Why freemium apps suck for everyone (and how Apple is killing paid apps)

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Only one of the top 200 grossing apps is a paid app
Paid apps are an endangered species: Only one of the 200 top-grossing apps on the App Store is a paid download.
Photo: Graham Bower/Cult of Mac

I work on an iPhone app called Reps & Sets as a hobby project in my spare time. This week, my partner and I came to the conclusion that there is no future for our app as a paid download, so we have reluctantly decided to make it free.

This was an incredibly tough call, because we have invested literally thousands of hours in developing our app over the years. Giving all that hard work away for free is heartbreaking. But we didn’t feel we had much choice.

Why no one buys apps anymore

We started developing Reps & Sets in 2010. Back then, in-app purchases were still a relatively new phenomenon. This type of payment mechanism didn’t strike us as being relevant to our app. I realize now that we failed to anticipate just how fundamentally in-app purchases would change the App Store.

Back then, app sales were still booming. But in hindsight, the writing was already on the wall for paid downloads. Today, Minecraft: Pocket Edition is the only paid app in the App Store’s top 200 grossing chart. All the others are “freemium,” generating their revenue by selling items within the app.

You could argue that this is just part of a long-term trend in the software industry, as companies like Microsoft and Adobe have moved from selling shrink-wrapped software with an up-front charge to providing ongoing subscriptions and cloud services.

This move away from paying up front is not limited to software. In the music industry, even Apple has been forced to concede defeat. Steve Jobs once shunned subscription services such as Spotify, arguing that “people want to own their music.” With the launch of Apple Music, however, Cupertino made a U-turn and jumped on the subscription bandwagon. Rumors indicate Apple might even ditch the iTunes Music Store altogether, which would have been an unthinkable move just five years ago.

If you can’t beat them, join them

We're hoping our watch app will tempt some users to subscribe
We’re hoping our new Apple Watch app will tempt some of our users to become subscribers and help fund ongoing development.
Photo: Repsio Ltd

Apple’s Music strategy is effectively “if you cant beat ’em, join ’em.” And in our own humble way, that is exactly what we have decided to do with Reps & Sets.

This week we made all the existing features of our app free. Instead we will be selling an in-app subscription, which provides access to all the new features we add moving forward, starting with our Apple Watch app. This way, all of our current users, who bought the app, can continue to access the features they paid for without incurring any extra cost. Hopefully the Apple Watch app will tempt some into subscribing, and maybe new users will discover the app now that it is free.

Time will tell if this business model works for us. Since our app is just a hobby project we do in our spare time for fun, we don’t expect it to earn us a fortune (although of course that would be nice). But we would at least like to see it wash its face.

I wish it hadn’t come to this: Why freemium sucks

The reason we held out for so long against the switch from paid to freemium is because, honestly, we think it sucks.

Last year I wrote a manifesto for classy app developers. I argued that app pricing should be clear and easy for the user to understand. Frankly, most freemium apps are anything but.

Take Pokémon Go for example. There is no way I would have downloaded this “free” app had I known that it would end up costing me over $40. Yes, I realize that I’m a grown adult and it is entirely up to me how much I choose to splurge on cute pocket-size creatures.

But my lack of impulse control aside, the fact remains that, like most freemium software, the total cost of ownership for the game is unclear at the start. When you download it, you really have no way of knowing how much storage, incense, lucky eggs and lures you will need to purchase.

To be fair, Pokémon Go is far from unique in this respect. In fact, these days this is pretty much the norm, which means I now avoid the temptation of “free” games like Madden NFL Mobile because I have absolutely no idea how much they are really going to cost me. Suddenly the price of the console version looks like a bargain.

Like Steve Jobs said about music, I believe that people want to own their apps. That way you know what the total cost will be. And, once purchased, you can be sure you get full access to everything you need with no surprise extra costs.

Apple could have saved paid apps

What I find most frustrating is that it did not have to be this way. It’s true that Apple had little option but to offer in-app purchases. The switch to services was, after all, the direction in which the whole industry was heading. But there is still a great deal Apple could have done to promote paid apps on the App Store.

The first big problem paid-app developers have is that Apple provides no way to offer a free trial. Prospective buyers just get to see a 30-second video, five static screengrabs and some plain-text blurb. That is not much on which to base a purchasing decision.

Apple also does not allow developers to offer free “demo” versions on the App Store. Cupertino requires all apps to be useful in their own right. Some developers attempt to get around this by offering feature-limited “lite” versions. But attempting to get the user to switch from one app to another is not easy, especially if the lite version sufficiently meets their needs.

For years, developers like us have been hoping Apple would provide a way to offer a free one-month trial. Now it looks like that would be too little too late, since the market for paid apps is all but dead anyway.

Things are very different for in-app subscriptions, where Apple makes it easy for developers to offer a one-month free trial. No wonder so many developers are switching to this model.

Pay once, then ride for free

Another problem for paid-app developers is that Apple does not allow developers to charge for updates. This means that users who purchased our app five years ago for the princely sum of $1.99 receive all our hard work on subsequent updates at absolutely no extra cost. So in reality, new versions of the app were effectively free for them already.

Once again, some developers attempted to get around this by releasing major updates of their app as new apps entirely. But this is not an elegant solution. Unless you are willing to cold-bloodedly end support for owners of previous versions, you end up with multiple versions of your app available on the App Store, which is a marketing nightmare.

App development is not a simple matter of building an app, then sitting back and raking in the money. It requires continuous ongoing development to maintain compatibility with new hardware and new versions of iOS. Since we launched the app, we’ve had to add support for numerous big changes, including: iOS 7’s redesign, Retina displays, larger screen sizes, HealthKit, Today widgets, Apple Watch, interactive Notifications and iCloud Drive. The list is endless.

Users rightly expect support for all the latest Apple features. But this doesn’t happen by magic. Apple frequently claims at its annual Worldwide Developers Conference that supporting new features is super-simple for developers, which often gives users unrealistic expectations.

The reality for developers tends to be quite different. Any app that has been around a few years, like ours, has built up “technology debt,” which means it relies on older APIs and functions. A small developer can’t afford a full rewrite every time there’s a major shift, like from Objective-C to Swift, Auto Layout constraints, etc. These things take time.

As Benjamin Franklin famously said, time is money. Without the ability to charge users for updates, app development quickly becomes financially unsustainable.

Apple does not owe us a living

You might say that if we can’t make a living out of our app, that’s our problem. And of course you are right. Apple does not owe us, or indeed any developer, a living. And it is entirely up to Cupertino how it chooses to steer the App Store.

But when free becomes the norm, what really suffers is diversity. I believe that is ultimately bad for users as well as developers.

Apple likes to crow about the millions of apps available on the App Store. But I wonder just how many of them remain actively developed. Even John Gruber recently called it a day with his Vesper app. And if someone that high profile struggled to market a paid app, what hope is there for the rest of us?

Only mega-corps like Google and Facebook can really afford to give away apps. And that is rarely where innovation comes from. Just look at how Instagram, iMessages and SnapChat busily copy each others’ features.

Without the continued contributions of indie developers, the App Store becomes a much more dry and sterile place. If they can’t make money selling apps, that is bad news for everyone.

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  • funcritter

    I refuse to use an app if it has in app purchases. If it’s free, fine if not I don’t want it unless I can but it at the time of download. I also don’t care if they decide to load it with ads because I block ads in apps on my iOS and Android devices.

    Let me buy the app and dump the in app purchases.

    • NoneOfYourBusiness

      Would you agree to buy a car without a test-drive?

  • NoneOfYourBusiness

    But that doesn’t make any sense to complain about Free + IAP. Let me explain this from a customer point of view. Say, I’m not very happy with a standard camera app on iPhone, I want to have manual controls and other great features. So, I go on App Store. What should I do, buy each app out there to see which I like? What I, as a customer, want is to try before buy. Free + IAP gives this opportunity even if not fully fledged (not all features could be tried). Some developers wisely choose Free and Paid feature sets, others are less thoughtful. We live in a world of crazy competition, obviously as a customer I want to have the best at minimum available price. I personally have no problems to pay for apps or even updates, but I definitely don’t want to have 100s of purchased apps thrown to trash (I can spend those money on something else). Also, lately it became quite dangerous to trust reviews on big Apple related sites. Most of them just repost the same review for years, don’t have time even to update app version they review. Finding a new app, well forget about it. Apple’s team is also doing poor job time to time, putting in top sections total garbage. So, yes, as a customer I’m in favour of Free+IAP model

  • Deplorable Lance Corvette

    No free trial period. Bingo.

    Add that to the list of things going downhill with APL since Jobs left (I know, it started before, but App developers could have spoken up about it).

    • Storm

      I agree that the lack of a free trial period is a problem, but I’m confused by your second paragraph: are you saying this is Steve Jobs’s fault, Tim Cook’s fault or app developers’ fault?

  • Linton Findlay

    The worst apps that are Paid AND have IAP. Like the ‘free’ app of the week, is sonic, but is riddled with ads. If I pay for an experience I want the full experience. Too many apps have a premium features that are locked behind IAPs, which the descriptions don’t make clear. Not to mention premium apps that are ditching the price for a subscription model- EG 1Password

  • Yarrenbool

    My biggest complaint with IAP is that most times it is not clearly, fully, and unambiguously stated what extras or advantages the IAP will provide. Full IAP information should be provided up front in the AppStore’s description!

  • Future Burrito

    I take issue with apps that charge upfront and then add ads down the road. When that happens, I request a refund from Apple and I stop using the app altogether. Same thing if they move to a subscription model.

  • Future Burrito

    This trend is unfortunate. I stay withe iOS because 3 pillars:

    – The premium build of the iPhone
    – Reliable and innovative software updates
    – High-quality apps

    I don’t consider their updates reliable (anymore) and innovativation is few and far between. I don’t consider any subscription based apps (outside of VPNs, videos services, etc) or ad infested apps high quality.

    I wouldn’t move to android because that platform has the same problems, but I would stop updating my iPhone software and hardware.

  • mctrials23

    The reason iaps are prevalent is party due to developer greed and party because of customer sense of entitlement. The huge huge majority of people I know simply will not pay for apps. This is going back years. They can’t explain why they are unwilling to pay 99p for an app they use every day. Lots of people take it as a point of pride as well. They will go and spend £3 on a coffee but won’t spend £1 on an app.

    Developers have realised that you can make lots of money from IAPs when you hit those willing to spend. The people that wouldn’t buy your app for an up front cost probably won’t use IAPs and some people that don’t mind spending on their apps will end up spending much more than they ever would have via a single up front purchase.

    • NoneOfYourBusiness

      “The people that wouldn’t buy your app for an up front cost probably won’t use IAPs”

      Not true. Speaking from my our experience. Some people just want to try something before they buy. There are too many scam/bad apps out there to waste your money on all of them. Rating/reviews don’t help since easily manipulated by developers, despite all effort Apple puts to eliminate this type of scam.

      • mctrials23

        Thats why I said probably. In my experience people generally fall into two camps. Those that will pay for apps and those that won’t. I will only pay for apps after I am happy they do what I need them to. A 10 minute google will usually tell you that. I have bought very few apps that are a waste of money and even those I don’t use much have only cost me a few quid.

        Writing software is so far removed from what most people do in their jobs that there seems to be an idea that its easy to do. I have heard a lot of people say “I’ve had a good idea for an app and I’ll build it in my spare time” when they have no programming experience.

        We also get a massive amount of our most useful software for free. All the google services like gmail, maps etc.

        I program for a living and I am always astounded that people who do simple jobs that you could learn in a few weeks consider their work more worthy of spending money on than software.

    • Amy Poeler

      It’s demand and supply. If someone sold a coffee for $1 then the $3 coffee shop will go out of business.

      • mctrials23

        That wasn’t really my point. I’m saying that a lot of people are unwilling to pay for software whereas they are happy to spend far more on things like a chocolate bar, a coffee or a t-shirt they never wear.

  • Storm

    “There is no way I would have downloaded this “free” app had I known that it would end up costing me over $40”

    This makes no sense. Surely, as a “grown adult”, once you realise that it *will* cost you over $40, you just delete the app without spending anything. No one is forcing you to make in-app purchases.

  • BP

    I hate most free apps especially games. For my 6 year old I go out of my way to find ones that are paid only so she doesn’t click on advertisements or there are levels that are locked. Free apps seems so spammy. People are just so damn cheap it’s ridiculous hence why so many free and ad ridden apps.

  • DiamondDNice

    i never pay for an in app purchase and never will. all but about two apps i’ve ever had are free. i paid for a music app because apple’s music app is horrible

    • NoneOfYourBusiness

      What’s the difference paying all upfront or paying later for the same using IAP?

    • There’s a reason most if not all of Apple’s stock apps are complete crap. Do you think that they know that? Of course they do. If they stocked a decent calendar app, who would go out and spend money on Calendars 5 by Readdle or some other such app? This makes Apple more $$$. This thought occurred to me quite awhile back, and the same attitude persists throughout every segment of Apple’s ecosystem, and why not.. they’re there to make shareholders money, and nothing else.

  • Grayson

    I think a better solution might have been to keep your current app as is with an up front price and continue to add features for people who bought that app, but create a second App Store entry for the freemium model. That’s what PCalc does. There is a $10 PCalc app that gets you all of the features and has no in app purchases, and there is also a free PCalc Lite that has in app purchases for each feature and can actually get all of the features of the normal PCalc app if you buy all of the in app purchases. That two app model satisfies both the users who prefer to pay once and get everything currently available and in the future, and it satisfies the people who want to dip their toes in for free at first and maybe pay to add features later.

  • rmckie713

    It annoys me that they say the apps are free only to find their are in app purchases.

  • M S i N Lund

    Apps suck, period.

    Why would i want to install special client-applications like its the 1900’s?

    I have a browser, now give me the URL to your stuff, or F off!