Subscribing to Your Favorite Apps

In a rare pre-WWDC sit-down interview with The Verge, Phil Schiller, Apple’s senior vice president of worldwide marketing, said that Apple would soon alter its revenue-sharing model for apps. While the well-known 70 / 30 split will remain, developers who are able to maintain a subscription with a customer longer than a year will see Apple’s cut drop down to 15 percent. The option to sell subscriptions will also be available to all developers instead of just a few kinds of apps. "Now we’re going to open up to all categories," Schiller says, "and that includes games, which is a huge category."

via APP STORE 2.0

The diminishing revenue split is a clear win-win. Developers get to keep more of their revenue while Apple has a new carrot to keep developers interested in continued—preferably innovative—development on the iOS platform.

I’m less hopeful about what this will do for the consumer.

I work for a company that makes a good chunk of its revenue by selling software. Yet, any time I recommend a new app to coworker, it’s the same response:

You have to pay for this?

My thought to this is always the same: "If you can’t sell software to people whose livelihood depends on selling software, how do indie developers survive?"

There’s a chance that the move to subscription software will spread the cost of an app over enough time that’ll seem less expensive, driving people hesitant to spend towards becoming a customer.

But…most apps are cheap. Ninety-nine cents, maybe a few bucks. Unless Apple is offering ten-cent subscription tiers, I find it hard to believe someone is going to subscribe to an app for 99¢ a year when that same person balked at the one-time purchase.

Will this actually do anything to entice users to "upgrade" from their free apps?

For those of us that don’t mind buying apps, we face a reality where, rather than buying an app one time for $10, we’ll be on the hook for 99¢ per month.

I for one am not looking forward to an on-going $40 monthly App Store bill.

Regardless, this is a really interesting model. Time will tell how it affects app quality and pricing.

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