Ulysses And The App Store Monetization Problem

When iOS 11 drops later this year a good number of apps are going to stop working thanks to the switch of the platform to 64-bit. At least some of those apps will be ones that have been paid for and then been abandoned once the income stream dried up.

The problem for developers in the App Store is that it is only worth maintaining an app whilst new users are continuing to join the party. Once the point is reached where everyone who is going to pay for an app has done so, the developer is on a literal hiding to nothing.

As a result apps get abandoned and devs move on to something new in the hope of repeating that success.

App Store pricing trends don't help. Apps are cheap and whilst games can continue to bring in revenue through in app purchases - selling game resource or goodies to impatient players - most 'serious' apps don't have that option.

Enter the subscription model and one high profile app, Ulysses. The latest version has implemented an annual subscription. Something which hasn't been universally welcomed.

The problem, as with any subscription, is providing value. Ulysses previously cost $25 on iOS and $45 on MacOS. The new subscription is $40 per annum, which gets you both versions.

If you use both versions of the app, $40 annually doesn't seem a particularly bad deal on first viewing. Until you consider the price of an Office 365 subscription at $69 a year. The whole of Microsoft Office, Skype minutes and 1TB of OneDrive storage. Ulysses just isn't in the same ballpark.

Now there are fewer users of Ulysses, so development costs are more narrowly shared. However there's a much smaller development effort required for what is basically a tricked out text editor.

The validity of the subscription model isn't in question, so it's the pricing of the apps which are seriously out of whack.

In the old model of paid apps, it would be reasonable to expect a major version upgrade of every three years. It would therefore be reasonable to expect that a subscription would approximate to one-third of the original application cost, around $8pa for iOS and $15pa for Mac in Ulysses case. Forcing users to pay for both doesn't make a lot of sense.

Now all this is academic if enough users take up subscriptions to allow the developers to continue to maintain and update the app. That's the only metric which matters to both developers and users of Ulysses.

For the wider App Store it has more serious repercusions. Apple is pushing the iPad as a laptop alternative, but some of the apps that make that even partially possible don't currently have a viable business model. App subscriptions may work for Microsoft and Adobe, but that's because the economies of scale mean that you get an awful lot of capability for not much money. Independent devs can't get that kind of bang per buck.

If the subscription model fails for a high profile app like Ulysses and it isn't able to make the one off payment model work either, what future is there for serious apps in the App Store? And what future for the iPad as a serious machine?