Entitlements of Users

With the release of the Mac App Store, many indie software developers are hoping to transition their customer base to this new marketplace. The problem is Apple don’t support giving free licenses on the store to a developer’s existing customers: everyone has to pay the same price.

Different developers are adopting different strategies to deal with this. Some are maintaining their own distribution channel as well as using the App Store, and expect to do so indefinitely. Some are maintaining the existing channel up until the next major version of their software. And some are switching to exclusively use the App Store right now.

There are a lot of opinions about what a customer is entitled to. Here are some thoughts of mine.

Bugfixes and minor versions

I believe a customer can expect to receive free updates that provide bug fixes, as and when they are released. In the context of the App Store, this means that anyone who bought software before the App Store launched should continue to receive bugfixes for the version they purchased.

CoverSutra is doing this wrong, by charging (App Store only) for a release containing bug fixes and no major new features, after promising that updates until 3.0 would be free. PixelMator is doing it right by continuing to offer 1.x releases to all existing customers, alongside launching on the App Store.

Major version upgrades

If a user has paid for version 1.x of your product, they can’t expect version 2.0 for free. It’s a new version that adds new features, and has cost a lot of money to develop. But can they expect a discount on it?

I believe a discount is nice to offer, but not compulsory. The more expensive software is, the more I’d expect to see an upgrade discount. Photoshop costs £650, and has an upgrade price. iWork costs £72 and does not.

The issue here is the App Store doesn’t support variable pricing. You either give every current user a free upgrade, or you make them pay full price. There’s nothing in between. Some users are feeling betrayed that developers won’t be able to give them discounts on major versions.

The only solution that I can see to this user unrest (as giving major version upgrades away for free is not sustainable) is to do a limited (1 week or so) sale when a new version is released. Unless Apple change the app store system, that’s the best a developer can do. But please, only do it if your app costs more than £20. Anything cheaper than that is already cheap enough!

Future sales and promotions

The strangest objection I’ve heard is people getting upset because an app drops in price or runs a sale some time after they bought it. Some people seem to expect a partial refund in this case. I maintain this is ridiculous.

The rationale given for this expectation is something along the lines of “I’m a loyal customer and early adopter, so you owe me something”. They overlook two things: firstly they assumedly thought the price for the software was fair when they bought it, or else why buy it? And secondly, since they were an early adopter, they have had more time to use the software before the next version is out.

I’m not objecting to companies making goodwill gestures. That’s often a great PR move and serves to make users happy. I’m objecting to a sense of consumer entitlement based on some kind of assumption that early adopters deserve to pay less as those who buy later, or that a sale is hurtful to the people who bought before it. Discounts often exist to boost the sales of an older version before a new one comes out. If the developer had to refund previous purchasers, they probably won’t be able to afford to develop the next version.

With relation to the App Store, there’s no way to do partial refunds. Developers can’t even get a list of their customers, other than a set of cryptic iTunes receipt numbers.

Why use the App Store?

If a developer can’t do some things they used to do to keep consumers happy, then why should they use the App Store? After all, market forces could demand that they don’t.

Firstly, it makes the developer’s life easier. People often forget that this is really good for consumers. If a developer wants to run their own online store, they have to talk to banks and payment gateways to get a merchant account set up. They have to write their own serial number scheme or DRM, and get it linked up to the payment system. They have to deal with taxation in many different countries, and pay to convert currency from foreign sales. It’s a big hassle, and there are many hidden costs.

With the App Store, Apple handles a lot of the hard work. This gives the developer more time to spend focussing on writing the next version of the app, or on customer support. That’s good for consumers, surely?

Secondly, the App Store provides consistent licensing (use on all your personal Macs) and upgrade functionality. People want that, as evidenced with all the comments by people who bought an app before the launch of the App Store and now want the app linked in to the App Store’s update mechanism. Sadly, this is impossible without the customer paying for a new license. I think that’s something Apple should fix, but I don’t think it’s fair to blame a small developer for Apple’s issue. There’s nothing much they can do about it other than not use the App Store at all, and in that case the customers would be in the same boat they are now.

Greed and economies of scale

I saw a post on MacRumors where someone said:

The mac store is nothing but greed. This will cause programs that would have been free to cost 99cent to $1.99.

Luckily, most people on the thread weren’t so deluded. But this is why I despair.

Most developers will never hit the amount of sales needed for economies of scale to kick in. “You should sell it cheaper and you’ll make up for it by selling more copies” is usually bad advice. After all, if the developer goes bust because they’re not making enough money, no-one wins, right? There will be no more bug fixes or updates, so the users lose out too.

Conclusion

A customer can expect that, when they buy a piece of software, they get it at the price they agree to at the time, it does what the description says it does, the software is not too buggy to be usable, and any critical bugs are fixed for free after they are discovered.

Unless they’re paying a subscription price or the developer has promised them in advance, they can’t expect new features for free. Nor can they expect any recompense if the price changes in the future. If the developer does any of these things, it’s a goodwill gesture rather than an expectation.