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Issue #72: About the app subscription model

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Hi!

How are you doing? Are you sitting there, muttering over yet another app that goes from a premium business model, to a freemium one? Quite a few clearly did the other week, when Notability changed their business model, essentially forcing all its serious users to sign up for a subscription. They reversed this decision, grandfathering their current users into a reasonable free tier unavailable for new users, but the harm was, for some, clearly done.

So, let’s talk a bit about subscriptions as a business model, shall we?

There are several potential business models for apps today. Some of the more obvious ones are:

  1. Charge a one-time fee for the app.
  2. Offer the app for free and use ads within the app to earn money.
  3. The app’s free, but additional content is available as one-time in-app purchases.
  4. A variation of (3) above: Use timers, gems, and other kinds of in-app currency to limit usage, then sell this in-app currency to the hardcore users via in-app purchases.
  5. Offer the app for free, but either limit it, or make it unavailable after a free trial, unless the user signs up for a subscription.

Notability, mentioned previously, went from model 1, to model 5. This annoys people that paid a premium price for the app, possibly several times if they want the app on different platforms.

I get that. It’s annoying when you thought you bought something, with implied ongoing support, and then it gets replaced by a subscription. What you paid for doesn’t necessarily disappear, it just won’t get any more updates. As a user and customer that sucks, especially if you ponied up somewhat recently.

Now, I also get why a developer like Notability, with a long track-record of maintaining and developing its app, want to switch to a subscription model. It all boils down to knowing what to expect in terms of earning, and getting paid for usage over time.

Think about it: If you buy an app for $5, and use it for three years, then the developer got $5 from you. During that time, you get new features, bug fixes, and possibly support. Is $5 a reasonable price to pay for an app you use, over a three-year period?

Of course, it isn’t. It’s peanuts. The app developer would have to sell a lot of apps, and find a lot of new customers, every month to make things work.

Now, what if you paid $1/month instead? That means that the developer gets $1/month for as long as you feel it’s reasonable. Those three years goes from $5, to $36. Still not a lot of money, perhaps, but it’s 720% more than that one-time purchase.

Which model do you think has the better chance of being both sustainable from a business perspective, and offer a quality app to the consumers?

It’s no surprise that app developers want you to pay more, and pay frequently, using subscriptions. I currently subscribe to the following apps (I might’ve missed something), not counting services, within the Apple ecosystem, in no particular order:

  • Flexibits Premium (for Fantastical)
  • Pocket Premium
  • Canva Pro
  • Ulysses
  • CARROT Premium
  • Todoist Pro

All my plans are yearly whenever possible. It’s a lot of money, but those are some pretty great apps. I don’t mind supporting them because I know I’m helping to keep them alive. Incidentally, all these apps are ones I use daily. The only one that might get thrown out, is Pocket, as discussed in the read it later issue.

Subscription as a business model sometimes make more sense for the app developer, than it does for its users. I don’t think all apps should go this route, but it does make a lot of sense for apps that require constant updates and development. It makes less sense for something that’s static after launch, not counting potential bug fixes.

Personally, I prefer to pay once for an app, and then pay again when the app gets a big upgrade. The app goes from 1.0 to 2.0, so to speak, and then I can decide if I want to pay again when it’s time for 3.0. Unfortunately, the App Store is poorly tailored to this model. Subscriptions are the solution, but it’s a solution tailored for businesses, including Apple in this case, and less so for the consumer. Subscription fatigue is definitely a thing, I cancel and sign up for things all the time, and it’s mostly annoying.

But I do get it, why app developers go down that route, and I wouldn’t yell at them for doing so. It’s hard enough as it is, charging a premium on the App Store, so the next time someone goes the Notability route, give them the benefit of a doubt, okay?


😥 This letter was a day late. It’s been a tough week, and I just couldn’t get it out yesterday. I apologize for this. Thanks for understanding!

— Thord D. Hedengren ⚡


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