Yesterday Apple announced that there will be new pricing options in the App Store. The biggest change involves the addition of subscription plans for apps. We’ve been hearing for years how software as a service and subscription plans are the future. From the developer’s perspective, this gives them a steady stream of income and a basis from which to continue application development. I understand why developers want to move in this direction. However, in order for this to work there has to be participation from consumers. Frankly, I’m not so convinced that will happen.
I think, in general, it’s easier to pay $12 once then the thought of paying one dollar every month going forward. Now multiply that times the 20 or 30 apps that you really love and things just get crazy. I’ve already received several emails from readers and Mac Power Users listeners complaining about the idea of subscriptions for all of their favorite apps. Put simply, I’m not sure consumers will cooperate with this new model. I would like to be proven wrong but developers may find that subscribers are a lot harder to come by than they think.
The 800-hundred-pound gorilla on the sofa for me in all of this is the upgrade pricing model. Is Apple ever going to publicly explain why they refuse to implement upgrade pricing in the App Store? While that model has its problems, it has been a good solution for productivity software for many years and consumers are clearly comfortable with it. You buy an app and after a year or so, the developer updates it with additional features and, as an existing customer, you get a discount on the new version. Apple has never explained their resistance to allowing upgrade pricing in the App Store.
It is a tough time to be in the App business. While Microsoft can get away with a subscription plan, I suspect a lot of smaller applications will not. Perhaps because Apple makes all of its money off hardware sales, they don’t seem very sympathetic to app developers. Finally, this race to the bottom in pricing has led to a market where it’s difficult to make quality, sustainable productivity applications. I honestly don’t know what the solution is, but I have a lot of doubts about subscription pricing being the panacea that people seem to think it is.