Apple reportedly asked devs to adopt subscriptions and hike app prices

“Apple invited a group of app developers to a secret April 2017 meeting in New York’s Tribeca district, asking them to move from selling apps at low prices to renting app access through subscriptions, Business Insider reports,” Jeremy Horwitz reports for VentureBeat. “This change is intended to keep users paying for apps ‘on a regular basis, putting money into developer coffers on a regular schedule,’ the report claims.”

Horwitz reports, “Apart from filling its own bank accounts, Apple wants developers to ‘create sustainable business models, instead of selling high-quality software for a few dollars or monetizing through advertising.'”

“Many consumers chafe at the idea of software as a subscription service, and there’s no question that the concept will not fly for the vast majority of titles currently in the App Store,” Horwitz reports. “Independent research suggests that video services such as Netflix, Hulu, and HBO are generating a large part of Apple’s subscription revenue, alongside top-earning freemium games. Most people will refuse to pay ongoing fees to ‘update’ something as basic as a blemish-removal tool or daily planner.”

Read more in the full article here.

MacDailyNews Take: The success of subscriptions certainly depends on the value the app delivers.

24 Comments

  1. As much as like Apple it is 💩 like that gives me pause about the company. It is not so much the idea of paying for premium, updated content. It is Apple quietly going behind its customers backs to coordinate the effort to “extort” more money from us.

    I will throw a bone out here. HERE is the collusion.

    1. Sounds more like an answer to developers moaning because they can’t retire to an island because the app they’re selling for 99 cents (that they work on 50 hours a week), just isn’t cutting it.

      Use a subscription, so that you get regular money, charge more for your hard work, just sounds like basic business 101 that, for some reason, they needed to hear from Apple.

      I mean, who would actually read “create sustainable business models” and think “NO, SUSTAINABLE IS FOR CHUMPS, APPLE! You only want me to make more money because it makes YOU more money!!”
      Apple: Well, yes, but if you’re making enough money to sustain yours…
      Dev: Then I’m not a “struggling developer” don’t you get it!!?”

      1. It actually seems like Apple doesn’t want to be bothered creating an upgrade fee process – you know, the way developers have created ongoing revenue streams for decades.

        Upgrades are vastly preferable to subscriptions in many situations. Customers know exactly what software they’re getting and can continue using it as long as the platform supports it. Developers are incentivized to improve the software with features that compel customers to upgrade to the new version. Development delays mean revenue delays; with subscriptions, that’s not the case.

        1. Apple doesn’t need to have an upgrade process. If a developer wants to have an upgrade fee process, they can sell it themselves on their own website. That option is likely for your larger companies with several streams of revenue, though (so they can go 8-16 months of low sales to new users).

          This is good information for a small company (where the developers could be working other jobs). Looking at the rise of services like Patreon, there’s a very large group of people that are willing to pay monthly understanding that it keeps the developer in business and keeps the updates coming.

  2. Stuart Mackenzie: Well, it’s a well known fact, Sonny Jim, that there’s a secret society of the five wealthiest people in the world, known as The Pentavirate, who run everything in the world, including the newspapers, and meet tri-annually at a secret country mansion in Colorado, known as The Meadows.
    Tony Giardino: So who’s in this Pentavirate?
    Stuart Mackenzie: The Queen, The Vatican, The Gettys, The Rothschilds, *and* Colonel Sanders before he went tits up. Oh, I hated the Colonel with is wee *beady* eyes, and that smug look on his face. “Oh, you’re gonna buy my chicken! Ohhhhh!”
    Charlie Mackenzie: Dad, how can you hate “The Colonel”?
    Stuart Mackenzie: Because he puts an addictive chemical in his chicken that makes ya crave it fortnightly, smartass!

  3. I avoid subscription models as much as possible. I don’t rent apps or programs. I guess Apple is not seeing all the subscription fatigue that is already going on.

    Don’t offer a piece of software for sale and only on subscription? Ok, your choice and I’ll pirate it.

    Apple still let’s me buy my music at a decent price, raise the price and try and force me on subscription? I’ll just rip the music from youtube.

      1. Let’s be clearer: you’re putting words in Dave’s mouth.

        My thoughts align with Dave’s.

        When in college, I purchased software at educational discounts. Do you think immediately on graduation I should have deleted the software and purchased the same titles at full price?

        I bought lots of vinyl records and cassettes and CDs over the years. I made lots of mix tapes and CDs from them. When iTunes was simple and stable, I ripped all my CDs from my own collection. Many of my cassettes and LPs were ripped from Library CDs that my tax payments paid for. The old tapes and LPs were donated and I’ve never profited by working as a DJ. Should I buy yet another legal copy of the old music from dead artists, perhaps in Apple’s crappy compressed ac3 format, to make you happy?

        Apple is just trying to monetize users rather than delight them. Apple is no longer an advocate for user delight. They are just gouging customers now.

  4. Give consumers choice!

    • Iff you’re not making money from sales, raise the price.
    • The App Store needs to allow free demos of expensive apps.
    • Some updates should not be free.

  5. Give consumers choice!

    • If you’re not making money from sales, raise the price.
    • The App Store needs to allow free demos of expensive apps.
    • Some updates should not be free.

  6. MDN take is not completely accurate, at best.

    Don’t do app/digital subscriptions and never will. Go to a subscription model and I’ll (eventually) stop using your app. I refuse to participate in a revenue model based on the notion of generating an endless revenue stream for… well, whoever. I have other (tech related) issues with digital subscription revenue models, but this is the main one.

    Give a decent product at a decent price. I’ll even pay a premium (I’m a Mac user, after all) if I find your product a necessity for me.

    But try to make me pay endlessly, even at a lower price point, and I’ll make do or settle with a competitor who doesn’t. Because, eventually, you’ll end up paying way more.

    If your product is good enough, I’ll pay again for a substantially update version down the road. Particularly if you’ve been giving free bug fixes and minor updates.

  7. Would like to hear what the guy from Apple really said.
    Hearing it second-hand or third-hand leaves out important details.

    Would like to get their side of the story. Learn how we benefit from subscriptions. Learn why it’s better not to own something after years of owning it.

    Until then, we can only hope Apple did not tell the developers, “Make your customers pay and pay and pay until they die.”

  8. Show me a subscription-based business that provides constant quality improvement and support, with consistently high value, then maybe I’ll change my mind. I see that all subscription purveyors, once they have the customer on autopay, just get lazy and do the absolute minimum required to keep the easy money rolling in.

    Apple basically wants to be a middleman retailer. Sorry Apple, subscription computing is not worth your price premium.

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