 4 and 5 really differentiate on price and immediacy. If there is a movie I really want to see right away, like when Lord of the Rings came out, I had to go to a theater. The only question was whether it was worth the full priced, evening ticket or the mid-priced, afternoon ticket. The next step down, 3 stars, is having to wait for the movie to come out on disc and then wait for it to show up in my queue or go to the rental place. The price is still a factor but the bigger issue is waiting for the movie to become available. 2 stars is the instant gratification. The price is good because it is included with the thing you are buying anyway (or used to be for Netflix) but the selection is mediocre and, in the case of cable, not within your control. Finally, 1 star is self explanatory. At some point, I hope that this at least becomes a four-tiered system, where we can combine 2 and 3. But for now they remain separate.

There’s an important second part to this post but that’s enough deep thought for now. We’ll pick this up again soon. 🙂

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[1] I used to escape into sports, too, but whether it’s age or the lack of cable or the frustrations with my favorite sports teams, I find my interest waining.