Apple encourages developers to adopt subscription fee structure in new video
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.
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.
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.
Comments
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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.
[I'm glad to see most people are in agreement that subscription fees are money grabs and anti-consumer.]
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.
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.
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.
*until, of course, unlimited is specified in more details as did the carriers.