Myke Hurley’s Paying The Price On Android:
Whilst watching a recent episode of All About Android on the TWiT Podcast network, I noticed that as one of the hosts was demoing Plume – a twitter client for his Android tablet – he said that he was using the free version of the app, even though it had ads and that he might upgrade to the paid version as he uses the app a lot.
This isn’t limited to Android — I saw this “plan to buy”/”might buy sometime” sentiment all the time with Instapaper Free for iPhone.1
These users almost never upgraded.
It’s a very common user mindset: they tolerate a lot of limitations, ads, and nags to avoid paying. It’s not that they’re cheap, per se: they just really don’t believe that apps are worth paying for, and they feel cheated or defeated if they end up needing to pay for one.2
It’s not worth trying to appeal to them with a paid app. In most cases, the conversion rate will be so poor that it’s not worth the cost of maintaining two apps and supporting the free users.
App developers can either ignore them as a market — and it’s a big market — or find other ways to pay for their use.
Mobile ads pay very poorly. In my case, ads didn’t even come close to delivering similar value as the $4.99 paid-app sale — I was lucky to get even $1 of value out of an Instapaper Free user. What I’ve heard from other developers and other ad networks suggests that this is pretty close to the industry average.
I decided to yield the free market to my competitors and discontinue Instapaper Free over a year ago, and my sales have remained healthy. (In fact, they’ve increased, but it’s difficult to know whether that was the cause.)
While I’m losing a tiny fraction of sales from people who really would have upgraded from Free to the paid app, I’m also gaining sales from people who would have chosen Free but instead just grumble and accept that they need to pay because there’s no other choice. So far, it appears that I’m coming out ahead financially while reaping huge rewards in simplicity, development, customer satisfaction, and server costs.
This definitely isn’t an Android problem: it’s a user problem. Maybe a significantly larger percentage of Android users insist on free apps than iOS users (it certainly seems that way). But both platforms have much larger demand for free apps than paid apps.
There’s nothing anyone can do about it. Developers just need to decide whether, and how, to address the demand for free software and services without going out of business.