I helped create the report, happy to answer questions and collect feedback for future reports.
Also, don’t sleep on the accompanying podcast where RevenueCat CEO, Jacob, and I share a lot more nuance and insights that didn’t make it into the report.
Don't you see the problem there. The developers who build crap apps end up being rewarded the same as those who build great apps. Essentially, you're saying that you do pay $5 for a great app because you buy 5 and keep 1, but the developer who built the app you like gets just $1. That sucks.
That's the situation with "entertainment" content generally., e.g. all movies at the theater cost the same.
And just like with movies, review sites, massive advertising to move units and create awareness, and a general distrust of new things is where I'd expect the App Store model to continue to go.
Careful, that's my son you're talking about... just because I'm brainwashing him into a life-long obsession with Apple, doesn't mean he's someone you wouldn't like. ;)
I just get the feeling that he has a condescending look on his face. Being a baby he cannot possibly be condescending, so this might be something I just subconsciously associate with apple t-shirts nowadays.
"Free markets contrast sharply with controlled markets or regulated markets, in which governments directly or indirectly regulate prices or supplies, which distorts market signals according to free market theory."
David, Apple (the "government") does not directly or indirectly regulate the prices of apps (and there is no supply to regulate).
Individual developers are choosing to price their apps at $0.99 (or not). In fact, as I pointed out, most of the apps on the top of the chart are not $0.99.
More importantly, though, is that the charts are just one tool. They offer insight into what is already selling on the store. The charts aren't voodoo, and you don't just magically appear on them one day. Sure, they have an obvious positive impact on sales, but it has absolute no effect on the ability of other apps to sell or make it onto the charts themselves.
Changing the way the charts work is a bad idea, for a lot of reasons. The most important is that the proposed solutions are even easier to game then the current system. The real solution to the perceived problem is to add more ways to discover apps.
Search on the store needs work, and "featured" is entirely editorial (and the choices aren't that great in my opinion). More ways to find new products like a "movers and shakers" view, a "top rated" view, etc, are better ways Apple could actually improve the situation for developers and customers.
Well, technically Apple is regulating the distribution, which is factor of supply. I'm not an economist and may be mixing certain terms, but the bottom line is that I can't sell an app directly to a customer, so the App Store is inherently not a free market. Therefore, Apple IS regulating the supply of my products! How much is debatable, but as someone who has several apps in the store, and talks quite frequently with other developers, I'd say my argument in the blog post is the reality of the current market.
Also, the charts are "voodoo" in their ability to create exposure for an app. You have to have enough sales to first get into the charts, but once you're there, it's amazing how things change. I've had developers describe it as being "sucked" up into the top 10. There is an undeniable momentum that is created once you break the top 50.
As far as changing how the charts work, did you read my blog post? What I suggested is that apps be ranked by volumeprice or even (2volume)*price to calculate the rankings. That's no easier to game then the current system. People have to buy the app either way, and raising the price will only benefit apps that have enough value to warrant a higher price. The idea of the App Store charts is to get the best apps in front of people. My argument is that by ranking only by price, you're getting cheap apps in front of people, not necessarily the best ones. By taking price into account, amazing niche market apps that can demand a higher price will get the same exposure as a broad market $.99 app.
I definitely agree that search needs work, but even with search, there has to be an order in which they are displayed. For a long time it was also volume. Recently it changed, but I can't find any pattern to it. With a ton of crappy apps in the store, showing search results in a random order doesn't help the consumer. Popular apps should still be rewarded with good placement. I'm just questioning how that popularity is determined.
Popular apps do get preferential placement in search -- so much so that exact searches for some apps do not match in the first page.
Putting niche apps that demand a higher price doesn't do that much good, because the majority of people looking at the charts won't be in that niche. That's why apps with broad appeal get on the charts. It's also why there are sub charts in each category.
As for the the supply issue, you're right. You can't sell anything you want on the store. If anything, though, I think it hurts your argument. By your own definition, Apple is exercising at least some quality control, and preventing you from having to compete with total crap. Unless your app gets blocked from the store (which plenty apps have for no reason), Apple's manipulation in this regard just keeps out your competition.
You're wrong, though, about it not being easier to game your proposed chart metric. You're not taking into consideration price manipulation (or questionable ethics). I'm not going to go into specifics, but it doesn't take much imagination.
Ultimately, its not only cheap apps that are getting in front of people, which is where I think your argument falls down. The majority of apps are not $1. 60% of the top 10 apps cost more than $1, and 40% cost $5 or more. This holds up for the top 20 as well.
You talk about the "voodoo" momentum, and I agree, there is a huge upside to getting to the top of the charts. But it isn't the only way to make money on the store. If that was your entire plan, you only have yourself to blame if it doesn't happen. The evidence shows that price is not the determining factor.
Ordering by volume * price is in fact ordering by sales volume measured in dollars, and is bound to maximize that. It makes sense economically for the app store, not just the developers.
It's not about gaming the system but about having the proper economic incentives in place.
More assumptions. The App Store does not conform to any discernible business norms. The downward slope looks grim, but sales can bounce back at any moment and for any number of reasons. One of which is that we will be featured on wired.com tomorrow!
We've got some amazing new features that will be released before the end of the year (again, already paid for), and could spark another few weeks of above average sales. Even if the sales don't bounce back to the peak levels, we're leveraging our existing code base and will be releasing several new apps in the coming months.
As far as my long term plans... did you read the whole article? I said that I'm NOT going to do any major marketing until something changes. I'm focusing my efforts on what has worked so far: creating great apps and working with Apple and the press to get free marketing.
It was meant to be an overly simplistic look at the finances, not an actual financial statement (notice the nice round numbers). I didn't make this clear in the post, but our third app is already paid for and will be released soon. I'm not out of the woods yet, I know that, but I'm headed the right direction. And that's saying something in the App Store at the moment.
Also, don’t sleep on the accompanying podcast where RevenueCat CEO, Jacob, and I share a lot more nuance and insights that didn’t make it into the report.
https://subclub.com/episode/hows-your-app-really-doing-the-s...