Apple encourages developers to adopt subscription fee structure in new video

Posted:
in iOS
Apple on Monday continued to push app makers toward in-app subscriptions by sharing a new "Developer Insights" video on its developer portal espousing the benefits of reoccurring payments.

App In-App Free Trial


In the roughly three and a half minute video, developers from popular apps Dropbox, Bumble, Elevate and Calm discuss how subscriptions have helped them "create great customer experiences." This includes predicting their app's revenue, tips for encouraging subscriptions, and how they are encouraged to improve the app.

"The value for the user is that you're not just buying one thing at one time," says Elevate's Director of Growth Jesse Germinario. "You're actually buying something that is evolving, something that is growing."

Apple has increasingly encouraged developers to embrace in-app subscriptions rather than offer a one-time initial payment, traditionally the preferred payment method since the App Store launched in 2008.

The company has gone so far as to hold secret meetings with some developers. During one such gathering last year, Apple warned developers that the App Store pricing model was changing, with one-time payments making up less of the market as subscription apps take over.

Recurring payments makes it easier to acquire customers with a free trial, and gives developers incentive to continuously update the app with fresh content and improved experiences. Importantly, subscriptions present constant revenue for developers, who often have to maintain servers and other backend processes to keep their wares running smoothly.

While some turn their nose up to subscription policies, recurring payments is clearly working for a large number of developers.

When the App Store originally launched, many apps were priced at $4.99 or $9.99 as developers tested the waters to see what customers were willing to pay. Over time, that price dropped and now consumers are most content to buy apps priced at $.99 or $1.99.

Head over to Apple's developer portal to watch the video for yourself.
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Comments

  • Reply 1 of 51
    cornchipcornchip Posts: 1,087member
    I know it’s the way of the future, doesn’t make it any less lame. 
    mazda 3swelshdogdysamorialostkiwipscooter63bonobobrepressthismike54davgregCarnage
  • Reply 2 of 51
    Yeah...they used to call those updates. No thanks on the subscription services. 
    dysamorialostkiwibonobobmike54GeorgeBMactoysandmeStrangeDaysdavgregentropysCarnage
  • Reply 3 of 51
    SoliSoli Posts: 8,231member
    cornchip said:
    I know it’s the way of the future, doesn’t make it any less lame. 
    I mostly agree. It doesn't shock me to have to pay a monthly fee for certain services and yet others it seems odd. I can't rule out that it's possibly more of a bias than it not making sense for the developer. Even with 1Password I scoffed at the notion and yet it ultimately means I pay less than I previously was to update all my 1P apps periodically.

    PS: You don't have to use 1Password's online storage. All the old methods for syncing your data are still available.



    edited September 10
  • Reply 4 of 51
    lkrupplkrupp Posts: 6,302member
    mac_dog said:
    Yeah...they used to call those updates. No thanks on the subscription services. 
    Some of the most useful and productive apps have switched to subscription models. 1Password 7 is one of them. ClamXAV started out as donation ware, then became a paid app, and now version 3 is subscription. Fine and dandy but there is a limit to how many subscriptions the market will bear. I currently subscribe to Office 355, Quicken, Amazon Prime, Netflix, and Apple Music. Something's got to give. Where I may have paid up front for a single license app because I found it useful I now have to consider the budget for subscriptions before I decide. Do I really need it and is it worth paying a monthly or annual subscription? The money adds up rapidly at $10/mo. I have a feeling the subscription model is going come back and bite a lot of developers in the ass. I have already decided not to update to 1Password 7 because version 6 still works as advertised. 
    mazda 3slostkiwipscooter63dangermouse2crossladCarnage
  • Reply 5 of 51
    I avoid Calm even though I really like the app because of subscription. I understand it’s another option for income to app developer but “encouraged” by Apple? Could end up be harmful to the ecosystem.  
    edited September 10 dysamoria
  • Reply 6 of 51
    Of course Apple is pushing it. Gotta boost those services revenues.
    jbdragondysamoriabonobobtoysandmedavgregentropys
  • Reply 7 of 51
    Of course Apple is pushing it. Gotta boost those services revenues.

    Since subscriptions drop to 15% after the first year, then wouldn’t this lower Apples service revenues? Surely they want people to keep their subscriptions which means an eventual loss for Apple and gain for developers.

    I don’t mind subscription. But I think they only work for a small number of Apps that provide an ongoing service. Dropbox makes sense. A game or calculator App doesn’t.
    racerhomie3
  • Reply 8 of 51
    I dislike the subscription model for certain apps. I use a very useful sleep tracking app which allows me, among other things, to track how different things such as using an eye mask or showering before bed affect how well I sleep. I purchased this app many years ago under the single-payment model, but have refused to update the app after it moved to a freemium subscription model and put the above functionality behind the pay wall. I can understand the reasoning for paying for a subscription if I want to backup my data to their servers, but not for tracking data that I enter myself.
    GeorgeBMac1983
  • Reply 9 of 51
    Developers should be _required_ to offer updates on a regular basis when customers pay a subscription fee.
    jbdragondysamoriabonobobtoysandmecommand_f
  • Reply 10 of 51
    It’s really depressing to hear that Apple encourages app subscriptions. They are little more dignified than holding the customer hostage. They exist not for the consumer but for the business, to provide more revenue by forcing customers to pay to keep using something they think they need. It’s not gasoline for the car, or food, or even a music subscription to 1000’s of songs you’d otherwise not have the money to access. They are an embarrassment to the industry.
    dysamoriamike54command_fDAalseth
  • Reply 11 of 51
    dr. xdr. x Posts: 163member
    I agree with all of the comments, I'm not a fan of subscriptions, I feel software should be owned, not rented.
    sweetheart777dysamoriaStrangeDaysdavgregCarnage
  • Reply 12 of 51
    jbdragonjbdragon Posts: 1,830member
    I'll just refuse to use most all if this subscription garbage.  It's almost as bad as Freemium games.  I just refuse to download most all and refuse to pay.  So I get to a point can't move forward anymore without paying.  I just quite and do something else.  I'd rather flat out buy a game.

    dysamorialostkiwipscooter63evilution1983davgreg
  • Reply 13 of 51
    dr. xdr. x Posts: 163member
    lkrupp said:
    mac_dog said:
    Yeah...they used to call those updates. No thanks on the subscription services. 
    Some of the most useful and productive apps have switched to subscription models. 1Password 7 is one of them. ClamXAV started out as donation ware, then became a paid app, and now version 3 is subscription. Fine and dandy but there is a limit to how many subscriptions the market will bear. I currently subscribe to Office 355, Quicken, Amazon Prime, Netflix, and Apple Music. Something's got to give. Where I may have paid up front for a single license app because I found it useful I now have to consider the budget for subscriptions before I decide. Do I really need it and is it worth paying a monthly or annual subscription? The money adds up rapidly at $10/mo. I have a feeling the subscription model is going come back and bite a lot of developers in the ass. I have already decided not to update to 1Password 7 because version 6 still works as advertised. 
    if you wish to get v7 of 1Password, they still have it available as a single license I believe. Just download v7 from their website: https://1password.com/downloads/ and run the installer. Once you open the application, go to File > Purchase 1Password and you'll be taken through the steps to buy a license for version 7. Hope this helps. I'm a fan of owning software rather than renting. You are correct that v6 still works but they won't support it with future updates. I was able to get a single license for v7 at a discount by applying for their beta program.
    edited September 11 lostkiwi
  • Reply 14 of 51
    No!


    [I'm glad to see most people are in agreement that subscription fees are money grabs and anti-consumer.]
    1983
  • Reply 15 of 51
    welshdogwelshdog Posts: 1,608member
    Somebody who either is a developer or knows people who are, tell me something.  Isn't this move to subscription based apps just a way for developers to make more money?  And to do it knowing they kind of have customers over a barrel in many cases, leaving them no option but to pay up?  I really hate this trend.  I fail to see what has changed in the app developement world that suddenly these coders are all starving and have to do this in order to survive. Not just referring to Apple's push in this direction. I've got some Mac apps now that were non-subscription for many, many years and suddenly switched to subsciption. The devs claimed they couldn't make enough money and keep doing regular updates.  I just don't believe it.
    lostkiwicommand_f
  • Reply 16 of 51
    There was a walking/tracking app I liked a lot, until they chose to sunset the pay-once 32-bit version with a 64-bit mandatory subscription version.
    I looked at competitors, and they had all gone to the same revenue model. Now I just do without.
    1983
  • Reply 17 of 51
    dewmedewme Posts: 1,621member
    I see pros and cons on both sides, developers and consumers, on this topic.  My hope is that this ultimately works itself out by people voting with their wallet. For highly specialized and vertical business apps that require a high level of support or frequent updates the subscription model usually makes sense. When there are free or single payment alternatives, for example the iWork apps versus Office 365, this usually sense. But not all wallets are created equal and some folks will be left out in the cold without access to apps that would make their lives better and/or easier. 

    The app purchase model that I vastly prefer is to pay once for a specific version/release of an app and then pay a subsidized upgrade price for newer versions if I believe the newer version is worth the upgrade price. I’d be willing to live with developer support for the version I purchased being time limited or moving to a per incident fee when a newer version is released that I decided not to purchase. I’d also be willing to pay more for upgrades, on an escalating scale, if I skip versions that I could have upgraded to but chose not to. For example, upgrading from the immediate prior version is 25% of the full price, upgrading from 2 prior versions is 50%, and so on. In my opinion, paying for upgrades forces the developer to add more value to keep current customers on the upgrade cycle. 

    Some, but not all, app subscriptions feel like a captive situation. They have your data or work investment tied up in the subscription. If you don’t pay up you lose your investment in part or in total. This applies whether or not the app developer adds any value year over year (or whatever the payment interval may be). Yeah, it’s like cable TV, cellular service providers, home security service providers, etc. We’ve been bent over the barrel for so long by bad actors using subscription models that constantly go up every year regardless of the quality of service and many of us don’t have a yearning desire to add more subscriptions to our lives.
    bonobobpscooter63mariocommand_f
  • Reply 18 of 51
    You know, a lot of software people use is already under a subscription model. Instead of calling it a subscription it’s called an upgrade. And instead of paying monthly/yearly you paid every couple years for the latest version. Yet when you change the wording suddenly it’s bad?

    I always bring up Office 365. There’s a reason Office 365 is so successful - because they offer a lot of value for what you pay. More than what you used to get by upgrading Office every few years. Developers need to offer compelling subscriptions. Simply converting your App price from one-time to subscription isn’t going to be enough.
    Soli
  • Reply 19 of 51
    Rayz2016Rayz2016 Posts: 4,047member
    welshdog said:
    Somebody who either is a developer or knows people who are, tell me something.  Isn't this move to subscription based apps just a way for developers to make more money?  And to do it knowing they kind of have customers over a barrel in many cases, leaving them no option but to pay up?  I really hate this trend.  I fail to see what has changed in the app developement world that suddenly these coders are all starving and have to do this in order to survive. Not just referring to Apple's push in this direction. I've got some Mac apps now that were non-subscription for many, many years and suddenly switched to subsciption. The devs claimed they couldn't make enough money and keep doing regular updates.  I just don't believe it.
    What changed was that folk suddenly decided that several hundred dollars was too much to pay for an app, so developers suddenly found that they were trying to make a living with an app that they could on,y sell for $2. 

    Vellum sells without a subscription, and people complain about the price, then complain when they have to pay half as much again a few years later for the upgrade. 

    If you’re going to do subscriptions though, then you need to have some kind of ongoing service attached to it, or do a reasonable bundle to sweeten the deal. 
  • Reply 20 of 51
    cornchip said:
    I know it’s the way of the future, doesn’t make it any less lame. 
    I feel it’s just a stopgap on the way to a flat fee. iCloud storage did it. Music did it. I’m sure the Apple Movie service will go there (hello “attractive” bundles). And since I don’t see why anyone in their senses would have half their apps running on a subscription basis spending 50+ per month they rarely use (not talking strictly productivity apps) to me the logical conclusion is something like shelling out a nice and round number more in the ballpark of 100 per month and get unlimited* access to music, movies, apps and storage. 

    *until, of course, unlimited is specified in more details as did the carriers. 
    1983
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