Well duh, they're underpriced. Given the time to develop, even at minimum wage, the vast majority probably never even get close to matching their costs. Unless you include a bajillion which were made to solve problem X for user & programmer Z, and they'd like something when they may have released it for free. And the app store makes that a brainlessly simple choice.
$1 is well below the impulse-buy threshold, and $1 might as well be free for most people. But the difference on the developer's side is that they get something, instead of nothing. $1 compared to a $0 app means a single sale is an infinite (fine, undefined) increase in income, which totally eclipses the chart's 11% net income increase from a %1 increase in price.
From another angle: what if your favorite free software cost $1 instead? Would you still use it? How about you donate that $1 to the developer directly? You'd be in the extreme minority of any who donated, I guarantee it, and if they had charged $1 they'd probably get several times the income from that freeware in a year than from all their donations.
To make matters worse for app-store developers, people are arguably even less likely to donate when downloading from the app store, because it's not built-in.
It took effort to create our _free_ app. We originally believed that having a highly branded app would outweigh the costs of development. One issue we're facing is negative reviews. Out of the thousands of downloads, we've had 25 one star reviews. The people who enjoy our app just aren't prompted to give us a review. We're down to two options.
1. nag/prompt the satisfied users for a review inside app
2. price it $4.99
What are the negative comments? Could it be that your app needs improvement? Maybe it doesn't offer enough value to justify the "heavy branding"?
Without seeing your product, consider option 3- try to improve your software.
EDIT: Downloaded, and I really like it. I've downloaded a ton of apps that were clearly made because "we need an iPhone app with our logo on it", so I had no clue what to expect. Sorry for the uninformed critique :)
comment noted. we're developing the next version, as well as a more feature rich iPad version. it's a bank finding app. when you're out somewhere and need to find the closest bank to you, you're extremely happy that this app exists.
we think it's the bees knees. but, try it and let me know what you think.
This is a real deficiency in any rating system. A one-star review (or a five-star review, either end of the bell curve) should require a short review as to precisely why the user thought the app was so terrible (or so outstanding).
These "reviews" are clearly from people who removed the app and were prompted to rate it by the iPhone OS.
This system really doesn't make sense (you wouldn't remove a great app) and might need to be removed from the OS, or revised.
The OS could for example, prompt the user the nth time an app is launched. But that would probably be annoying.
Or Apple could send an email every now and then to invite users to rate all their apps (or the recently bought) with an easy to use interface, where they can just rate by number of stars (à la Netflix) and possibly add a comment.
That's one of the problems with review sites. They're typically artificially-deflated, because unhappy people are the most vocal people (especially on the internet). There are also loads of people who give poor votes because they couldn't figure out how to pay by credit card, or gave the wrong shipping address, etc etc, when it's unrelated to what's being sold. Amazon reviews are a prime example.
IRL, complaining that much would annoy everyone. On The Internets, you just ignore them. It does create a hairy situation for producers, though.
Ha. Yes. We run a bank review site as part of the same brand. It shouldn't have been a surprise to us, but seeing how angry people can get about their banks is still shocking. They sound like crazy people. Here is a more recent bank review title we've had to pull:
I really like how you use the bank icon as part of the MKAnnotation you place on the map. It's a really nice visual tweak.
Only four reviews.
Sadly, I think the majority of low star reviews do not have an actual text review associated with the rating because it's so easy to knee-jerk dismiss the on-uninstall dialog with a low rating.
Perhaps it would be helpful if Apple forced a radio button dialog - why this 1 star rating (e.g. list a few choices - crashes, doesn't run, etc.)
Have you tried correlating your 1-star ratings with the crash reports on iTunes Connect? This is assuming the rating has a date (which it sadly may not).
Downloading it now to check it out/do some testing.
I agree with the conclusion, but there's a little bit of disconnect between the that and the evidence the author's citing. The economics statistics are all regarding a 1% increase in price. The astute may notice that the difference in price between a $0.99 app and a $1.99 app is slightly greater than 1%.
The point behind the studies he cited was that an otherwise unnoticeable increase in price helped the bottom line. Those studies have nothing at all to do with app store pricing, which doesn't give you the option of even having a 1% increase in price.
The top grossing category section of the argument was much more convincing.
Well free apps are never going to make any money. That’s obvious, right? You wouldn’t think so with some people.
Wrong! Free apps can definitely make money-- just not through software sales. Free apps need to be monetized some other way, and in many cases, this is a much smarter way to go.
A friend of mine released an Android app for free on the Android Market (we're in Canada), and he has made virtually nothing on advertising.
The model available to him was limited to clicks and not impressions, so while he has had tens of thousands of impressions and a decently large number of active users, he receives a very tiny number of clicks and therefore makes a profit that is less than negligible.
One of the apps I released on the other hand (on another store), has cost a variety of prices between 1.99 and 2.99, and I've made a few hundred dollars in sales.
Think about it this way: he makes around $5 CDN a week in advertising for his free application which took him weeks to develop, whereas my app nets me around $1.90 USD per sale and it took me about one full day's work.
I've kind of rambled on at this point, but basically what I'm saying is this: I need to sell less than three copies a week to top his profit, and I'm running on a store that has significantly less traffic than the Android Market and selling my app, not giving it away.
Virtual good sales have made good money from free and $.99 apps. I'm drawing a blank on the game, but even people who pirated one iPhone game still bought virtual goods in-game.
14 comments
[ 3.4 ms ] story [ 31.6 ms ] thread$1 is well below the impulse-buy threshold, and $1 might as well be free for most people. But the difference on the developer's side is that they get something, instead of nothing. $1 compared to a $0 app means a single sale is an infinite (fine, undefined) increase in income, which totally eclipses the chart's 11% net income increase from a %1 increase in price.
From another angle: what if your favorite free software cost $1 instead? Would you still use it? How about you donate that $1 to the developer directly? You'd be in the extreme minority of any who donated, I guarantee it, and if they had charged $1 they'd probably get several times the income from that freeware in a year than from all their donations.
To make matters worse for app-store developers, people are arguably even less likely to donate when downloading from the app store, because it's not built-in.
Without seeing your product, consider option 3- try to improve your software.
EDIT: Downloaded, and I really like it. I've downloaded a ton of apps that were clearly made because "we need an iPhone app with our logo on it", so I had no clue what to expect. Sorry for the uninformed critique :)
we think it's the bees knees. but, try it and let me know what you think.
This system really doesn't make sense (you wouldn't remove a great app) and might need to be removed from the OS, or revised.
The OS could for example, prompt the user the nth time an app is launched. But that would probably be annoying.
Or Apple could send an email every now and then to invite users to rate all their apps (or the recently bought) with an easy to use interface, where they can just rate by number of stars (à la Netflix) and possibly add a comment.
IRL, complaining that much would annoy everyone. On The Internets, you just ignore them. It does create a hairy situation for producers, though.
Only four reviews.
Sadly, I think the majority of low star reviews do not have an actual text review associated with the rating because it's so easy to knee-jerk dismiss the on-uninstall dialog with a low rating.
Perhaps it would be helpful if Apple forced a radio button dialog - why this 1 star rating (e.g. list a few choices - crashes, doesn't run, etc.)
Have you tried correlating your 1-star ratings with the crash reports on iTunes Connect? This is assuming the rating has a date (which it sadly may not).
Downloading it now to check it out/do some testing.
The point behind the studies he cited was that an otherwise unnoticeable increase in price helped the bottom line. Those studies have nothing at all to do with app store pricing, which doesn't give you the option of even having a 1% increase in price.
The top grossing category section of the argument was much more convincing.
Wrong! Free apps can definitely make money-- just not through software sales. Free apps need to be monetized some other way, and in many cases, this is a much smarter way to go.
The model available to him was limited to clicks and not impressions, so while he has had tens of thousands of impressions and a decently large number of active users, he receives a very tiny number of clicks and therefore makes a profit that is less than negligible.
One of the apps I released on the other hand (on another store), has cost a variety of prices between 1.99 and 2.99, and I've made a few hundred dollars in sales.
Think about it this way: he makes around $5 CDN a week in advertising for his free application which took him weeks to develop, whereas my app nets me around $1.90 USD per sale and it took me about one full day's work.
I've kind of rambled on at this point, but basically what I'm saying is this: I need to sell less than three copies a week to top his profit, and I'm running on a store that has significantly less traffic than the Android Market and selling my app, not giving it away.