Stop Using the Cup of Coffee vs. $0.99 App Analogy(joshlehman.com)
joshlehman.com
Stop Using the Cup of Coffee vs. $0.99 App Analogy
http://www.joshlehman.com/thoughts/stop-using-the-cup-of-coffee-vs-0-99-cent-app-analogy/
109 comments
I know people who have worked in the big mobile gaming companies and I can tell you that you're not in their target revenue generating demographic. They have those gem bags for the 'whales' that will spend hundreds or even thousands on a game to offset all other lower or zero ROI users.
Power law strikes again.
Power law strikes again.
> Please, please just start charging for apps again. I specifically search for "pay once and never again" apps now.
To be honest - as an independent app store developer, these are REALLY hard to maintain just because you need to balance the need for ongoing development w/ servicing existing customers. Most app price points don't allow for this, since many customers are outraged that you would have the gall to even charge for an app (everything should be free, right?).
We've done well at doing both - and trying to add ONLY subscription services for features that are useful to users who use the app month over month.
To be honest - as an independent app store developer, these are REALLY hard to maintain just because you need to balance the need for ongoing development w/ servicing existing customers. Most app price points don't allow for this, since many customers are outraged that you would have the gall to even charge for an app (everything should be free, right?).
We've done well at doing both - and trying to add ONLY subscription services for features that are useful to users who use the app month over month.
I'm happy to to unlock features that was developed after I bought it.
On the other hand I really don’t want to pay USD10 a month for access to premium features that run on my phone.
Oh. And yes. I prefer as much as realistically possible to run on my phone.
And I'm fairly sure I have sometimes paid for apps I really like even if I'm not sure I'll use them - just to reward the developer and incentivice them to develop more good apps.
On the other hand I really don’t want to pay USD10 a month for access to premium features that run on my phone.
Oh. And yes. I prefer as much as realistically possible to run on my phone.
And I'm fairly sure I have sometimes paid for apps I really like even if I'm not sure I'll use them - just to reward the developer and incentivice them to develop more good apps.
> And I'm fairly sure I have sometimes paid for apps I really like even if I'm not sure I'll use them - just to reward the developer and incentivice them to develop more good apps.
I do this too. Subscriptions usually flip the bozo bit for me.
I do this too. Subscriptions usually flip the bozo bit for me.
> since many customers are outraged that you would have the gall to even charge for an app (everything should be free, right?)
Do you even want those kinds of customers in the first place? I've found that paid apps tend to have higher quality customers instead of the bottom of the barrel type of customer that flocks to Clash of Clans.
Do you even want those kinds of customers in the first place? I've found that paid apps tend to have higher quality customers instead of the bottom of the barrel type of customer that flocks to Clash of Clans.
Unfortunately the app store has turned a huge percentage of people into those customers. As addressed in the article, the app store itself contributes to the "uncertainty" of the entire app buying experience...
We're already talking about reducing the install base by over 95% (in my experience) by having no free option. It's hard to get too picky about who installs your app when you're at that level, IMO.
This greatly depends on what type of app it is (e.g. social vs. utility).
If Apple and Android had a separate search/install/purchase experience based around demoing games and unlocking the full version, I would buy so much more then I currently do.
Basically, apps that use a single in-app purchase to unlock the full version should not be lumped into the micro-transaction crap pile and should be clearly marked as such.
Windows Phone had tried that, with some games marketplace had two links, Buy and Try Demo. So was time or feature limited and you can purchase normally from an in game link, to unlock the full version.
Android has (with the Play Store):
http://www.androidauthority.com/how-to-get-refund-apps-googl...
http://www.androidauthority.com/how-to-get-refund-apps-googl...
It seems to have changed? Apparently, getting a refund is no longer guaranteed [1].
Also, compare with Kindle, where you can download a sample of any book you like, and it just sits until you get around to reading it. Once you finish the sample, you can decide whether to buy it. I think that model is closer to free with in-app purchases than anything else.
[1] https://support.google.com/googleplay/answer/2479637?hl=en
Also, compare with Kindle, where you can download a sample of any book you like, and it just sits until you get around to reading it. Once you finish the sample, you can decide whether to buy it. I think that model is closer to free with in-app purchases than anything else.
[1] https://support.google.com/googleplay/answer/2479637?hl=en
Wow! It did change! When? Went from 2 days to 15 minutes to none.
Same with App Store. https://support.apple.com/en-us/HT204084
> If I see something that is both "free" and "in-app purchases", it already greatly reduces the chance I'll even bother to download
If a free app starts out with limited functionality for trialing, with a (one-time) in-app-purchase to unlock the full features, is that a good thing or a bad thing?
Follow-up: if it's a good thing, how should the app developer make it clear that it's not crapware? (asking for a friend)
If a free app starts out with limited functionality for trialing, with a (one-time) in-app-purchase to unlock the full features, is that a good thing or a bad thing?
Follow-up: if it's a good thing, how should the app developer make it clear that it's not crapware? (asking for a friend)
Pay to get rid of the ads and get some more functionality seems fine to me.
But it goes the other way too. I bought Bad Piggies some years ago. I play it on vacations. And this vacation I started it and just couldn't figure out how to start a level. There were several buttons but they all seemed to start fullscreen unskippable ads for other games instead of the game. I tried several times and gave up. I'm not sure there still is a game in there.
I think behavior like this should not be allowed by Apple.
But it goes the other way too. I bought Bad Piggies some years ago. I play it on vacations. And this vacation I started it and just couldn't figure out how to start a level. There were several buttons but they all seemed to start fullscreen unskippable ads for other games instead of the game. I tried several times and gave up. I'm not sure there still is a game in there.
I think behavior like this should not be allowed by Apple.
I bought a game a few years ago (Batman or Spiderman or something) for an $8 or $10 one time purchase. Then the developer (who I think I remember, but won't mention because I'm not positive) decided it would be a good idea to move to an IAP model. Well, after updating the game one day, I realized that I no longer had the full game that I paid for, and that I would have to pay more via IAP if I wanted to continue playing. That was the day that soured me on IAP forever, and I'm another one that will go very far out of my way to avoid them (even inconveniencing myself solely out of spite).
I have to ask how that's the fault of the IAPs? Sounds like the developer screwed you out of something you paid for with an update, which could happen with or without the IAP model.
The closest thing I can think of is what Apple did to Final Cut Pro users, or what Sony did to Other OS users on the PS3.
The closest thing I can think of is what Apple did to Final Cut Pro users, or what Sony did to Other OS users on the PS3.
That's my personal favourite for apps, but it's impossible to tell from a glance whether the "in-app purchases" label means you just buy it once (like Super Mario Run) or it'll be a constant push to spend more and more (nearly every other app).
That's a tough one, especially for small developers.
That's a tough one, especially for small developers.
This is the true problem. Apple is pushing in-app subscriptions on developers now...but as a developer you have no way to inform your customer of this. We have a SaaS business, and still get 1 out of 10 reviews complaining that there is a subscription. We state that it requires a sub in the first line of the app subscription, but that is not enough.
Look whether "top in app purchase" is "unlock full game" or "buy gameXYZ coins" etc
Is this iOS only, or maybe I'm very bad at searching? I don't see anywhere in the Play Store to view the top in-app purchases for an app.
I have hesitated a couple of times at that language, when I'm considering an "open source" app. To find that it's really describing the ability to make a donation to the developers.
I wish there was distinct language for this. But at least I've learned to look closer, before making up my mind.
P.S. I just checked a couple of apps I was thinking of, and I do not see -- or no longer see -- that language on their app page. One -- Open Camera -- does have the ability to make such a donation by purchasing a separate "donation app".
I don't know whether the language has changed, or whether I'm mis-remembering my past experience. About the time Android and smart phones came along, I lost the will to keep my attention focused on and keep up with every last detail.
Anyway, I've no problem with making a donation for an app I value. I tend to favor such apps, because I just don't have a lot of trust in closed-source apps. Not that all app developers are bad or evil, but 1) Mistakes get made, particularly around security; 2) Apps get sold, and the new parties are an unknown, then already on my device; 3) Ads -- sooner or later, in distraction and/or malicious behavior, they go bad.
I also pay for some commercial, closed-source apps. But I have to have a fair amount of trust in the outfit behind them.
Anyway... Play platform language is oriented around "sales" and not "contributions".
I wish there was distinct language for this. But at least I've learned to look closer, before making up my mind.
P.S. I just checked a couple of apps I was thinking of, and I do not see -- or no longer see -- that language on their app page. One -- Open Camera -- does have the ability to make such a donation by purchasing a separate "donation app".
I don't know whether the language has changed, or whether I'm mis-remembering my past experience. About the time Android and smart phones came along, I lost the will to keep my attention focused on and keep up with every last detail.
Anyway, I've no problem with making a donation for an app I value. I tend to favor such apps, because I just don't have a lot of trust in closed-source apps. Not that all app developers are bad or evil, but 1) Mistakes get made, particularly around security; 2) Apps get sold, and the new parties are an unknown, then already on my device; 3) Ads -- sooner or later, in distraction and/or malicious behavior, they go bad.
I also pay for some commercial, closed-source apps. But I have to have a fair amount of trust in the outfit behind them.
Anyway... Play platform language is oriented around "sales" and not "contributions".
>One -- Open Camera -- does have the ability to make such a donation by purchasing a separate "donation app".
Android has the concept of 'unlock keys', which were basically IAPs for full unlocks. I'm pretty sure you can still make them, as a couple apps I use still have legacy keys in addition to IAPs (added later).
The guarantee that you're only paying once is a nice thing, but these days I think users understand IAPs these days and prefer what they know.
Android has the concept of 'unlock keys', which were basically IAPs for full unlocks. I'm pretty sure you can still make them, as a couple apps I use still have legacy keys in addition to IAPs (added later).
The guarantee that you're only paying once is a nice thing, but these days I think users understand IAPs these days and prefer what they know.
eh it's usually clear by looking if the iap is a feature or a consumable, but there's no search parameter for that, so you're stuck by looking trough each variant of them.
oh, and there are those app that started paid for and switched to free+ads, leaving users who bought it prisoner of their sucky ads experience.
oh, and there are those app that started paid for and switched to free+ads, leaving users who bought it prisoner of their sucky ads experience.
Get yourself a Nintendo 3DS and you'll be a lot happier. I quit "gaming" on the iPhone years ago because of all this microtransaction garbage.
Absolutely. I've gotten in a few threads of apple fans insisting that $10-30 for a game is ridiculous because they once played angry birds for over an hour. Mobile games are almost always terrible just for three simple fact that touch screens really don't work for a lot of kinda of games. The DS line is cheaper, more durable and longer lived than your average mobile device anyway.
Though, Nintendo has been experimenting with IAP and F2P stuff, which I just try to avoid.
Though, Nintendo has been experimenting with IAP and F2P stuff, which I just try to avoid.
I prefer the original DS or Lite over the 3DS - there's too much internet garbage on my gaming device. Plus, region-locking. So, no.
Completely agree. I'll often take a look at the "top in-app purchases" as well. "$9.99", ok, but if I see a "$129.99" for a "big crate of gems"...
I just got to question how the developers felt that it was morally acceptable to create a toxic enough app experience that drives users to use in app purchases through deceptive tactics during the first few minutes of play to go and drop +$100 on virtual gems.
I just got to question how the developers felt that it was morally acceptable to create a toxic enough app experience that drives users to use in app purchases through deceptive tactics during the first few minutes of play to go and drop +$100 on virtual gems.
The $129.99 is not meant to be purchased. It's mostly a psychological artifact to make other in-app products seem more affordable.
Not necessarily. Apps like this tend to make a huge portion of their revenue from "whales" who spend crazy amounts of money: http://www.adweek.com/digital/infographic-whales-account-for...
I'm sure the anchoring effect helps too, of course.
I'm sure the anchoring effect helps too, of course.
I don't know, that's really not that much depending on the quality and quantity of product you receive.
Do you have actual stats on how many people purchase this sort of thing, or are you just guessing?
Do you have actual stats on how many people purchase this sort of thing, or are you just guessing?
The number of people that do is quite small as a percentage of users who do it, but quite significant as a percentage of revenue for the company selling those packages. Free-to-play is just like the alcohol and gambling industries, a large fraction of revenue comes from a small fraction of players.
A mandate from Apple to provide and obviously display an "unlock everything forever" option in-app purchase would go a long way. The whale hunters would have absurdly large numbers for this and make it obvious that the game is a scam. Every other game could be unlocked for, say, the price of a good console or steam game.
> Please, please just start charging for apps again. I specifically search for "pay once and never again" apps now.
I mostly agree, with the exception of a FEW good game publishers that have an ad supported version where ads can be disabled via a one time payment. Best of both worlds.
Another example I've seen is extended demos that have an unlock for the full game. Solitairica does this well, the free game by itself is a good three or so hours, and a one time payment gets another 20+ hours of gameplay, and more DLC is available after that. Unfortunately the app store doesn't have a way to search for "No repeat IAP for in game currency", which is what I really want to avoid.
I mostly agree, with the exception of a FEW good game publishers that have an ad supported version where ads can be disabled via a one time payment. Best of both worlds.
Another example I've seen is extended demos that have an unlock for the full game. Solitairica does this well, the free game by itself is a good three or so hours, and a one time payment gets another 20+ hours of gameplay, and more DLC is available after that. Unfortunately the app store doesn't have a way to search for "No repeat IAP for in game currency", which is what I really want to avoid.
With apps that are utilities, it's fine to charge once. Like how one would charge once for their hammer in store.
The "in-app purchase" thing is good when someone designs their "app" like a fucking cigarette hit (or a cup of coffee). They have to make the user desire that hit every day. Games do that because they are addictive.
The "in-app purchase" thing is good when someone designs their "app" like a fucking cigarette hit (or a cup of coffee). They have to make the user desire that hit every day. Games do that because they are addictive.
The thing is, I used to have no problem with free apps with in-app purchases, because that used to indicate that you just got a free sample (e.g. a few levels of a game) and the option to purchase the full game. I have no problem with in-app purchases that aren't depletable, like "gems," but I don't see that model any more either.
Apple's needed for some time to create a "demo" category and/or feature for apps, with upgrades to those distinct from consumable or add-on purchases. Mixing all that together is part (though only part) of why I avoid browsing the app store.
The numbers don't agree with your claims
The numbers don't oppose his claims either.
The numbers support a claim that in-app purchases make more money, but this should not be mistaken for proof that in-app purchases provide a better user experience.
The numbers support a claim that in-app purchases make more money, but this should not be mistaken for proof that in-app purchases provide a better user experience.
To me it's a non-starter to ask app developers pouring time and effort into apps to take money off the table because of the opinion of a minority. So since the numbers show almost every top grossing app on multiple aggregators is free, it's not really an actionable request from my POV as a developer.
Do you have any evidence that it's the opinion of a minority?
People put down money for in-app purchases because they encourage addictive behaviors. I don't think it's a non-starter to ask people to give up money to behave with conscience. There are many areas where we ask and even mandate businesses to behave ethically.
People put down money for in-app purchases because they encourage addictive behaviors. I don't think it's a non-starter to ask people to give up money to behave with conscience. There are many areas where we ask and even mandate businesses to behave ethically.
I'm a firm believer of people voting with their wallets. And their wallets point to an aversion to upfront payment.
And IAP != encouraging addictive behavior.
You're conflating mobile games that use IAP and very specific patterns with IAP.
IAP are also used for simple things like providing a "paid ad-free version" within a single app, or to unlock additional functionality. The trend of people having an aversion to paying up front applies to all mobile apps, not just games.
And IAP != encouraging addictive behavior.
You're conflating mobile games that use IAP and very specific patterns with IAP.
IAP are also used for simple things like providing a "paid ad-free version" within a single app, or to unlock additional functionality. The trend of people having an aversion to paying up front applies to all mobile apps, not just games.
If income indicates ethical behavior, why are murderous drug lords so rich?
People vote for all sorts of awful things with their money. It's ridiculous to assume that means the people they bout for are behaving ethically.
People vote for all sorts of awful things with their money. It's ridiculous to assume that means the people they bout for are behaving ethically.
What numbers, claims? OP was speaking of personal experience.
> Please, please just start charging for apps again
The top grossing apps are all free no matter where you look, if charging for apps was profitable we'd expect to see at least some paid apps right?:
https://thinkgaming.com/app-sales-data/
https://play.google.com/store/apps/collection/topgrossing? hl=en
It's well known in app development that not having a free app will seriously hamper your traction. The only apps I've seen get away with it are technical utility apps, and remakes/releases of established games for non-mobile (GTA, FF, RCT, etc.)
The top grossing apps are all free no matter where you look, if charging for apps was profitable we'd expect to see at least some paid apps right?:
https://thinkgaming.com/app-sales-data/
https://play.google.com/store/apps/collection/topgrossing? hl=en
It's well known in app development that not having a free app will seriously hamper your traction. The only apps I've seen get away with it are technical utility apps, and remakes/releases of established games for non-mobile (GTA, FF, RCT, etc.)
I'm sure there's a market for both.
Completely agree. It's often the first filter when I'm looking for apps.
I prefer to apply this analogy to the situation with how users expect updates into perpetuity in exchange for their 99 cents. Developers that try to fund continuous updates through a small annual subscription fee (like Dark Sky on Android, for example) get pilloried for it.
You wouldn't pay $4 for a coffee at Starbucks, then come back to the store six months later and say "I paid $4 for this, refill it." But you expect that app you paid a buck for in 2008 to still work in 2017 across 10+ new OS revisions (and one or two major UI paradigm shifts), and the justification for that is "I paid for it once."
When you went out and bought boxed software it was kind of an expectation that it was going to work for a reasonable time period afterward. But if you want an update or support for a later OS version that didn't exist at the time of purchase, you're going to pay for it.
You wouldn't pay $4 for a coffee at Starbucks, then come back to the store six months later and say "I paid $4 for this, refill it." But you expect that app you paid a buck for in 2008 to still work in 2017 across 10+ new OS revisions (and one or two major UI paradigm shifts), and the justification for that is "I paid for it once."
When you went out and bought boxed software it was kind of an expectation that it was going to work for a reasonable time period afterward. But if you want an update or support for a later OS version that didn't exist at the time of purchase, you're going to pay for it.
We're really torturing the metaphor with app updates as coffee refills, buuuuuut....
Many of us are in the software business. So we know how hard the stuff can be. But the customer doesn't, and shouldn't care. I think it's reasonable for the customer to expect updates forever. Particularly because so often, we put out a product that has bugs and problems in it. The customer is sometimes already being fairly accepting being willing to pay for a product that has problems that are yet to be fixed.
The app author also has the ability to release a new app if the features warrant. So no one is forcing the publisher to give new features for free.
Many of us are in the software business. So we know how hard the stuff can be. But the customer doesn't, and shouldn't care. I think it's reasonable for the customer to expect updates forever. Particularly because so often, we put out a product that has bugs and problems in it. The customer is sometimes already being fairly accepting being willing to pay for a product that has problems that are yet to be fixed.
The app author also has the ability to release a new app if the features warrant. So no one is forcing the publisher to give new features for free.
>The app author also has the ability to release a new app if the features warrant.
That's easier said than done. You can't really do this without losing your customer base, links to your app in the store, sign-in tokens, etc, and you have to have some mechanism for migrating data out of one app sandbox to the other.
Additionally, if you want to be fair and offer an upgrade price, the app stores don't allow this directly.
Tweetbot did something clever; they wanted to charge $10 for new users but $5 for upgrades. They put the "old" version and the "new" version in a package deal bundle on the iOS App Store, and priced the bundle at $10. If you had the "old" version already, you got get a discounted upgrade by buying the bundle -- since you already owned one app in the bundle, you got a credit for that towards the full price.
The app stores could fix this problem and allow publishers to set upgrade pricing, but they don't.
That's easier said than done. You can't really do this without losing your customer base, links to your app in the store, sign-in tokens, etc, and you have to have some mechanism for migrating data out of one app sandbox to the other.
Additionally, if you want to be fair and offer an upgrade price, the app stores don't allow this directly.
Tweetbot did something clever; they wanted to charge $10 for new users but $5 for upgrades. They put the "old" version and the "new" version in a package deal bundle on the iOS App Store, and priced the bundle at $10. If you had the "old" version already, you got get a discounted upgrade by buying the bundle -- since you already owned one app in the bundle, you got a credit for that towards the full price.
The app stores could fix this problem and allow publishers to set upgrade pricing, but they don't.
So true. I acquired the rights to older desktop software a few years ago that had been in use for about 10 yrs by a lot of users. The original creators only charged $50 one time. Some users thought it was $50 per computer so they would pay several times. The owner told me the support costs are too unwieldy and he wanted out.
So convincing the prior users that they should pay $10-40/mo was a challenge. For many that objected, I told them the truth - that the prior creators could no longer sustain it at that price and it was actually severely underpriced. I told them they are free to use the desktop version as long as they want but that we can't support it and we are doing a membership model which will be supported - for devices now and in the future and we'll be adding new features as we had been.
That helped to convert most.
I agree with you that the expectations aren't inline with what it takes because a lot of software is subsidized by ads and we had a long history of desktop apps working for many years. Many users will understand if you position your response properly, assuming you don't have a better, cheaper competitor! :)
Our audience is older and we still get contended on price because people will think of the value they get for what they pay for Netflix or Office. They usually understand when you say that specialty software cannot exist unless it's priced higher and that we aren't a megacorp like Microsoft.
So convincing the prior users that they should pay $10-40/mo was a challenge. For many that objected, I told them the truth - that the prior creators could no longer sustain it at that price and it was actually severely underpriced. I told them they are free to use the desktop version as long as they want but that we can't support it and we are doing a membership model which will be supported - for devices now and in the future and we'll be adding new features as we had been.
That helped to convert most.
I agree with you that the expectations aren't inline with what it takes because a lot of software is subsidized by ads and we had a long history of desktop apps working for many years. Many users will understand if you position your response properly, assuming you don't have a better, cheaper competitor! :)
Our audience is older and we still get contended on price because people will think of the value they get for what they pay for Netflix or Office. They usually understand when you say that specialty software cannot exist unless it's priced higher and that we aren't a megacorp like Microsoft.
So, if you expect your users to use your product for multiple years, charge appropriately. There's a difference between an update and an upgrade. A further difference still from a subscription. I think most people are happy paying a single price for a single thing and expecting to not pay for it again - but happy to pay for the next version, that offers something more than their version.
So why not do licensing based on OS revision?
i.e. "You bought Space Trader for Android 6. You've since upgraded to Android 8. Cough up another $.99 for the Android 8 version, or continue enjoying what you paid for on another device running Android 6."
It seems fair to me, but I could see this becoming a lot of clutter (rebuying v4-v5-v6-v7-v8 and having as many apps in your library).
i.e. "You bought Space Trader for Android 6. You've since upgraded to Android 8. Cough up another $.99 for the Android 8 version, or continue enjoying what you paid for on another device running Android 6."
It seems fair to me, but I could see this becoming a lot of clutter (rebuying v4-v5-v6-v7-v8 and having as many apps in your library).
This has a really big downside, which is that every OS upgrade now has a cost associated with it for the user. Would greatly slow adoption of new iOS & Android versions, potentially harming security.
True, I considered that but smartphones aren't known for longevity.
Sooner or later end of service life (or just the "ooh shiny" factor) will force an upgrade on the user.
Sooner or later end of service life (or just the "ooh shiny" factor) will force an upgrade on the user.
It's not the developer's responsibility, but yes an app from 2008 should never stop working.
In fact, this is SO true, that I think if an app were to charge $2/mo rather than 99c once, I'd be more likely to buy it. As a consumer, and especially as a tech-aware consumer, I know that something costing 99c is a cheap throwaway piece of plastic from a gumball machine. Anything worth having needs recurring updates, server-side maintenance, etc. 99c once I view as "free", which I view as "junk", which I view as "something I don't need". Rough analogies: "anything that's free, you're not the consumer; you're the product", and "here, you throw this away" -Jim Gaffigan (I think) on flyers and free samples.
Users don't expect new features to be added forever. But they do expect that the program will work forever, even if the OS or devices change.
If it helps, then take that $0.99 and earn interest on it forever, that interest should be enough to pay for updates.
If it helps, then take that $0.99 and earn interest on it forever, that interest should be enough to pay for updates.
The article makes some pretty compelling points, but I think it's underestimating the irrationality in human behavior. It's well known that people's purchasing habits are deeply irrational on many levels - one of which is the idea of anchoring. We've had the idea of $4 coffee prices anchored in our heads, and so, don't think twice about it. Conversely, we've also had the idea of free-apps anchored in our heads, and so, feel deeply averse to spending $1 on it, even when a rational person would conclude that the app's lifetime value (over free alternatives) exceeds 25% of the value provided by a single cup of coffee.
There are certainly many rational reasons for why someone wouldn't want to pay a buck for an app, but it's worth pointing out that a significant number of people are irrationally averse as well.
http://www.investopedia.com/university/behavioral_finance/be...
There are certainly many rational reasons for why someone wouldn't want to pay a buck for an app, but it's worth pointing out that a significant number of people are irrationally averse as well.
http://www.investopedia.com/university/behavioral_finance/be...
Yeah, I can't tell you how many irrational hours I've gone out of my way to avoid toll roads or paid parking, things that "should be" free, even now when I certainly charge many times the rate that any parking garage does.
I think it is a bit unfair to call anchoring 'irrational'. It is a heuristic for figuring out how much I should pay for something, and it works pretty well for a lot of situations. Sure, it can be exploited by people who know what they are doing, and it can lead us to pay too much sometimes or refuse to pay a fair amount other times, but on the whole it works pretty well.
The app world has really been grinding my gears lately. The move to subscription services is really getting to me. Especially on iOS. I've dropped a lot of money on writing apps - I'm looking at you, Ulysses - to move to a subscription - and eventually lock me in, or lock me out. "At a cost of a coffee a month," you say.
I think the article misses the point.
If we transfer the app store experience over to the real world who would pay $4 for a cup of coffee at your shop if there were coffee stands on the sidewalk literally every 100 meters offering excellent free coffee for you to grab with some ads printed on the cup.
That's about the sort of competition that mobile app developers have to put up with. Starbucks however didn't have that competition when they started out, that's why they could become so big in the first place.
If we transfer the app store experience over to the real world who would pay $4 for a cup of coffee at your shop if there were coffee stands on the sidewalk literally every 100 meters offering excellent free coffee for you to grab with some ads printed on the cup.
That's about the sort of competition that mobile app developers have to put up with. Starbucks however didn't have that competition when they started out, that's why they could become so big in the first place.
Free coffee with ads on cups? Could it work as a model?
The article actually covers this. Sounds like you missed the point.
Did ... how could ... I think I need to lie down.
I was expecting this to go in a different direction when I read the headline, which is this: a decision to buy and experience an app does not have a guaranteed ending. The app could easily command more of my attention than I want it to, which--not to get all self-important here--is valued at way more than $0.99. I personally don't buy apps because I feel attention-saturated by the ones I already have. I do buy cups of coffee regularly, though, because I know where they start and end.
I was expecting it to go in a different direction also. But mostly based on the price of coffee. I don't know anyone in my professional/social circle that drinks coffee that costs less than a dollar. I think its time to start equivocating $5.00 purchases with a cup of coffee.
And even then, saying "this is the cost of a cup of coffee" is basically asking me to give up a cup of coffee to pay for their app. If you break out the whole logic argument, it's saying "I don't want to pay for this app", at which point the value proposition is "you know that money you were about to spend on coffee? Spend it here instead". I know they want to say "look how cheap it is", but what I hear as a budget-oriented person is "if you don't want to spend the money for it, just stop buying something else". My aversion to buying an app isn't how expensive it is, but rather how much I'm going to use it. Stop insinuating that I'm too poor to buy your product.
And like you mentioned, coffee is actually pretty expensive. Even at $1, if you drink a cup a day that's $30/mo which is more than the cost of GitHub Enterprise. If it's $5 for a cup and you drink one per day, that's $150/mo which could get me an absolutely massive Digital Ocean droplet. We pay an assload for coffee. Bad comparison.
And not to mention coffee is addictive; many people drink it because they feel like they have to, not because they necessarily want to.
Comparing your app to coffee is just an awful comparison all around.
And like you mentioned, coffee is actually pretty expensive. Even at $1, if you drink a cup a day that's $30/mo which is more than the cost of GitHub Enterprise. If it's $5 for a cup and you drink one per day, that's $150/mo which could get me an absolutely massive Digital Ocean droplet. We pay an assload for coffee. Bad comparison.
And not to mention coffee is addictive; many people drink it because they feel like they have to, not because they necessarily want to.
Comparing your app to coffee is just an awful comparison all around.
I believe they address this in the first major heading, where they say:
> Fact: Starbucks Coffee is a Trustable Experience
> Fact: Starbucks Coffee is a Trustable Experience
Fair enough. By "different direction" I mean I was surprised by the upshot of the article: just build your apps to be more like the Starbucks model! Not, you know, that many apps are deliberately designed to capture and keep our attention, and it can be hard to discern where an app stands before trying it.
I think this essay touches on something that is obvious yet feels frequently overlooked: time is valuable/money. And apps, unlike coffee, suck up your time.
It's not that 99 cents is expensive. It's that if 1 hour of my time is worth $50, and a 99 cent app wastes 1 hour of time, I'm out $50.99. The low price tag is itself a disincentive because experience has taught me that it's very rare to find something indisputably worth $9.99 that has been valued (by its own creator!) for 99 cents.
And as a technical issue, if you were to pick up apps because they were free or cheap, you'd subject yourself to cognitive overload, even if you never even opened those apps and wasted time on them. Nothing is ever free, and even if Starbucks/Peet's is a bit overpriced, at least I know what I'm committed to (barring an unexpected discovery that coffee is much more harmful than previously thought).
It's not that 99 cents is expensive. It's that if 1 hour of my time is worth $50, and a 99 cent app wastes 1 hour of time, I'm out $50.99. The low price tag is itself a disincentive because experience has taught me that it's very rare to find something indisputably worth $9.99 that has been valued (by its own creator!) for 99 cents.
And as a technical issue, if you were to pick up apps because they were free or cheap, you'd subject yourself to cognitive overload, even if you never even opened those apps and wasted time on them. Nothing is ever free, and even if Starbucks/Peet's is a bit overpriced, at least I know what I'm committed to (barring an unexpected discovery that coffee is much more harmful than previously thought).
I have fond memories of freeware and postcardware from a few decades back. In contrast, I'm rarely impressed with either free or paid apps.
The most solid apps I use just promote or expand another primary product. They're made as an adjunct by a company with a different revenue stream.
I don't know if it's walled gardens or the ease of payment that drives the shift. I'm glad people can get paid for good work, but I worry we lost something.
On the other hand, maybe it's just nostalgia taking. I wish I could find all the old astronomy simulators and games I found on BBSs, see if any of them actually hold up. Maybe software overall has gotten so much better I just raised my standards.
The most solid apps I use just promote or expand another primary product. They're made as an adjunct by a company with a different revenue stream.
I don't know if it's walled gardens or the ease of payment that drives the shift. I'm glad people can get paid for good work, but I worry we lost something.
On the other hand, maybe it's just nostalgia taking. I wish I could find all the old astronomy simulators and games I found on BBSs, see if any of them actually hold up. Maybe software overall has gotten so much better I just raised my standards.
My coffee spending is naturally capped at a level that is imperceptible to my budget. That's why I feel comfortable blowing the $4 on a cup - without any conscious decision making.
That's not the case with apps. I could easily spend a thousand bucks on them in a single day, so I am very careful with every single $.99.
That's not the case with apps. I could easily spend a thousand bucks on them in a single day, so I am very careful with every single $.99.
I feel the opposite is true for me. For meals and soft drinks, my appetite seems to be infinite so I could really bankrupt myself if I just let it run free. However, there aren't many apps that seem useful to me and just let me buy them. It's subscriptions all the way down.
I've bought Wolfram Alpha for about a buck, I've blown 30 bucks on a bachata moves app, but god forbid if anyone offered a run tracking app without a subscription.
I've bought Wolfram Alpha for about a buck, I've blown 30 bucks on a bachata moves app, but god forbid if anyone offered a run tracking app without a subscription.
This is a survivorship bias article.
- "People are building fantastic free apps. They are finding new and creative ways to make money off these apps" People drop $4 on coffee at new coffee places/restaurants all the time, so that whole I trust this experience thing is really not valid when you think about it a little further than your morning Starbucks.
- "Fact: Starbucks Has No Free Alternative" - This can be interpreted to say that maybe more apps should be $0.99, so that users get used to paying for the apps. I dont think anyone would question the $0.99 price for apps if thats how it was from the beginning. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps". This is because the prevalence of free apps has trained developers that people wont pay for apps. So new/creative ways of making money is most likely a result of there not being a way to make money by selling the app itself. Another way to look at it is, because you cant make money just selling the app, the only people who survive are people who can find other ways of making money. If the expectations was for apps to be paid, maybe more people would make apps and we would see a whole different world of apps.
I realize that its hard to change consumer habits, so free is likely to be the dominant distribution model. But its important to distinguish that the current reality might not be the best alternative.
- "People are building fantastic free apps. They are finding new and creative ways to make money off these apps" People drop $4 on coffee at new coffee places/restaurants all the time, so that whole I trust this experience thing is really not valid when you think about it a little further than your morning Starbucks.
- "Fact: Starbucks Has No Free Alternative" - This can be interpreted to say that maybe more apps should be $0.99, so that users get used to paying for the apps. I dont think anyone would question the $0.99 price for apps if thats how it was from the beginning. - "People are building fantastic free apps. They are finding new and creative ways to make money off these apps". This is because the prevalence of free apps has trained developers that people wont pay for apps. So new/creative ways of making money is most likely a result of there not being a way to make money by selling the app itself. Another way to look at it is, because you cant make money just selling the app, the only people who survive are people who can find other ways of making money. If the expectations was for apps to be paid, maybe more people would make apps and we would see a whole different world of apps.
I realize that its hard to change consumer habits, so free is likely to be the dominant distribution model. But its important to distinguish that the current reality might not be the best alternative.
They're not really correct that Starbucks has no free alternative. However, this depends on several understandings. The first for me is a sort of A=A mindset, that coffee=coffee regardless of all else. Assuming for the moment ground coffee rather than whole-bean or instant, I can get over a month's supply for about 5 bucks. It's not "free", but it's $60 a year for a pot of coffee per day. On top of that, if I don't want to make my own coffee, a $1 coffee mug allows me to get refills at 7-11. And I can get coffee at the food bank reliably.
While you might argue that I'm discounting the cost of the water and electricity, I'd argue that instead we're talking about the same issue as the cost of the phone. I have a $20 phone which works well for me. But any purchase in the Play Store is getting judged against that $20 value; if the phone were worth more there'd be no hope of an app significantly increasing the value of the phone.
There's no app I really need that's not free (or OEM like phone, text, memo, camera, ebook reader). The few that I do want or which I might need? I can get that function working in a browser.
While you might argue that I'm discounting the cost of the water and electricity, I'd argue that instead we're talking about the same issue as the cost of the phone. I have a $20 phone which works well for me. But any purchase in the Play Store is getting judged against that $20 value; if the phone were worth more there'd be no hope of an app significantly increasing the value of the phone.
There's no app I really need that's not free (or OEM like phone, text, memo, camera, ebook reader). The few that I do want or which I might need? I can get that function working in a browser.
This is why free to play, apps that offer premium modes, or apps that have social conversions are good models for a digital store. When there is almost no barrier to entry users have good reason to doubt the value of what they are downloading. Hence they want to try it first or hear strongly from a trusted source that it is valuable.
Well, considering "Save The <$INSERT-CAUSE-OF-THE-DAY>" charities have been peddling "For the cost of a cup of coffee a day" scams for years rather successfully I would be shocked if it did not work. Of course it may require TV ads.
The cost of goods on a cup of Starbucks coffee is substantial (servers, beans, equipment, rent, utilities, cup, creamer)
The cost of goods on your $1 app is close to, and perceived to be, zero.
The cost of goods on your $1 app is close to, and perceived to be, zero.
Why is customer acquisition cost (which can be many $s) not considered part of the cost of the app if it's considered part of the cost of Starbucks (through rent)? Why is Starbucks server a cost, but your app's developer isn't? Why is Starbucks equipment a cost, but app's infrastructure isn't?
You are comparing R&D with Cost of Goods - they are different things.
Cost of goods refers to the production cost of an individual item. COG for app store is zero. You don't even pay for hosting your app on the app store.
Software developers are R&D, not cost of goods.
There is R&D associated with Starbucks coffee as well (researching beans, refining the blends, etc), but nobody really factors that into its perceived value.
Cost of goods refers to the production cost of an individual item. COG for app store is zero. You don't even pay for hosting your app on the app store.
Software developers are R&D, not cost of goods.
There is R&D associated with Starbucks coffee as well (researching beans, refining the blends, etc), but nobody really factors that into its perceived value.
- I don't see why customers would be so specific that they only want to look at cost of goods and not other costs. Most products and services people buy are based on their value for them, not based on their cost of goods.
- If you include equipment, rent, and utilities in your cost calculations, then you have to include software developers and servers that are powering the app. I am not talking about apps that you build, publish and forget. Most apps have backend and engineers maintaining and supporting them.
- You ignored my point about the customer acquisition cost which is likely to be the biggest cost for most apps.
- If you include equipment, rent, and utilities in your cost calculations, then you have to include software developers and servers that are powering the app. I am not talking about apps that you build, publish and forget. Most apps have backend and engineers maintaining and supporting them.
- You ignored my point about the customer acquisition cost which is likely to be the biggest cost for most apps.
I think you could argue up front and ongoing costs for either scenario.
The duplication of an app for each install is technically very low cost (although you could say that the app store taking 30% is a cost there), that doesn't mean there weren't large up front costs and ongoing ones as well.
What about maintenance, support, infrastructure like servers/services/bandwidth. For anything of a decent size you probably have to do these things, which means you probably need staff, which means you probably need an office, benefits, insurance, all the usual business costs. That's not even bringing up the constant updates, new features, and supporting the ever changing platform or environment it runs on, which is all completely expected by users.
Apps are as much of a regular business as anything else, not some magic special case.
The duplication of an app for each install is technically very low cost (although you could say that the app store taking 30% is a cost there), that doesn't mean there weren't large up front costs and ongoing ones as well.
What about maintenance, support, infrastructure like servers/services/bandwidth. For anything of a decent size you probably have to do these things, which means you probably need staff, which means you probably need an office, benefits, insurance, all the usual business costs. That's not even bringing up the constant updates, new features, and supporting the ever changing platform or environment it runs on, which is all completely expected by users.
Apps are as much of a regular business as anything else, not some magic special case.
The best model would be to have an app that slowly unlocks more functionality based off off TOTAL revenue, so the whales effectively unlock content for the non-spenders.
> Is There Hope for the Paid App?
Sure there is. Just do what Starbucks does:
• Build an app experience that’s unique and doesn’t feel “easily replicated”
• Provide something the user sees as valuable to their daily life
• Package it such that it shows off its craftsmanship Find creative ways to profit off of a “free” version (Starbucks doesn’t do this…. yet)
• Quit complaining about money wasted on cups of coffee
Don't forget the part about spending millions on advertising, so that people know what your product is.
Sure there is. Just do what Starbucks does:
• Build an app experience that’s unique and doesn’t feel “easily replicated”
• Provide something the user sees as valuable to their daily life
• Package it such that it shows off its craftsmanship Find creative ways to profit off of a “free” version (Starbucks doesn’t do this…. yet)
• Quit complaining about money wasted on cups of coffee
Don't forget the part about spending millions on advertising, so that people know what your product is.
People who make this comparison wildly underestimate how much I like coffee. It's a lot more than your dumb app, I assure you. In fact, I'll go further. There isn't an app in existence that I'd trade for coffee. Not Facebook or Instagram or anything else on my home screen. Coffee is better than all of them. This comparison could only be made by somebody who doesn't drink coffee.
Sure, but it's not coffee, it's one cup of coffee - and you can immediately get another cup for yourself.
That said, they still often lose out in that comparison.
That said, they still often lose out in that comparison.
Come to think of it ... of the apps I use regularly, none of them is actually essential to my life.
Not like coffee.
Not like coffee.
I agree with the author. Although the author didn't mention apps being "digital" as a reason for no sales, others have done so and I commented on that not being a convincing roadblock: https://news.ycombinator.com/item?id=13634892
I don't think it's supposed to be an analogy, the point is just to illustrate that 1 dollar is a very small amount of money and you shouldn't hesitate to spend it on an app.
Let's also not forget that an app is a digital experience and coffee is a physical one.
Plus even if the facts the author wrote were not true, it's just overused at this point anyway.
Plus even if the facts the author wrote were not true, it's just overused at this point anyway.
> Last week I bought a game for 99 cents and it was terrible. I played it once, for 15 seconds. I could be shoving $1 straight down the toilet again for all I know. Your app, good sir, is a total gamble. Sure, it’s only a $1 gamble… but it’s a gamble and that fact matters more than any price you might place on it.
Haven't the ability to return apps been around for like, 6-7 years?
EDIT: I see downthread that this has apparently changed
Haven't the ability to return apps been around for like, 6-7 years?
EDIT: I see downthread that this has apparently changed
We need to introduce a system called "macropayments" where you pay once for a complete product and they leave you alone afterward.
I think there is another piece to this. Buying a cup of coffee means I get a cup of coffee. Buying your $0.99 app means I have the right to trade my time for whatever your app provides. The reason I don't buy apps is because I don't have the time to spend on your app, not because I think the $1 is strictly more valuable elsewhere.
I don't mind buying something for a dollar and with the knowledge that it might not be that good. Gambling with a dollar is not exactly going to ruin me.
These arguments work against paying for music too!
Okay but now how will I confirm my bias?!
I prefer Costa or Nero.
bad luck for such developers, i don't drink coffee, neither drink beer
actually i can't think of thing i would buy daily which would be waste of money and not essential
if the app is useful like launcher or calendar reminders i am willing to pay, but i have trouble to imagine more paid apps i would be willing to pay with great free alternatives
actually i can't think of thing i would buy daily which would be waste of money and not essential
if the app is useful like launcher or calendar reminders i am willing to pay, but i have trouble to imagine more paid apps i would be willing to pay with great free alternatives
I wish the emphasis in TFA was not on "craftmanship",
1) it's a tired metaphor with weird resonances to a male dominated guild structure.
2) even the positive aspects don't really apply to Starbucks which is more fits the "well oiled machine" analogy. If i think of craft coffee, I think of a small (possibly independent) coffee shop where the baristas really know what they are doing
3) I think that customers do care about Quality, but they dont' (en masse) care about craft, your journey is not of typically of interest to them, just your results.
The article relies too much on a notion of craft which describes how a product is made, I believe that the consumer cares about the quality which is the result of that journey, only a fraction of customers care about the process.
1) it's a tired metaphor with weird resonances to a male dominated guild structure.
2) even the positive aspects don't really apply to Starbucks which is more fits the "well oiled machine" analogy. If i think of craft coffee, I think of a small (possibly independent) coffee shop where the baristas really know what they are doing
3) I think that customers do care about Quality, but they dont' (en masse) care about craft, your journey is not of typically of interest to them, just your results.
The article relies too much on a notion of craft which describes how a product is made, I believe that the consumer cares about the quality which is the result of that journey, only a fraction of customers care about the process.
Please, please just start charging for apps again. I specifically search for "pay once and never again" apps now.