What the new App Store changes mean for developers and users

By: techspot

Major changes are coming to the App Store. Later this fall, developers will be able to buy search ads for keywords in the App Store (similar to what Google already does).

But the biggest news is that app subscriptions are expanding to all app categories.

In the past, Apple has offered subscriptions for apps that provide access to subscription content (Netflix, Spotify), news (think The New York Times), certain types of cloud services (Dropbox, Evernote) and for other services such as dating apps.

But now, Apple is going to open up the floodgates for all types of developers.

This is a big change for mobile software. Until now, mobile software has existed in a world where you either pay once to download an app or you download an app and then pay to unlock features (or to remove ads) using in-app purchases.

Typically, most apps have had a one-time cost. Apple has never offered a mechanism for upgrade pricing. This has been a point of contention among app developers for years because it has forced developers to make a decision: Keep offering updates and major version changes to all users, regardless of when they purchased the app or release a brand new app for each major version and hope you can get existing customers to upgrade and buy the latest version.

App subscriptions don’t solve all the problems around upgrade pricing, but they do offer developers more options. Similar to what companies such as Microsoft and Adobe are already doing on the desktop, developers can offer a monthly or annual subscription to an app.

What it means for developers

At Macworld, Glenn Fleishman has a good overview of how subscriptions for apps will work, at least as it stands right now.

But there are still a number of open-ended questions from developers and users alike.

For developers, the good news is that every application type will be eligible for subscription pricing. That means that whether you make a weather app or an app that is tied to a more complex backend web service, you can charge a subscription for your app.

But as Apple is clear to state on its own site, the business model doesn’t work for every app.

Apple lays it out:

Like many freemium apps, successful auto-renewable subscription apps operate as services that are continuously supported, and often require sustained content development or feature enhancements to retain users. Whether updating content on a regular basis, providing on-demand use of a service, or giving access to a large collection of content, successful auto-renewable subscription apps are equipped to offer continued utility and enjoyment to their subscribers.

For developers, switching from an in-app purchase or buy-once model to a subscription-based model isn’t something that can – or should – happen overnight. Developers will need to evaluate their release cycle and how people use their apps.

And developers are understandably cautious about this new model, too.

Denys Zhadanov, VP of marketing at Readdl, an iOS and Mac software development company, shared some of his thoughts on subscriptions on Medium.

He writes:

Subscription works only if your app addresses recurring high value need for the end user. For example, apps like Scanner Pro that are used occasionally are bad fit for subscription.

And that’s a good point. Apps you use occasionally are probably not a good fit for a subscription model. But apps people use every single day (productivity apps) or that are geared at a more professional audience, could benefit.

What it means for users

There are still a lot of open questions about how app subscriptions will be implemented, and Apple has said it plans to talk to developers at WWDC to get their feedback.

Right now, one of the biggest open questions is about how apps will work if a subscription is not renewed. Right now, a content app such as Netflix won’t let you access the service. But magazine subscription apps generally still let users access back-issues of past purchases, whether they still subscribe or not.

It’s going to be telling how Apple implements the degradation process. And it may be that this feature will be up to the developer.

And then of course, there is the question of whether this addition of subscription models means users will be forced to pay more.

On MashTalk this week, Mashable Chief Correspondent Lance Ulanoff and I debated the impact this will have on consumers. I argued that the only way developers can continue to build quality apps is if there is a sustainable ecosystem. And that means that as a consumer, I might have to pay a subscription for an app.

Lance’s fear is that this means he will now have to pay more to use apps he’s already enjoyed using for years. Moreover, he argued that consumers have become used to the current way of offering unlimited upgrades/updates for free, for eternity.

Apple blogger Michael Rockwell shares some of Lance’s concerns. He writes:

My biggest fear is that developers will ask too much for their apps and I’ll be forced to pay an unreasonable monthly fee in order to continue using them. In an ideal world, for me at least, developers of high-quality productivity apps will charge a yearly fee at a price point similar to what they charge to purchase the app today.

A few months ago, longtime Mac/iOS developer Smile shifted their pricing of its TextExpander app from a one-time fee to a subscription. The user backlash was immediate – even though the tool Smile sells is aimed at power users and the types of users that are already willing to pay for software. The backlash was so strong, Smile had to revise its pricing and commit to continuing to sell and support its older, non-subscription versions of TextExpander.

Can this reverse the trend on app fatigue

The bigger question, of course, is whether these changes to the App Store can help reverse some of the larger trends of app fatigue.

On Wednesday, Peter Kafka at Recode reported on a new study that suggests that users are downloading fewer apps. In fact, the average user downloads zero new apps a month.

This is a problem for developers, of course, but it is also a problem for Apple. Apple is very proud of the fact that it has paid out $40 billion to developers in the last eight years and it is happy to show off how its app ecosystem thrives in different sectors.

I can’t help but wonder if we are in the midst of a major reset in the way apps are sold, developed and marketed.

But what happens if consumers do start shunning new apps more en masse? That means developers will be less incentivized to build for the App Store and other related platforms.

Already, we’ve seen interest waning from developers when it comes to Apple Watch. The changes Apple is making, particularly with search ads and app discovery, could help developers get their apps in front of more users – and that’s a good thing. Still, I can’t help but wonder if we are in the midst of a major reset in the way apps are sold, developed and marketed.

At WWDC next week, I plan on asking developers how their approach to app development is going to change going forward and whether subscriptions are a path forward to a more sustainable ecosystem.