Ever since we started working on the first version of OzTV, our Australian TV Guide for iPhone and iPad, nearly three years ago there’s been regular talk in the media of the lucrative potential awaiting developers in the App Store, referencing the million dollar success stories of games such as Angry Birds or Tiny Wings.
But the reality for developers of many successful apps is far different.
Creating a compelling, well-made app takes many months of hard work for unknown results. Even achieving successful downloads in the hundreds of thousands doesn’t always recoup costs, let alone provide financial stability, leaving many in the industry to face the balancing act required by taking on client work or consulting jobs.
When you consider the work involved to develop, release, maintain and update a successful app you end up with an immense investment of time and money. Simply calculating what two people could earn on industry full time salaries and you end up with a price tag of between $750,000 to $1,000,000 and a few years worth of time.
And it’s one thing to create an app, but then to support and grow it over the years takes continued hard work and dedication. We certainly weren’t really prepared for the way releasing an app like OzTV would change everything, it suddenly became a big part of our lives.
The recent OzTV update on iPhone and iPad took nearly one year of full time design and development to deliver what has been released as a free update to existing users and is sold to new customers at only $2.99. We didn’t really have any other options.
The App Store has provided us an amazing market place to distribute and, most importantly, monetize our work which has completely changed our lives and empowered us to work on our products. But the 99 cent, chart topping culture isn’t ideal.
People have their $900 iPhone, using their $50 per month plan while they wait for their $4 coffee and complain about paying a couple of bucks for an app they use daily. Add to this the fact they might own a $500 iPad and have another monthly 3G plan or internet connection and it becomes obvious: people have money and are willing to pay but the economy that has been created for apps values them disproportionally low, at potentially unsustainable prices.
It’s a bit boom or bust, where even if you are relatively successful you have two main choices; either walk away or reinvest in another app and hope it will achieve the same or a higher level of success. The consumer expectations of continued free support without subscription or paid updates does not allow for truly sustainable businesses built around single products.
There are trends in the right direction. Tapbots recently released Tweetbot for Mac at a $20 price point and their App.net client, Netbot, as separate $5.99 apps. Mac and iPad apps can generally fetch more than their iPhone counterpart, in an odd bigger equals better mentality.
We’ve continued to sell two separate OzTV apps, each priced at $2.99, chosen to realistically cover our data and business expenses. Still it would be nice to be able to charge more and cover development costs. As it stands we don’t do it for the money, there’s not enough to justify the amount of time we spend working on the app. We do it for the enjoyment of creating something great, having complete control over our work and the opportunities that come from releasing something that demonstrates everything we are capable of, without compromise.
If this is indeed the rise of a new medium, it’s a mentality that will have to change. As the market place and companies creating apps mature I hope we’ll start seeing a re-evaluation of app price points. It’s a simple business decision; selling an app at around 99 cents just isn’t going to be viable unless you are fairly certain of huge, continued, international success. Those aimed at a niche demographic or a small region will need to find a more appropriate price that will allow continued development and support.
About OzTV & Apps Perhaps
OzTV was created by Melbourne based Designer/Developer duo Alex Johnston and Jeff Tan-Ang who met three years ago while working on the Yellow Pages and White Pages iPhone apps for Sensis.
They began to work on a side project, part time, over weekends and evenings that would eventually become OzTV, released on iPhone in August of 2010. Within six months they’d quit their day jobs to form Apps Perhaps and released the iPad version just under a year later in July 2011.
The apps have since gone on to be consistently promoted by Apple, featured in publications including in The Age/SMH and Woman’s Day and win several awards including a Mobi in 2011 for Best Utility App.