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Underscore Price Dynamics

Every iOS developer needs to listen to _DavidSmith’s most recent podcast episode, Real World Price Dynamics with Lauren Smith (it’s just 22 minutes).

Lauren is just one anecdotal data point, but you would not believe how many people I’ve met over the last few years who have said the exact same things to me. This is definitely the majority opinion:

I’ve gone back and forth on what Overcast’s business model should be. I’m definitely charging customers directly (rather than venture-capital or ads), but I’m still debating where, how, and for what.

I’m sure of one thing, though: the market for paid-up-front apps appealing to mass consumers is gone. If you have paid apps in the store, you’ve probably seen the writing on the wall for a while.

That model made sense when there were fewer apps available, but now that there are plenty of free and good-enough versions of almost anything, it’s a different game. Apps targeting niche markets can still find enough paying customers to stay alive if they’re much better than any free alternatives, but the number of apps in that situation is always shrinking.

I’m going to have a hard time justifying an up-front purchase for Overcast — that’s the fastest way to ensure that nobody outside of our upscale-geek world ever uses it. (Quick quiz: What would you guess is the most popular podcast app on iOS besides Apple’s? Check the footnote for the answer:2)

This is the real reason why Apple doesn’t care about upgrade pricing: there’s no demand from customers. The market has shown that free apps will be downloaded at least an order of magnitude more than paid-up-front apps, and smart use of in-app purchase in a free app is likely to make more money. Over time, this trend has only become stronger and more clear.

Paid-up-front iOS apps had a great run, but it’s over. Time to make other plans.


  1. This is why killing Instapaper Free actually increased Instapaper’s sales: I removed the closest, most “good enough”, free alternative to the paid app. But that only works as long as you don’t have much free competition. 

  2. You probably guessed Instacast, since people like us have talked about it for years. Nope. Maybe you guessed Pocket Casts, since they just had a big, well-reviewed update. Nope. For as long as I’ve been paying attention, Downcast has outsold both of them by a wide margin in both quantity and gross.

    But the most popular podcast app besides Apple’s, by far, is Stitcher. And it’s terrible. But it’s free. And I’ve had people in real life tell me, over and over again, that they “just use Stitcher because it’s free.”

    This is the real app market. 

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