The downward pricing spiral of recent years, pushed by “app stores” on all major platforms, is creating the false perception that software is free to make.
Not so long ago, it was common to pay a couple dozen bucks on a productivity application. Healthy businesses flourished around small software shops crafting great applications, supported by a steady income.
Today, even a 0.99$ price tag is met with resistance and fear of a bad buy.
I see some small businesses managing to keep up on OS X and (somewhat) Windows. Everywhere else, especially on mobile, there’s a strenuous race to the bottom and you can’t go much further than zero 1.
The majority of developers publishing on app stores make less than 1000$ a month. Many earn less than 500$. That isn’t enough to sustain a single developer, let alone a small team.
I increasingly see people publish apps just to have something to show on their portfolios, so that they can sell their experience to larger businesses which can afford to sustain the cost of app development thanks to other revenue streams or VC money.
To make a living with thoughtfully crafted indie applications is becoming more a dream and less of a reality. Many startups with mobile apps either burn VC cash and fail or work towards an exit strategy driven by an acquisition. In either case the product is often shut down.
This dynamic is devaluing software to the point that most people don’t feel compelled to pay for it, forcing developers to publish free apps and depriving them of the resources to sustain a business, sparking a vicious cycle of VC rounds and acqui-hires, with users caught in the middle.
Hence the fear that most independent software developers will be crushed between large companies and the current mindset of the general public.
Being on the other side of the fence helped me to understand the value of software and appreciate all the work behind it. I’m happy to pay reasonable money for good stuff. It is our duty2 as technical people to educate our friends and family that paying for software is good and that lots of great products come from small shops, as long as we are willing to support them.
- Papering over App Store Problems
- Strategy Letter V
- Sustainable Indie Software
- Why Doesn’t Apple Enable Sustainable Businesses on the App Store?
Despite selling more than half of our total units, iOS represents just 17% of our total revenue. […] It’s really hard to say for sure. One thing is for certain: we are more likely to increase the price of our iOS software over time in an effort to make it make sense. And we’re less likely to tackle any huge new iOS projects until we get this figured out.
Put another way, we’re going to charge something sane or die trying. We tried following the iOS App Store trend by pricing Vesper at just $2.99 for months. It didn’t work. Prices like that are not sane, and not sustainable, at least for well-crafted productivity apps.