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Apple Announces Major App Store Changes Including New Subscription Terms and Search Ads

This particular update to the App pricing model would make me more susceptible to switching to Android in the long run. One of the major reasons for staying with Apple's iOS is my large investment in the App Store. I have a collection of paid Apps that goes back to the 2nd gen iPod touch. If they started with subscription, I wouldn't have half of that collection anymore, and moving on to Android where a lot of apps are free would be a much easier switch for me.

I always thought that the current model is unsustainable since I haven't given any money to the app developers since I originally bought the apps, but a paid upgrade would be much nicer than subscription.

On the contrary, subscriptions for certain features might be a good alternative to IAP's, but I can't see keeping even half of my apps that I have now if all 323 switched to a $1 subscription.
 
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TallManNY said:
Subscription pricing is great. Pay a small amount per month. See if the App "sticks", keep paying if it does, delete and stop if it doesn't. It is a fair pricing. The folks who really like the app pay the most for it but they are also the ones getting the biggest benefit. The folks who don't like it too much pay very little. So we have payment and usage aligning. The developers actually find a way to make money and they keep supporting their apps (in fact old apps with loyal customers become even more valuable than new apps). So consumers get better apps from more developers and their favorite apps become better supported.

I bet we are going to see subscription pricing at price points per month of something like $1. It will basically mean that even good pro apps can be tried out with full features for basically free.
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Yeah, but what happens if ten of the apps you want to use/rely on the most all charge a dollar a month.
Does is it still sound appealing?
That gets into cable subscription pricing.
 
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avanpelt said:
Make no mistake...Apple will ultimately make more money from apps that go to the subscription model even though their annual cut will go from 30% to 15% after the first year. Apple wouldn't have agreed to making this change if they didn't crunch the numbers and conclude that they will stand to make more money than they do today. Apple is not doing this because they want to be "friendly" to their end-users no matter what Schiller says. They're doing it because they and their developers want more consistent revenue streams. Period.
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Do you believe in win-win situations or are you communist?

It's a win-win-win-win:

1. developers can make more money, because they can sell apps that they wouldn't be able to sell before. Nobody is buying $20 and $30 and $1000 apps on the AppStore, too much of an upfront cost, and for some reason, people are ok with buying/pirating apps like that for PC's, but not for iPads and iPhones.

2. Developers have now a reason for continuing support of good apps.

3. Pro users can have a better catalog of software. And can have try apps and experiment with them, without huge upfront costs.

4. Apple makes more money by solving this problem.

People complaining are the people that don't even need Apps.
 
Good luck getting normal people to pay monthly for their iOS apps. Most people won't even buy an app for a couple bucks, let alone every month. I don't see this model working for a lot of apps and it will drive most people to just stick to using free Google apps or stock iOS apps, which will just create more ecosystem lock-in for Apple and Google.
 
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Michael Goff said:
I don't see why people are so against there being the option of a subscription. If you don't like them, don't use them.
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I'm not sure that the subscription is going to be an option for the end-user if the developer chooses to go that route with their app. I don't recall reading anything that said a developer could give the customer the choice to either pay an amount up front for an app or have a subscription fee charged every year. I think it's an either/or scenario depending on what the developer chooses to do.

If, say, 20% of the 30 or so apps that I use consistently on my iPhone went to a subscription model and they each charged $5.00 a year, that means (if I understand what Schiller is saying) I can either delete those apps if I don't want to pay the fee or I can just accept the fact that I now have to pay $30.00 more every year for the privilege of using those apps -- regardless of whether the developer releases four upgrades per year or no upgrades at all.
 
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macfacts said:
The summary did say it was an auction style of how ads will be sold. Doesn't make sense for Apple to accept less money from indie developers when the big guys like MS and google and Adobe have an advertising budget.
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And mr. Schiller said "fair to developers, and fair for indie developers, too". So it looks they have something in mind for indies.
 
I don't mind subscriptions if it encourages indie developers to keep updating and improving their app.
 
What I found most interesting is that Apple has decided to cut their % off of renewals. About time.
 
ethanwa79 said:
You mean how right now how you pay $1.99 and get all of the updates for that app for FREE FOR LIFE? That's a ridiculous model that was never long-term sustainable. At least this way with a subscription developers will be motivated to update their apps often to keep user's engaged.

Everything is going the subscription route: Office, Photoshop, heck even Windows is a "service" now.

Version 1, version 2, version 3.0... those are things of the past.
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All a developer has to do is release version 2.0 for a new price and cease upgrading 1.0, just as they do in the Mac app store. No need for subscriptions to an app that I pay yearly for. That is a horrible model.
 
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I don't actually mind the idea of subscriptions for apps that merit it, both by being really exemplary/worthwhile apps, and by being updated often, with useful improvements, especially if the apps have some ongoing costs for the developer (e.g. their own back-end server if they really can't do what they need via iCloud and such). In this category I'd put (in no particular order) things like, 1Password, Overcast, Drafts, Day One, OmniFocus, Pythonista.

HOWEVER, I expect to see a lot of developers having a substantially overinflated sense of their app's worth. I'm guessing a bunch of apps that I bought for $5 and are worth $5 are going to decide that they should be $5/year, without doing anything extra to merit the ongoing cost. And I expect I'll be throwing out a bunch of those apps. (I also expect to see some folks who have one good utility app to offer it instead in a subscription bundle of that app plus their seven other not-very-good apps, harkening back to the days of music available only as albums, where a band would have two good songs and six filler songs you'd be obliged to buy to get the good two).

I'm hoping that'll level out after a few months, once developers see the repercussions, so that only apps that really merit subscriptions go with that model.

It will be, hmm, interesting, to see exactly how they handle apps that transition over - say I bought a $15 app a year ago and it moves to a $5/year subscription model: it'd be nice if it applied the purchase price to the subscription, pro-rated for when I bought it, and thus decide I've got another 2 years already paid.

As well, there's a substantial pain point if a developer converts an existing to the subscription model, then finds that they overestimated their app's value and so they switch back to a plain purchase model - how does Apple handle people who purchased it before the conversion (that's not too hard, they just keep it), and how do they handle people who purchased it while it was a subscription (possibly for a lower price than the previous full purchase price).
 
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All Schiller had to do was allow developers to set upgrade pricing for their apps and have Apple take a 15% cut of upgrade revenue. It's really not that complicated to figure out.

Apple and a fair amount of developers are likely going to learn what Smile Software learned earlier this year with their proposed changes to TextExpander pricing (i.e. subscriptions). That didn't go over well.

I don't "lease" my iPhone, I buy it outright. If I don't have the money to buy it outright, I don't buy it. I want to buy the apps I put on my phone and own them, not lease them.
 
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I've mentioned a few changes I'd like them to implement in the App Store in this thread and another is release notes when releasing a new update. Make it mandatory to state what's changed. The worst part about it is when they can't even use the correct grammar and put a full sentence together.

"bug fixes"
 
SMIDG3T said:
I've mentioned a few changes I'd like them to implement in the App Store in this thread and another is release notes when releasing a new update. Make it mandatory to state what's changed. The worst part about it is when they can't even use the correct grammar and put a full sentence together.

"bug fixes"
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Or, "We release updates to our app every two weeks. Thanks for using our app!"

Why even bother having release notes at all if that's what you're going to say?! They might as well just put ":)"
 
John Gruber adds a good note. The subscription split will change after the first year, to 85/15 from 70/30.

That's a really good move, and very fair.
 
Michael Goff said:
I don't see why people are so against there being the option of a subscription. If you don't like them, don't use them.
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TL;DR: This is only valid for new users.

Absolutely true, assuming that you don't already use the software in question. It's a case of "it's easier to stay out than to get out." I for one will pretty well never go in for a subscription service that doesn't offer a hell of a benefit, with no enormous downside. So, I do have a subscription to Apple Music, for example, but if I want to end that subscription, then I can, and I lose access to the catalog. I do not lose access to my bought songs and whatnot--not a huge pain. Once upon a time I had cable, but I cancelled because I only watched little and it wasn't worth it, so I lost cable, and it was no big deal. Again, no personal hit.

However, I have used two software packages in the past that have gone SaaS. YNAB and TextExpander. In both cases, I'd been a user for many years, and very happily so. I updated every time there was an update, and I bought the major upgrades. The result of that was that I had a crap-ton of my data invested in these apps--workflows that have been ingrained for years, processes that worked for me. And then the developers decide that they're going SaaS. They essentially have me by the balls at that point because if I simply say, "well, then I just won't do it" I lose my data (or at least the ability to work with it as I have been forever). In the case of these packages I was paying something like 40 bucks a year for both between major revisions where I'd pick up the most recent for upgrade pricing, even though I didn't HAVE to. The subscription model has me paying over 150 dollars a year Canadian just to get and use my own historic data. Having my data held hostage and paying that is extortionate (let's forget for the moment that YNAB has its head so far up its arse they can't even import the old data yet in spite of promises to be able to do so for six months, but I digress). Even if you argue then that I should simply prioritize what apps I truly NEED, thereby leaving other software out in the lurch, I resent the fact that I need to say, "please sir, may I have and use my data" to a company every month. If I buy it, I want to own it. I don't want the chance that someday for whatever reason all of my data simply vanishes because I can't pay (the whole 'skip Starbucks this month' argument is such trite bullcrap).

Anyway, I'm ranting. Subscription bad. Owning good. Will not subscribe to anything mission critical, and am unhappy Apple is espousing this.
 
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sinsin07 said:
Yeah, but what happens if ten of the apps you want to use/rely on the most all charge a dollar a month.
Does is it still sound appealing?
That gets into cable subscription pricing.
Click to expand...

For a subset of people this might turn out to be more expensive. In some respects those people were buying those ten apps cheap and benefiting from folks who bought them and then didn't end up using them much or they were benefiting from developers who made an app and then didn't get much revenue out of it. Basically the buy once, use "forever and as much as you want" model results in some folks being "free riders" either on the backs of developers who don't make a living or on customers who bought and then didn't use the app much. So this model where users of the app pay for the months in which they are using the app really appeals to my sense of fairness.

In your comparison to cable subscription pricing this model is actually the "a-la carte" pricing that folks have been clambering for for years. Each App is basically a channel and you only pay monthly for the channels you want to use. It is fair and transparent pricing with little risk for the consumer. You can opt out of an App anytime you want if a better or cheaper one comes along or if you just don't use it anymore.
 
SMIDG3T said:
A maximum of ONE ad will be displayed at a time and you won't see any if you're under the age of 13.
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That has nothing to do with my post... My point is indie developers don't have a ton of money to spend on ads but the big developers do. It could make it more one sided to big developers over indie.
 
ethanwa79 said:
You mean how right now how you pay $1.99 and get all of the updates for that app for FREE FOR LIFE? That's a ridiculous model that was never long-term sustainable. At least this way with a subscription developers will be motivated to update their apps often to keep user's engaged.

Everything is going the subscription route: Office, Photoshop, heck even Windows is a "service" now.

Version 1, version 2, version 3.0... those are things of the past.
Click to expand...

No that is not what I am saying at all...

If the App is worth $10+ then they should not charge me $1.99 in the first place and come back later like a Junkie begging me for more.

The only reason to charge $1.99, or give it away for 'Free' when it is not 'Free' or not worth $1.99 is to drum up sales by misleading the consumer.

Yes, Photoshop and Office 365 are subscription and I use neither. I use QuarkXpress, a PhotoShop alternative and Office 2011..
 
Sounds good, as long as the ads are kept in check, which I have no reason to think they won't be. If I were in a position to advise Schiller, I'd say that there needs to be a premium section of the app store. The first would be a "Pro" section for professional apps. This will be vital to the success of the iPad Pro and supporting higher price points for quality productivity and creative software on the App Store. The second would be a "premium games" section for AAA titles. Same applies here, as the App Store is often a race to the bottom, it would be nice to get more higher-end titles with controller support on the App Store. They need to do more to promote advanced development of quality, high-end apps so developers are incentivized to put in the time and effort and get them paid. Perhaps it could be a curated selection, invite-only, or you could apply to have your app included. This would obviously be arbitrary, but would help keep these sections premium. Perhaps there could also be minimum price floors for one-time and subscription based prices. There are many avenues to explore, but they need to do something.
 
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