Actually, Apple does allow free trials and paid upgrades (sort of)

Have you ever discovered something fantastic, but been to worried to share for fear that it will go away? That's me.

I've been reading a number of blog posts recently by different iOS developers. It's been fascinating reading really. I think it may have started most recently with Jared Sinclair's sharing of his revenue from his app Unread. http://blog.jaredsinclair.com/post/93118460565/a-candid-look-at-unreads-first-year The money he made from that app is pretty impressive, especially given the competition in the App Store for RSS readers.

David Barnard reposted a link to a blog entry from 2012. I had to share after reading it again. http://davidbarnard.com/post/58970916992/the-sparrow-opportunity

Let me tell you about my apps. I first released GW Mail in March of 2010. It's a boring business app. It's an email client that will let you connect to a GroupWise email system. Novell GroupWise is an email system like Exchange or Lotus Notes. Only a lot fewer people use GroupWise. But if you do use it at your work, my app is pretty helpful. Use it every day helpful.

When I first released my app I wondered if people would be willing to pay to solve a problem that Novell should be solving for them? The answer was yes. The first version of my app could barely do anything. You could read a few emails and that was it. No replying, switching folders or anything. But within a few weeks I had added those features, a separate calendar app and then eventually a contacts app too.

I updated GW Mail 68 times from Mar 2010 to Feb 2014 without requiring additional payment.

Sales were good. They were good enough that they paid my salary. And then also for another person to do support and testing. Then sales peaked in 2011. The gradual decline started. The support/testing employee is long gone. And now finally, the company is no longer able to cover payroll.

But since the announcement of iOS 7, I've been working on a paid upgrade. It had an all new interface. It merged the mail, calendar and contacts into one app. It fixed a number of annoying bugs. It had everything I had learned over the prior years. Background refresh notifications, ARC, NSURLSession and more. I rewrote most of the app to pull this off. It took forever. Perhaps I got a little carried away.

This would be a paid upgrade. It had to be or the company would not survive. But I didn’t want to have to do this again in a year or two. A subscription seemed like the best way to align my need for continued revenue and my users’ need for constant updates. Every year the new iOS release seemed to break a few things no matter how hard Apple worked at providing backward compatibility. It happens.

But technically Apple doesn’t allow subscriptions just for apps. Usually subscriptions were for things like Dropbox or Pandora. But we have started to see subscriptions for apps like MS Office. I added a subscription.

But how much should I give away with the app? I had a friend that had done a similar backend subscription sync subscription with most of the main app free. I think they gave away to much of the core functionality and lost most of their revenue. I didn’t want to repeat that mistake. I wondered if I could get away with putting everything in the subscription. So I did that.

Problem: businesses and schools buy my paid app all the time. (VPP) How would they buy my IAP? Not possible. So I built a subscription management server. It validates receipts in general for users. And it also give me a way to sell a volume license to a company. They pay me directly, I unlock the app for their users so they don't see a prompt to buy a subscription.

Free trials?

Free trials were pretty easy to do with my subscription management server. The server tracks people. The app lets users try the whole app out for free for a week. At the end of the week the app turns off and asks them to pay monthly or annually.

Honestly, I didn’t think Apple would approve this. But I submitted the app. They rejected the app. They said my app description had to have a reference to a terms and conditions page on my website. And I couldn't mention contacting me to for a site license from within the app or app store description. Um okay. That's it?

I fixed the problems and sent Apple an update. They approved it. I couldn’t believe it.

I did another update. They approved that.

I still couldn’t believe they let me do this app. The app was approved but still was not publicly released. I was fixing bugs, beta testing with a few people and getting the subscription logic just right.

I went to WWDC. While I was there I sat down with the App Store approval folks. I told them about my app. I asked, “why did you approve my app?” The answer, “because you connect to a backend server.” Okay then.

Here is a link to the new app: GW Mailbox https://itunes.apple.com/app/gw-mailbox/id724785934

Complainers

Like other people that released a paid upgrade for iOS 7 over the last year, I’ve had a few complainers. When I respond to these people I tell them the following: First, the new subscription is necessary to support continued development and upgrades. Second, if you are unsure if the new app is worth paying for, give the free trial a try. You can have access to all of the app for a whole week. If it isn’t worth it, so be it. Third, Apple doesn’t allow upgrade pricing. But I’ll give you three extra months of free trial with the app. I go onto my server and fix their account by hand so that their free trial doesn’t expire for a few months.

Most people that try out the app agree that it is worth paying for.

Marketing to existing customers

I put an upgrade prompt into the last update for my old app. The old app watches the App Store for a new app published by me. If it sees it, it prompts the user to check out the new app. The user is only prompted once. The popup only works if the new app was published in the last 30 days.

Did it work?

Is my company sustainable again?

Maybe not. I had hoped that a large part of my existing customer base would upgrade to the new app. I had a pretty good idea of how many people were still actively using my app.

Over the last month since I pulled the old app from the store and replaced it with the new one, sales have been pretty sad. It looks like about 5% of my customer base have upgraded. That isn't enough.

iOS 8 to the rescue?

It turns that iOS 8 breaks a few things in my old app. It is about to get pretty annoying to use. I also will not be able to adapt to the larger screen sizes that are coming. Maybe my users will want to get my new app then?

iOS 8 extensions are a great opportunity for my app to do new things. I’ll roll that into my app and see what happens.

If not, I need to find a new app to create or someone else to work for.

Pricing

Most people only bought my old email app for $9.99. I also had a calendar app for $4.99 and a contacts app for $4.99. The new app is $.99/month or $8.99 a year. Most people buying the app have gone for the annual option. Yes, that is a pretty serious drop in initial revenue per user.

A good idea for all developers?

No. Most people only use apps for a few days at most and never open them again. This sort of subscription that I am doing only works if the app is able to deliver continued value to users over time. Did I just kill my company? Maybe. But then, it was already dying.

Is the fact that it is really hard to build a sustainable business on the App Store Apple's fault? Nope. But the diversity, quality and depth of the App Store is a big asset for the iPhone. It is in Apple's interest to keep this asset.

tl;dr
I have an app on the App Store right now that has:
- a Free Trial
- a subscription to use 100% of the app, no payment, the app shuts off
- I can give users a few free months of use of the app based on their prior use of my old app; an “upgrade discount”

Apple allows this. I’ve updated my app multiple times.

The App Store is a Ponzi scheme

The best apps on the app store are apps that provide some type of utility. They are useful. They are helpful. These are the apps that you use on a regular basis. They are apps that help you take better pictures like Camera+, apps that help you track tasks like Appigo's Todo, and apps that let you create and modify office documents like Documents To Go. Apple even makes these type of apps like Pages, Numbers, and Keynote.

Actually there are two types of apps on the App Store (that try to make money as a paid app). The one that gets the most press is the gamed/entertainment category. If the developer is lucky, these typically make *a lot* of money all in a weekend or two. Their monetary model is a lot like the movie industry. The apps are bought in order for people to be entertained. After the first week or two, the app is old and few people will buy it.

Apple has told people to go buy these useful apps in order to make your devices more productive and valuable. How many years did Apple run the "there's an app for that" advertising campaign? And they are right. When I go buy Apple's Pages app, I no longer feel like I need to have Microsoft Office for my iPhone or iPad. I can download a document, modify it, and send it back out to a coworker. No Microsoft Office needed, Mr. Gates.

These useful apps are like a Ponzi scheme.

Let's say that you buy that app. You pay your $10, $5, $.99, or whatever. What do you expect to get for your purchase? You expect a quality app that does what the app description says. You expect that you will get updates to fix minor bugs. But what about new features? App developers add big, new features trying to get new people to buy their app.

And this is how the App Store is like a Ponzi scheme. If new customers stop buying the app, developers stop updating the app, and all the old customers stop getting the increased value from updates to their favoriate apps. Somebody has to pay for the developer's time. I would love to see some analysis that shows how many of the apps on the App Store have not been updated in the last six months, or the last year?

This has to be fixed. Apple wants developers to create great apps. That is what they tell the developers repeatedly at WWDC. Great apps sell more devices, which makes Apple happy. The problem is that developers make more money selling new apps and less money updating their current library of apps.

Why should an app developer invest a couple of weeks of their time adding a new feature? It will not bring in new customers. It has the potential to break something for the old customers, which increases support costs. Why bother?

Potential solutions

Trial periods for apps would be nice. Amy Worrall has been getting some visibility for her comments on free trial periods. While I think this would help increase the average selling price of apps, I don't think this would fix the Ponzi problem.

Advertising? You have to sell a lot of copies of an app in order to make enough money from advertising. While that might work for the top 10 in each app store category, it doesn't work for smaller niche apps.

Freemium? For the most part this just creates crappy apps. Who hasn't played a free game that quickly isn't fun because you have not paid for some In-App-Purchase power up? It usually sours me on the game faster than I develop a desire to buy the extras. These apps usually just feel like a scam instead of something well made and designed to help me solve a problem.

Subscriptions? For some things this works well. If there is a backend service that can really provide value, have the user pay for the service and the app comes for free. But not all apps make sense to have a service part to them. I get a lot of utility out of Apple's Pages app without adding a paid, backend service. How about an email client or web browser? If you forced a subscription on to that, it would break the value of the app.

I wonder if some sort of expiration date would work? Maybe you get free updates that are compatible with the current version of iOS for a year?

I'm still trying to think up a good solution. But I am pretty sure that nothing will work well without Apple's cooperation.