Look, we all like getting things for free. That’s why we can stomach things like advertisements and optional purchases in freemium apps and games — we’re willing to pay for our mobile experiences in every way but currency. Although freemium seems to be the model for the future of iPhone entertainment, it looks like a different scheme might win out in the end.
We’re talking, of course, about subscriptions. I know — there are too many subscriptions out there already. Netflix, Hulu, HBO, Adobe products, etc. While mostly contained to TV and movie companies, subscriptions really are everywhere, and cover not only entertainment and news but also productivity services as well.
Because of the increasing list of subscriptions we see entering the marketplace, you might think it best to fight for freemium apps even more. After all, if you’re going to have to pay for multiple subscriptions to watch your shows, you should feel safe knowing your games and fun apps will always be available for free if you don’t want to pay for them. And that could have been the future for the App Store, if not for one snag — Apple.
Cupertino hasn’t exactly been hands-off when it comes to its views on subscriptions. According to Business Insider, Apple hosted a private event for app developers in April of 2017, pushing them towards subscription-based payments over other forms.
Developers, Apple said, needed to realize the business model of apps was changing. Successful apps tended to focus on long-term engagement instead of upfront cost. Indie developers who wanted to capitalize on this needed to move to a subscription model, as Apple had made possible in the past year in a splashy announcement.
The logic is sound. Freemium apps require a small percentage of users to make in-app purchases in order to be profitable — subscriptions involve all users paying for the product. Even if a subscription model doesn’t attract the numbers that freemium apps can, get enough people on the cycle, and you could end up making more.
A subscription model is also potentially better for the consumer than freemium or one-time purchase. With the latter, especially a one-time buy-in, there isn’t a large incentive to keep improving the app. The company already has all the money it can get from you, so why work to keep you there when it can simply focus on getting new users? Even freemium apps have a bit of this issue, as well, as only a small fraction of users are really funding the entire operation. Most users aren’t paying a thing, so unless the company will really be hurt by the lack of ad revenue, a missing user isn’t the end of the world.
With subscriptions, however, companies need to figure out ways to keep users on their service. Whether that be a media platform, a game, or a productivity app, a subscription forces developers to make the experience worth a user’s while. Otherwise, users might jump ship to another option, cutting off a revenue stream for the company.
Maybe the biggest players are immune to this — HBO NOW doesn’t necessarily need to be good as long as you get to watch Game of Thrones on your iPhone — but, as Business Insider points out above, indie developers are the ones who really stand to benefit from switching to subscription-based models, so long as they continue to provide a service that users want to subscribe to.
Don’t be surprised if some of your favorite apps begin to offer subscriptions out of the blue. It might cost you more money than before, but those favorite apps of yours might not be around very long without it.
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