The Idea Dude


Monday, January 25, 2010

99c apps are not 99c songs

Somehow, somewhere down the line, we were hoodwinked into thinking 99c was the ultimate price for everything. Apple got us so used to buying songs for 99c they figured it was just a natural progression to buy apps for 99c. Given the amount of apps that have been sold, they were correct. Today over 53% of all 138,000 apps in the iTunes Appstore cost 99c. In fact only 77 of them cost more than $100.

It was a great marketing move but perhaps not so great for the small developers. The problem with 99c is that to make money you need volume. If you knew how steep the long tail curve is in the AppStore, you'll realize that the percentage of people actually making a decent living from iPhone apps is in the single digits. Given there are probably 30,000 or more developers out there, starving is the word of the day.

What continues to baffle me is to see high quality apps next to some pretty crappy ones for exactly the same price... 99c. Having developed around 29 of our apps, we know what it takes to write a good one, the effort is in the weeks if not months.

Here's why 99c apps are not 99c songs. Songs, (especially the popular artists) have the backing of some pretty large music companies who have invested thousands into each artist. The studio time, producers, promoters etc. They generally have well-oiled and well-funded marketing machines that put the faces of their artists in supermarkets, TV. There are established distribution channels, i.e. radio stations that play the songs over and over again until you end up buying. The appstore has none of these advantages unless you're an EA or already have a large brand and online/offline presence. i.e. if you're a standalone developer, the future looks bleak, better buy a lottery ticket.

At the end of the day, there are some pretty good apps languishing at the bottom of the pile. You spend months working on your masterpiece only to get swamped by 60+ apps on the same day you launched. Talk about drowning in noise. To say the good will float to the top is not correct, that is only true if there is steady state and the cream is given a chance to rise. Keep stirring the pot vigorously, nothing rises but just a whole lot of churning.

Even in the music world, only a handful of artists get valuable airtime and make a whole bunch of money. The rest are hopefuls and has-beens.

The key is not to try and create apps that sell a million, that's a nice to have. But to create apps that address a niche, a demographic who are passionate about a topic like you are and are prepared to pay 4.99 or 9.99. That is the business.

At the end of the day 99c apps are not 99c songs. Right now the appstore is akin to every American Idol hopeful, recording a song on their iPhone and posting it to iTunes for 99c. (The recent auditions in Chicago yielded 13 finalists from 12,000). If they don't let that happen on iTunes, why should it happen in the Appstore?


Blogger Asher said...

Its all about style and choice. Many apps do the same thing, but many people desire change. They will abandon apps that function well for something new.

Also release management can hold back features and release them on a frequent schedule requiring 99c each time.

7:33 PM  

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