Every year Apple organizes WWDC, its annual conference for developers. The event serves two main purposes: 1)Apple introduces developers to all the new features associated with the latest operating systems and 2) Developers discover new ways to use those systems to promote the Apple brand and establish new business opportunities. Combined, their efforts help to enhance the consumer experience.
iOS 11 and the New App Store
This year during WWDC, Apple introduced iOS 11, including a brand new redesign of the App Store. After reviewing the beta version, I was impressed by the way Apple chose to promote featured apps, while improving navigation (Games are now a main menu tab along the bottom). It’s nice to see Apple put forth a concerted effort to promote developers, but there is a rising development that warrants some concerns for consumers: the rising costs of app purchases in the form of the subscription model.
As a long time consumer of the App Store and someone who has spent the last eight years reviewing apps for iOS and the Mac, I have become quite familiar with the range of prices that are available for apps and how divergent they can be relative to the services they provide. For example, one developer may sell a photo editor that highlights one feature (e.g. erasing backgrounds) while another developer will offer the same feature, plus 20 additional features at the same price. In other instances, developers will offer their apps for free (as a test run) but as soon as you access a feature (apply a filter to a photo), you are prompted to make in-app purchases for $1.99. This process may continue ad nauseam.
Deceptive in-App purchases are defined by Apple as “consumable” purchases or one-time purchases. These types of purchases are introduced as IAPs that require you to reach higher levels of achievement and satisfaction (an addiction model that is popular in games). Non-consumable in-App purchases occur in the form of pro versions - upgrades to “pro” provide access to additional features, remove ads, etc. In the early history of the App Store, developers adopted a strategy to lower App prices in order to increase sales (what some have called “a race to the bottom”). Contrary to this approach, developers today are engaged in “a race to the top,” an approach more popularly known as the “subscription model.”
The Dangers of the Subscription Model
The subscription model is less insidious than hidden in-App purchases, but nonetheless a burden to the consumer with exorbitant costs. Subscription models place an emphasis on “services” rather than “products.” Similar to Apple Music or iCloud Drive, subscriptions may be offered as weekly, monthly, or yearly subscriptions. Once the service ends, your experience ends as well. The services model is unavoidable in today’s tech economy, but once it becomes ubiquitous (as in the case of app purchases) the financial burden to the consumer becomes a dangerous proposition.
The “race to the bottom” approach to enticing consumers was more balanced and acceptable because it gave developers wider exposure, while giving consumers more options. If consumers became unhappy or dissatisfied with an app, they could try another app without incurring much of a financial lost. The subscription model includes much higher costs (e.g. a consumer may pay $9.99 for a monthly subscription fee, compared to $3.99 to purchase a pro version of an app with all the features). The difference in price can be astronomical.
The subscription model started out as an exception rather the rule, but current trends suggest that this will become the norm. Up until this point, the exceptions have included high-end products by Adobe, Microsoft (and Apple) whose dependence on cloud-based services have become the premiere way to access applications, and hence the services they provide. Today, developers, large and small, prominent or obscure, are more apt to offer subscription models.
There are many examples of this phenomena, including the rising popularity of adult coloring book apps. If you search Apple’s App Store, you will find between 50 and 75 apps devoted exclusively to digital coloring books (see my list below). What is most notable is that a large percentage of these apps require subscription fees. The fees range from $3.99 a week and $7.99 a month to $59.99 and $99.99 a year.
For example, Pigment by Pixite LLC offers a service charge of $7.99 a month or $39.99 a year and Recolor by Sumoing Ltd charges a service fee of $9.99 a month to $59.99 a year.
Prior to the age of the subscription model, an app with the same features would cost the consumer $3.99 to $6.99 to own everything outright. This model was reasonable because of the abundance of apps available to the consumer. In contrast, the consumer pays the same amount every month, and the consumer is only able to “rent” the app for services rendered without ever “owning” the app. When seen in this light, the subscription model can be viewed as “obscene,” to say the least.
Unfortunately for the consumer, the subscription model is becoming the "new normal." Recently, the developers who gave us the wonderful photo editor “Enlight,” which can be purchased for $3.99, introduced a new app called “Enlight Photofox.” Photofox offers two subscription models, $3.99 a month or $19.99 a year. These prices are cheaper than what the adult coloring books are charging, but it’s still 5 times or 12 times the amount paid to own the original Enlight app outright. Photofox, however, can be owned for the one-time price of $39.99, which is still a lot higher than $3.99.
What Lies Ahead
The Dangers of the Subscription Model raises several important questions. Is the subscription model sustainable in a market where there are so many apps to choose from? Will this model ultimately place a limit on what consumers can experience? Will this model unfairly impact the consumer’s wallet, especially in a world where the disparity of wealth increases by the year?
Date: July 22, 2017
Author: Timothy Brown, Senior Editor, My Apple Podcast
COLORING BOOK APPS FOR IOS
Host of My Apple Podcast.