(Mac) App Store Upgrades

There’s been a bit of discussion on the 5by5 Network recently about the lack of upgrades on the Mac App Store sparked by a recent blog post on the subject by Wil Shipley.

I see this from both sides. As a consumer I naturally want software to be as cheap as possible, and I can’t deny that the concept of “free upgrades for life” is not appealing. Yet, on the flip side I write software for a living, and the idea of getting paid once and having no upgrade revenue stream is not a nice one.

The folks at 5by5 (specifically John Siracusa and Marco Arment) have covered most of the salient points, so I recommend having a listen back to the latest episodes of Hypercritical and Build and Analyze.

Some of the discussion has pointed out that one possible option is for a developer to release “version 2” as a new application and remove the previous version of the application from sale. This has two drawbacks for existing users (which have been debated at length, but I’ll recap):

  • if they want to upgrade they feel cheated at having to pay for a new app without the availability of an upgrade discount;
  • if they chose not to upgrade they are unable to get application updates for their existing application as it has been pulled from the store.

Discounted upgrades are gone

First things first - I think that the old pricing model of a high initial purchase price followed by discounted upgrades is probably gone, and a natural successor would appear to be a consistent price for new and upgrade purchases.

There will inevitably be some pushback on this. Developers won’t like it for the obvious reason - their initial revenue will be lower and they’ll be forced to think longer term. This is a completely natural reaction and it will probably take some major players to set the trend - maybe this is where Apple are leading with their own price drops as they move applications into the App Stores.

I feel that this is a good way to work though it will require a bit of thought from app developers with regard to their longer term strategies - it’s about taking lower margins with higher volumes. It’s about taking a lower purchase price for the initial version but actually taking a higher “upgrade” price for subsequent versions.

Customer opinion could be divided depending on whether they are new or existing customers. New customers will love the fact that the initial prices seem lower - they’ll feel that they’re getting a bargain. Existing customers will hate the fact that they have to pay the same amount for upgrades as new customers will pay.

Overall it’s still a good deal for the customer. They will be buying into an ecosystem which places emphasis on long-term investment in software. Increased volumes means lower prices on average. And of course, paying for upgrades should ultimately mean higher quality software.

Maintaining multiple versions

Of course, this discussion is still meaningless when the App Stores don’t offer a good way to maintain multiple versions of a product.

If a developer followed the model above and charged the same price for each version (i.e. no discounted upgrades) there is still the dilemma about whether to leave multiple versions in the store at once. As a developer I find this unappealing because it leads to confusion amongst potential purchasers. Yet removing the old version is not really an option as it has a negative impact on customers who don’t want to upgrade for at least two reasons:

  • they are unable to get bug fixes to a product they paid for;
  • if they move to a new computer they are unable to re-download a product that they still legitimately own.

This is where Apple need to make a change to the App Stores. If they won’t go to the trouble of implementing upgrades, then I propose that they give developers the opportunity to mark an app as being “retired”.

A retired app should no longer be purchasable by new customers. In fact it should not appear in the App Store to people who do not already have the app in their purchase history. Only those who have purchased it before should be able to re-download it to a new computer, or obtain updates.

This still isn’t a completely straightforward process for developers (or for customers) as the new version is technically a different application, and as such poses issues for data migration between versions. Also customers will need to be informed of new versions, possibly through annoying alert dialogs in the old version.

Still, if Apple allowed applications to be marked as “retired” this would be a big start. In the meantime, you could always raise the price of your old version to $999.99…