Apple Prevents Omni Group From Offering Discounted Mac App Store Upgrades

[Lazy]

Neither of you has gotten the point. A billion dollar company understands market trends far better that smaller ISV. There's nigh 7 billion people on the planet. The trend is clearly moving towards more affordable software that can be sold globally. WWDC again banged the "localize your app and go global" mantra.

Paid upgrades are messy. I just bought Hypes Tumult 2. They put it on sale for everyone and it sufficed for an upgrade. I'm not going to complain about new users getting the same price. The belief that I, as a former user, should always have a cheaper price than new users is entitlement behavior.

Paid Upgrades stink. They force developers to create a cutoff date. People outside those dates don't get the upgrade pricing which causes rifts.

Apple knows what they're doing here folks. Paid upgrades buttressing overpriced software is old ideology. Come into the 21st century.

And what's this crap about "I always buy locally from the vendor" That's stupid. I've got four Macs and about to buy more. I'm not going back to tracking serial numbers so that I can save a vendor %30. My allegiance is to my family. If a company makes my life easier then i'll pay a respectable price but i'm not into charity cases within the tech sector.

The dollarness of a company has little to do with what they understand. There are plenty of examples of "billion dollar" companies completely misunderstanding markets. Sometimes even because they have gotten so big they've lost touch with what's going on.

What is messy about paid upgrades (in general)? You haven't said anything concrete here or refuted anything.

Why do paid upgrades stink? As for a cutoff date causing rifts, welcome to the way economies have been for centuries. How is this different from any other product going on sale? Those who bought it the day before paid more, those who wait until after the sale paid more? The rest of us seem to be able to get over it.

If a particular piece of software is overpriced don't buy it. Period. Upgrades or not, free or not. In an efficient economy things will find their market price. It's not hurting you at all to allow every vendor to decide their pricing strategy.

 

[stuffradio]

Are you listening to yourself? I am a consumer, most of us here are. And BTW, tell that to the others who feel OS X Mavericks should be free just because Apple is rich.

That's why I said you're thinking like one. I am a web developer with some work on other non web stuff. I have an idea what things that take a long time to build feel like. Most of my work is web related though.

 

[Liquorpuki]

Maybe you'd all have a point, if not for this (quoting myself, here): "The kicker is that every one of Apple's apps is amongst the... Top Grossing apps. In fact, on the Mac App Store, Apple's software accounts for... 8 of the top 10 highest-grossing apps." In other words: each of Apple's budget-priced apps makes more money than each of OmniGroup's premium-priced apps. So, we're not talking about a "loss leader" strategy at all, because there's no loss. Apple's apps are making more money than just about every other app in the App Store.

iOS is a commoditized sw market with an app discovery problem. Commoditization means it's next to impossible to create a brand on this platform. You gotta be lucky like Rovio to create a brand out of thin air. Apple along with other established companies like EA don't have to deal with this - their software is already a brand.

App Discovery problem = unless you get on the top 100 chart or find yourself marketed directly by the app store or WWDC, you're screwed because the store is too crowded, nobody will know your app exists. How does Apple's first party software get marketed? Huge banner at the top of the app store along with a huge spiel at WWDC.

Apple's business strategy is to drive down the pricepoint of software to fuel hardware sales. That hardware pricepoint is always maximized at the expense of software. That's why they offer their OS for $20, first party apps for $10, put out Logic for $200 when the market value of their competitors' DAWs is around $500, and have considered abandoning the pro market (with intrinsically expensive, non-mass marketable software). That's also why they never pricedrop their hardware, with industry high margins, until the next generation comes out.

You can't compare Apple first party monetization to a third party dev's. Read this blog post

 

[Ken Case]

Not being able to offer the same discounted upgrade pricing to all our customers no matter where they purchased is obviously disappointing for us. But I should note that this lack of discounted upgrade pricing actually affects a minority of our customers, because most of our customers still purchase directly from our online store (where we can offer discounted pricing).

And, really, this just means we're back to the same state of affairs that I outlined in my original blog post from the launch of the Mac App Store in January, 2011.

As I said in that original post:

The Mac App Store is the most convenient way to buy our software, letting you purchase, download, and install our apps with just one step, and easily update our apps at the same time as you update other apps you've purchased from the the store.

But to be clear, the Mac App Store is not the only way to buy our software: we'll continue to offer direct sales and updates through our own website as well. Through our website, we can offer much more flexible terms and options: trial and beta downloads, upgrade pricing, and discounts for volume, bundle, and educational purchases.

No matter which way you buy our software, you'll be getting the same product: all of our Mac App Store apps are exactly the same as the apps we sell through our website (except for a few minor changes made to work with the store). We'll also keep future updates to our apps in sync—apps you've purchased directly through us will continue to update themselves as they always have, while App Store updates will appear on the App Store (after a slight delay due to the App Store's review process). And either way, you'll have the same great support from our team here at Omni.​

All of that is still true, and two and a half years later we still think the App Store is the most convenient way to buy our software. And our software certainly has done well on the App Store, with strong showings in the App Store's top grossing charts for their categories.

--

Hopefully that addresses a few of the questions I've seen brought up in this thread; but let me see if I can clear up a few others:

The exposure (and sales) OmniGroup get from the Mac App Store is 100x compared to their website.

We're certainly happy about the incremental sales we've made through the Mac App Store, but every week we still sell more copies directly from our store than we do through the Mac App Store.

Apple brought you those customers, they deserve the 30% cut.

My first choice has always been to be able to offer upgrade pricing within the App Store, preserving Apple's 30-40% cut, and I've been asking Apple for this since early 2008—before the App Store shipped. (I've even proposed that any discounts we offer could come out of our 60-70%, leaving their cut untouched.)

I don't think people fully realize that this Omni app was meant to do exactly that, circumvent the App Store.

We were simply trying to offer all of our customers the same benefits, no matter how or where they purchased our app (as we've previously done with retail boxes). As noted above and in my blog post, in my ideal world we would be able to offer upgrade pricing through the App Store itself.

Paid Upgrades stink. They force developers to create a cutoff date. People outside those dates don't get the upgrade pricing which causes rifts.

I'm not sure why developers would be forced into creating a cutoff date. Our upgrade discounts are available to anyone who has ever purchased our apps: people who purchased OmniGraffle 1 ten years ago are eligible for a discounted upgrade to OmniGraffle 5.

Offer a free update with the same functionality as the original and sell an unlock code for the new goodies as an IAP. That way, everybody gets free bug- and OS-version-compatibility fixes for free, and the vendor gets a chance to really plug the update. I suspect the uptake rate would be pretty high...

When selling new, isolated functionality, In-App Purchase works great. (We look forward to selling Visio and Microsoft Project compatibility support as In-App Purchases on iOS.) But when an app is completely redesigned, In-App Purchase makes for a very awkward user experience. We want new customers purchasing our app to see our latest and best interface, not to be saddled with an old awkward interface until they pay more!

 

[HenryDJP]

That's why I said you're thinking like one. I am a web developer with some work on other non web stuff. I have an idea what things that take a long time to build feel like. Most of my work is web related though.

Understandable, but as developer, your job is to create the app. As a consumer, my job is to pay for the app. Do you or anyone else as a "developer" ever think about the work it takes for us, the consumer, to make the money to pay for your apps? No. Should you? No. And please don't tell me that you have always wanted to pay for everything you either wanted or have. It's human nature for people to want something free regardless how much work was put into it by the creator.

I love how you ignored my point about people right here on MR expecting Mavericks to be free regardless how much work Apple put into it. Seems as though the small developers always think of themselves and not Big Brother that gives them a reason to have a living.

 

[HenryDJP]

Not being able to offer the same discounted upgrade pricing to all our customers no matter where they purchased is obviously disappointing for us. But I should note that this lack of discounted upgrade pricing actually affects a minority of our customers, because most of our customers still purchase directly from our online store (where we can offer discounted pricing).

The Mac App Store is the most convenient way to buy our software, letting you purchase, download, and install our apps with just one step, and easily update our apps at the same time as you update other apps you've purchased from the the store.

But to be clear, the Mac App Store is not the only way to buy our software: we'll continue to offer direct sales and updates through our own website as well. Through our website, we can offer much more flexible terms and options: trial and beta downloads, upgrade pricing, and discounts for volume, bundle, and educational purchases.

When you say, "WE", I suppose you're talking about your own apps and own website ? Here's the thing, this doesn't apply to everyone unfortunately. There are several applications that I am forced to purchase from the MAS. I go to the website, click "purchase" and I get carried to the MAS. No other option.

 

[Ken Case]

When you say, "WE", I suppose you're talking about your own apps and own website (that I somehow missed because I don't even know what you develop)?

I'm talking about the Omni Group (the subject of this thread); sorry I didn't make that more clear!

 

[Serelus]

I'm talking about the Omni Group (the subject of this thread); sorry I didn't make that more clear!

You realise, the problem at hand though? The consequences, the rules that have to be rearanged just for the sake of paid upgrades.

You've probably already read this but what about In app purchases?
Update the app for free, but add all of the new features as in app purchase.
The app remains intact, and most importantly usuable for those who don't feel the need to upgrade, and those who do can.

Other than that the model itself seems very bad, I don't feel like EA upgrading Plants Vs Zombies every other month, just to get my money. Thank god for apple protecting us from such companies.

 

[Renzatic]

You realise, the problem at hand though? The consequences, the rules that have to be rearanged just for the sake of paid upgrades.

You've probably already read this but what about In app purchases?
Update the app for free, but add all of the new features as in app purchase.
The app remains intact, and most importantly usuable for those who don't feel the need to upgrade, and those who do can.

That's the thing, it's a relatively small and easy thing to change. Since all your software is tied to your account, all Apple should have to put in place is a simple check. If MAS sees that have the previous version, then it offers you the upgrade at a discounted price. If you don't, you pay the full amount. Apple provides the setup, the developer sets the price, and Apple in turn gets their 30% cut. It doesn't have to be done from inside the app. The storefront could and should be able to handle it.

Other than that the model itself seems very bad, I don't feel like EA upgrading Plants Vs Zombies every other month, just to get my money. Thank god for apple protecting us from such companies.

Apple doesn't protect you from such companies. They get a nice, tidy cut of the profits from IAPs.

 

[Ken Case]

You realise, the problem at hand though? The consequences, the rules that have to be rearanged just for the sake of paid upgrades.

No, sorry, I'm not sure I understand. The App Store already has support for both paid upgrades and free updates: when a developer releases a new version of an app, they can either submit it to the App Store as a new app (charging full price for it) or submit it as a free update to an existing app.

What I'm advocating for is the option of offering discounts on upgrades, rather than requiring that customers always pay the full price again.

In the world of consumable content which dominates Apple's iTunes Store and App Store—music, videos, and games—upgrade discounts are largely irrelevant. When I buy a movie or play a game, I don't expect to get a discount on any sequels: in fact, the sequel is actually more valuable to me because I was hooked by the original content. (This is why we see some TV series on the App Store make their first episode available for free, why iTunes will feature a free "song of the week," and why so many games offer their initial content for free and charge once you've gotten hooked.)

Since this sort of consumable content dominates Apple's online stores, I haven't been at all surprised that they haven't prioritized adding support for providing upgrade discounts. Instead, they've prioritized features that are useful to those content providers, like buying an entire music album or TV series at once for a discount. (Side note: these sorts of bundled discounts are something we'd also love to see with apps!)

If all apps on the App Store were consumable, that would be the end of the story: the current model works great for that, and its top grossing charts are dominated by apps which succeed under that model.

But the kind of apps we build at Omni are intended to last for decades, not weeks. Most of the value of purchasing a productivity app comes from the initial investment: when I buy a spreadsheet, I can use it to do things I couldn't do as efficiently before. I'm not using the app because it entertains me, I'm using it because the cost of investing in that tool is less than the cost of trying to do that work (or not doing that work) without that tool. Investing in the tool saves me money over time.

So let's say I've invested in that tool, and my investment is paying off—but then a new version of the tool comes out. How much is the new version worth to me? Well, I can already use the older app to do many of the same things as I would do with the new tool, so the value of the upgrade is simply how much better it is than the previous version. I can't justify the cost of making a full investment in the app all over again. I'm buying a tool, not consumable content.

As someone who has already invested in the previous version, what will make investing in the new tool worthwhile will be discounted upgrade pricing based on the relative increase in value of the new version, rather than having to pay for the full value of the app all over again. Otherwise, it may not be worth purchasing.

 

[haruhiko]

A simpler workaround for the developers is to ask users to e-mail the iTunes receipt to them as a proof of previous purchase. Just like what Splashtop (iOS app) did when they released a new version 2 with subscription based Anywhere access pack. I got my unlimited anywhere access pack by e-mailing them my iTunes receipt of the first version.

Of course the drawback is that people may produce fake iTunes receipt e-mails to the developers but anyway they get the money, and they can view it as a limited time promotion.

 

[Ken Case]

A simpler workaround for the developers is to ask users to e-mail the iTunes receipt to them as a proof of previous purchase.

Yes, I thought this was allowed—and that's effectively what we were doing with our automated process.

But what I learned yesterday is that so long as we continue to sell our apps through the Mac App Store, we are not allowed to distribute updates through other channels to apps which were purchased from the App Store. This limitation is about distributing updates to apps through other channels (even free updates), it's not specifically related to upgrade pricing.

 

[stuffradio]

Understandable, but as developer, your job is to create the app. As a consumer, my job is to pay for the app. Do you or anyone else as a "developer" ever think about the work it takes for us, the consumer, to make the money to pay for your apps? No. Should you? No. And please don't tell me that you have always wanted to pay for everything you either wanted or have. It's human nature for people to want something free regardless how much work was put into it by the creator.

I love how you ignored my point about people right here on MR expecting Mavericks to be free regardless how much work Apple put into it. Seems as though the small developers always think of themselves and not Big Brother that gives them a reason to have a living.

I do think about it. I still buy apps just like everyone else. If it goes free, I get it, but I also get apps in the past that have gone free. I consume and I make things.

There was also nothing to add to your point about people wanting Mavericks to be free. I know that is the case. If I want it though, I'll be buying it.

 

[BarryL]

What a bunch of crap.

 

[Lazy]

iOS is a commoditized sw market with an app discovery problem. Commoditization means it's next to impossible to create a brand on this platform. You gotta be lucky like Rovio to create a brand out of thin air. Apple along with other established companies like EA don't have to deal with this - their software is already a brand.

App Discovery problem = unless you get on the top 100 chart or find yourself marketed directly by the app store or WWDC, you're screwed because the store is too crowded, nobody will know your app exists. How does Apple's first party software get marketed? Huge banner at the top of the app store along with a huge spiel at WWDC.

Apple's business strategy is to drive down the pricepoint of software to fuel hardware sales. That hardware pricepoint is always maximized at the expense of software. That's why they offer their OS for $20, first party apps for $10, put out Logic for $200 when the market value of their competitors' DAWs is around $500, and have considered abandoning the pro market (with intrinsically expensive, non-mass marketable software). That's also why they never pricedrop their hardware, with industry high margins, until the next generation comes out.

You can't compare Apple first party monetization to a third party dev's. Read this blog post

Awesome post! Well said, and very insightful link. So now we know.

 

[iChrist]

Let's say Apple allowed this. The next day, every App would be free in the MAS, with paid upgrades through the developers website. Do I need to list the ways that would be terrrrrible?

They had no choice but to reject this App.

This is obviously a random thought not based in reality and missing the point entirely. Apple does not even allow upgrade pricing at all, even within the 'MAS' (silly acronym).

Why not allow a dev to charge for upgrading from v1 to v2? What choice does a dev have if they want to use the 'MAS'? Hello?

 

[iChrist]

iOS is a commoditized sw market with an app discovery problem. Commoditization means it's next to impossible to create a brand on this platform. You gotta be lucky like Rovio to create a brand out of thin air. Apple along with other established companies like EA don't have to deal with this - their software is already a brand.

App Discovery problem = unless you get on the top 100 chart or find yourself marketed directly by the app store or WWDC, you're screwed because the store is too crowded, nobody will know your app exists. How does Apple's first party software get marketed? Huge banner at the top of the app store along with a huge spiel at WWDC.

Apple's business strategy is to drive down the pricepoint of software to fuel hardware sales. That hardware pricepoint is always maximized at the expense of software. That's why they offer their OS for $20, first party apps for $10, put out Logic for $200 when the market value of their competitors' DAWs is around $500, and have considered abandoning the pro market (with intrinsically expensive, non-mass marketable software). That's also why they never pricedrop their hardware, with industry high margins, until the next generation comes out.

You can't compare Apple first party monetization to a third party dev's. Read this blog post

Agree with others, this post nails it. Apple offers devs ZERO incentive to remain brand loyal, so the software is becoming the same across iOS/android/win. Also, phones and tablets look the same, a screen with a button. I am interested to see how Apple keeps this business model of theirs, mobile hardware and software commoditization is coming, and fast. Their new plastic phone reeks of capitulation.

 

[John Kotches]

Maybe you'd all have a point, if not for this (quoting myself, here): "The kicker is that every one of Apple's apps is amongst the... Top Grossing apps. In fact, on the Mac App Store, Apple's software accounts for... 8 of the top 10 highest-grossing apps." In other words: each of Apple's budget-priced apps makes more money than each of OmniGroup's premium-priced apps. So, we're not talking about a "loss leader" strategy at all, because there's no loss. Apple's apps are making more money than just about every other app in the App Store.

Now, tell me again how lowering prices is a bad strategy.

Several issues with this post.

1. All apps are not equal. Market for the Omni Group's apps isn't nearly as big as the market for some of Apple's apps.

For example, the market for OmniGraffle is nowhere near the market for a Apple's pages.

2. If the goal is constant revenue, then you have to increase sales by the price differential. Selling the (current) $99 product for $19.99 now? You need to sell 5x as many copies just to break even. But what if the market even at the reduced price for said product isn't going to be 5x as large. See previous point re: market for various products. Maybe it's 3x as large because the price is "more affordable".

Before you lower the price, you should also be sure you have plenty of cash on hand, or a good line of credit for staying afloat. The volume won't instantly double or treble, it takes time for word to get around that the product is more affordable.

3. Apple has a much bigger budget than smaller companies, and they have all of the revenues of everything to help subsidize the development of their software products. Smaller companies have no such luxury. It's a limited suite of products and there's no external source of revenue to prop up a loss leader.

It is Apple's App Store, but why all the righteous indignation that a company publicly questions the policy? Apple's predominant reason for not allowing upgrade pricing via the App Store is simple. They make less money when the price is lower.

----------

Security is a red herring, a favorite meal of the simple minded.

Obviously the real issue is a strange lack of flexibility in the app stores. The example by macrumors is hilarious, the pricing on Final Cut has nothing to do with lack of upgrade pricing. Are they suggesting the upgrade price to the next Final Cut will be $199 for all users? If so, how does it benefit Apple to push this new pricing scheme on others?

Because they collect 30% of the revenue on the sale. Follow the money

 

[gaximus]

And developers don't want to spend months of time adding features to your app without getting paid for it.

I get that Apple is trying to prevent fragmentation where users are running different versions of apps, but I wonder how many developers this is scaring away.

As a developer, I agree. I need to update one of my apps now, but, it's just not profitable enough. So, I should add features to compete with competitors, and I'll get new customers, and reward my old customers.

As a consumer, I don't want to pay for an upgrade that mostly just bug fixes, and a few new features.

So basically I want to get paid for doing more work, but don't want to pay to have work done.

 

[Serelus]

That's the thing, it's a relatively small and easy thing to change. Since all your software is tied to your account, all Apple should have to put in place is a simple check. If MAS sees that have the previous version, then it offers you the upgrade at a discounted price. If you don't, you pay the full amount. Apple provides the setup, the developer sets the price, and Apple in turn gets their 30% cut. It doesn't have to be done from inside the app. The storefront could and should be able to handle it.



Apple doesn't protect you from such companies. They get a nice, tidy cut of the profits from IAPs.

You're completely ignoring the sole consequences I am trying to make my point with.

When developers get the freedom, to price their said "upgrades" the app store will become a desert of apps that get upgraded every 2 to 3 months, forcing people to pay for upgrades.

I already did this but i'll try again, when I downloaded my Plants vs Zombie 2 app all was fine, but EA decided to make this version of PvZ an "Always online" app. So in other words a few weeks later they released an update, one which I didn't get to until I was abroad so I had no access to internet, while abroad I tried opening the app, only to realise that EA had blocked my access entirely, and would only allow me to use the App if I "update". The problem here is that I see developers doing the exact same thing with Paid upgrades in both Paid and Free Apps. This is just screwing over the customer especially when you've already paid for the app. Sure you have your honest developers who're not going to take advantage of such a system... but surely you realise they are not all like that. I meet the most greedy developers all the time, and they annoy the hell out of me.

So no, it's not just a minor "Check" that needs to be added, the entire terms apple has established right now, needs to be altered to a great extent. Then let's hope developers actually listen or don't find a workaround, because then the storm of complaints is going towards who again? Right, Apple.

 

[badsandwich]

Good thing I bought direct from Omni.

----------

By the way, you're confusing Final Cut Pro with Final Cut Studio. Final Cut Studio was $999, and included Motion, Final Cut Pro, Soundtrack Pro, DVD Studio Pro and Compressor.

 

[Switchback666]

Developers should just vote with the fingers , stop dealing with the appstore and continue offering the old fashion way if Apple cant implement a work around/dont allow.

Developers are key, specially regarding iOS ! I cant believe some responses on this thread, they actually turning back a well-known software house because they wanted to grab the bull by the horns....

 

[Ken Case]

When developers get the freedom, to price their said "upgrades" the app store will become a desert of apps that get upgraded every 2 to 3 months, forcing people to pay for upgrades.

We already have that—you've even given us an example of this which is already implemented in the current App Store.

What we're missing is a mechanism for developers to offer customers a discount to an app's initial purchase based on a previous purchase, rather than requiring that they pay full price again. That's what I'd love to see added to the App Store.

 

[Renzatic]

You're completely ignoring the sole consequences I am trying to make my point with.

When developers get the freedom, to price their said "upgrades" the app store will become a desert of apps that get upgraded every 2 to 3 months, forcing people to pay for upgrades.

I already did this but i'll try again, when I downloaded my Plants vs Zombie 2 app all was fine, but EA decided to make this version of PvZ an "Always online" app. So in other words a few weeks later they released an update, one which I didn't get to until I was abroad so I had no access to internet, while abroad I tried opening the app, only to realise that EA had blocked my access entirely, and would only allow me to use the App if I "update". The problem here is that I see developers doing the exact same thing with Paid upgrades in both Paid and Free Apps. This is just screwing over the customer especially when you've already paid for the app. Sure you have your honest developers who're not going to take advantage of such a system... but surely you realise they are not all like that. I meet the most greedy developers all the time, and they annoy the hell out of me.

So no, it's not just a minor "Check" that needs to be added, the entire terms apple has established right now, needs to be altered to a great extent. Then let's hope developers actually listen or don't find a workaround, because then the storm of complaints is going towards who again? Right, Apple.

This hasn't happened yet, and it won't happen now just because Apple suddenly decided to allow upgrade discounts through the app store. Just about every game or application out at the moment is connected to the internet in some shape, form, or fashion, yet you practically never hear about developers locking people out of their software to force them to buy the latest version.

Adobe doesn't do it. People are still happily using CS5 while CS6 sits on store shelves. They're not forcing you to get it, though as a current owner you have the option to get a discounted version if you so choose.

The people who make Pixelmator don't do it. They offer a setup similar to Adobe above, I believe.

Autodesk doesn't nullify any of their old programs whenever the latest version comes out. You don't have to rebuy 3DSMax or Maya ever year, but...yup...they give you a discount if you're a current user of either of those programs.

Microsoft doesn't do it. I don't think they offer discounts on anything beyond Windows upgrades, but people are still using Office 2007 despite 2013 being available.

All developers are asking of Apple is to allow them to give their current users upgrade discounts, same as they always have. People who own older versions of software can still continue to use it and redownload it all they want, but they have the option to get a discount if they want to jump over to the latest and greatest. It's as simple as that. It's no different than what's been going on for the last 20 odd years in the software sector. Just becuase there are app stores around doesn't mean the rules of engagement between developers and customers have changed drastically.

You're arguing the slipper slope, talking about a possible worst case scenario rather than the reality of things. No one will lock people out of their app every other week and force them to buy bug fixes before they can play their games or use their software again. Oh, I'm sure someone will try at some point or another, but all they'd end up doing is piss off their customer base and lose sales after they take a much deserved hit to their reputation.

 

[Lazy]

No, sorry, I'm not sure I understand. The App Store already has support for both paid upgrades and free updates: when a developer releases a new version of an app, they can either submit it to the App Store as a new app (charging full price for it) or submit it as a free update to an existing app.

What I'm advocating for is the option of offering discounts on upgrades, rather than requiring that customers always pay the full price again.

In the world of consumable content which dominates Apple's iTunes Store and App Store—music, videos, and games—upgrade discounts are largely irrelevant. When I buy a movie or play a game, I don't expect to get a discount on any sequels: in fact, the sequel is actually more valuable to me because I was hooked by the original content. (This is why we see some TV series on the App Store make their first episode available for free, why iTunes will feature a free "song of the week," and why so many games offer their initial content for free and charge once you've gotten hooked.)

Since this sort of consumable content dominates Apple's online stores, I haven't been at all surprised that they haven't prioritized adding support for providing upgrade discounts. Instead, they've prioritized features that are useful to those content providers, like buying an entire music album or TV series at once for a discount. (Side note: these sorts of bundled discounts are something we'd also love to see with apps!)

If all apps on the App Store were consumable, that would be the end of the story: the current model works great for that, and its top grossing charts are dominated by apps which succeed under that model.

But the kind of apps we build at Omni are intended to last for decades, not weeks. Most of the value of purchasing a productivity app comes from the initial investment: when I buy a spreadsheet, I can use it to do things I couldn't do as efficiently before. I'm not using the app because it entertains me, I'm using it because the cost of investing in that tool is less than the cost of trying to do that work (or not doing that work) without that tool. Investing in the tool saves me money over time.

So let's say I've invested in that tool, and my investment is paying off—but then a new version of the tool comes out. How much is the new version worth to me? Well, I can already use the older app to do many of the same things as I would do with the new tool, so the value of the upgrade is simply how much better it is than the previous version. I can't justify the cost of making a full investment in the app all over again. I'm buying a tool, not consumable content.

As someone who has already invested in the previous version, what will make investing in the new tool worthwhile will be discounted upgrade pricing based on the relative increase in value of the new version, rather than having to pay for the full value of the app all over again. Otherwise, it may not be worth purchasing.

Excellent points and well-stated. Thanks for posting that.