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Pragmatic app pricing (marco.org)
84 points by ingve on Oct 13, 2015 | hide | past | favorite | 32 comments

Looks like we've got some interesting thoughts from Marco.

Seems like he regrets keeping Instapaper a paid app and not making it free to go after marketshare and take on Pocket. He seems to conclude he "lost" against Pocket, and now doesn't want to make the same mistake with Overcast.

I personally don't think the patronage model will go very far. I think he's doing more to make the full app free and gain marketshare, and any money made by "donations" is just bonus. If he can grow his marketshare and get a lot of users, then it looks like he's going to try to raise funds. So, this business model makes sense for now... at least until he's able to raise outside funds.

Overall, Marco seems to be insinuating that the podcast market is bigger than people think, and VC money is going to enter the space; thus, he wants to prepare for that and maximize the potential for his app and the possibility to raise funds and go really big.

It does seem that when VC funds enter a market it presents a challenge to existing indie developers who are making a living with a paid app. The VC-funded company will provide a great app (usually) for free, since they don't need a monetization stream right away. They usually are aiming to build a big audience and then monetize later.

Indie developers are then faced with a decision. How do they compete with VC funded companies? They likely are going to have to either make their app free and go head-to-head with these VC funded companies (and maybe raise money themselves to do so). Or they can narrow their scope and become more niche apps appealing to a more limited audience with high-end (hard-to-copy) features that might not appeal to the masses but to the minority who might pay.

But overall, Marco's blog post does bring up the challenges indie developers face when VC funded companies enter their space.

Would love to hear more thoughts on this.

But let's assume we're not in a bubble, so raising funds isn't an end in and of itself. Where does the money come from to give investors a return when the entire app is free?

Podcast advertising is fantastically profitable even though it's extremely unsophisticated. As the profit margins shrink due to increased competition, more sophisticated ad formats are going to come along to keep the lights on.

Right now, every podcast listener hears the exact same ad regardless of where or when they are listening. It seems obvious that at some point soon, podcasts will include a custom code for "insert ad here" and an ad exchange will bid on that 30 second spot and put a targeted ad there. Currently, the MP3 + RSS format of podcasts doesn't support this degree of sophistication which is what Marco is alluding to with it's walled gardens comment. There's a goldmine for whoever can figure out how to move podcasts into a vertically integrated format and define the platform.

How did whatsapp's investors get a return? Sure, they had some income, but not enough to "pay back" investors. But, lo and behold, sugar daddy comes along and drops some of that high fructose acquisition syrup on their heads.

The best business model is still: make rich people afraid of you so they'll do anything to shut you up or control you.

Ads of course.

Marco says "I’m not doing anything that other developers can’t do" a few times in this post, and sadly I think it's disingenuous.

I believe Marco got at least a couple million dollars from the ~$1B sale of Tumblr (dilution, not clear how much he started with, etc.). That's actually a lot of padding, and means that he can get by for a year or so to try out this free + patronage model. Someone that needs an income, doesn't have that luxury.

Indeed, thinking of Marco Arment as an "indie dev" is sort of like thinking of Minecraft as an "indie game." Regardless of roots, at some point, they both crossed a money line. That being said, assuming he is somewhat financially prudent, Arment probably has enough money to just drop into mutual funds and live off the interest, so I guess it says something about his passion as a developer that he's still coding and trying to make an honest buck off of it.

I think the patronage model is interesting, and I'm curious how he or other developers will make it work within the confines of the App Store.

So once you're successful you're not an independent dev, even if you have no staff? And once a band is popular it's no longer good?

Once you achieve a certain degree of success, you no longer have the same challenges, concerns, or mindset of the typical "indie dev," yes.

This is a guy whose tech podcast I stopped listening to partly because he and some other dweeb wouldn't shut up about their brand new BMWs.

I think the term we're working with here is "having a runway" -- An independent dev with a pile of money in the bank is in a very different situation from one who needs short-term profitability.

"independent" in these contents tends to mean "works alone" which also implies "has limited resources, both personal and monetary."

If you work alone and you have a few million dollars of fun money to burn, that changes people's perception of you. Now you're not doing it because you have to. Where's the struggle? Now you're just entertaining yourself.

It's like saying Bill Gates is an "independent charity volunteer." Doesn't quite get the point across.

This comes a month after he released a content blocker (Peace), it topped the iOS App Store paid charts, and then decided to remove it from sale and issue a refund to everyone.

Topping the charts for a day amounts to tens of thousands of dollars. To most people that's a non-trivial amount of money to toss away to maintain one's sense of morality.

If you need an income, you really can't compete as a new entrant in a crowded space. Big Money will wipe the floor with you, if not now, then eventually. You need to find an underserved market and own that instead.

He also made close to a million on the sale of instapaperfeed to Betaworks...so yeah, he's def. not in the same boat as many independent devs...


A couple of people I trust with inside knowledge of the deal (sorry can't provide specifics, been awhile and I didn't realize that the selling price was not public knowledge when I posted this).

Still, it does the world no good to refrain from using one's advantage because other people don't share it.

He also sold Instapaper to betaworks for an undisclosed sum of money.

Gotta respect Marco for all the success he's had with Tumblr, InstaPaper, (briefly) Peace, and of course Overcast so far...but I kinda feel like he is worried about the wrong thing/people here.

Who cares if other devs. or companies don't like his business model? Does that affect his users or potential customers in any real way? I don't think so.

Also - the patron model is super interesting and I'm excited to see people continue to play with and test it...but I'm not sold that it's a sustainable solution either.

The question to me is: Do people care enough to pay for podcasts? And for those that do, in their mind are they actually paying for the content or the experience/environment? What pain is this specific app itself actually fixing or removing compared to my alternatives?

Marco has proven he's amazing at building experiences and environments people love...and I think he can continue to do very well down that path...but without owning/controlling/providing the content or the 'talent' on the client side he'll never break out of being just one of the middle-men in that part of the ecosystem (and thereby evaluated and paid by users as such).

I think he cares about other devs because he respects them and considers them his peers.

That aside, I agree with him that the small circle of podcast devs have much more to fear from oncoming train of podcast success. That success is bringing money, and money is attracting media conglomerates with money to burn. If they spend their time bickering with each other they will be a smear on the tracks. App markets develop and business models mutate, regardless of how much developers like it or not.

Just one persons experience, obviously, but I have paid for podcasts before. Free podcasts are by far the majority of what I have listened to, but I pay to get the full episodes of "The NoSleep podcast", and have donated to other podcasts when they have the option there and I have liked them enough.

Cool - but do you feel like you are paying for the content or are you paying for the experience/environment that you listen to the podcast within?

My point was just that when people do pay, in their mind I think they are paying for the podcast itself...and don't really care all that much about the middle men (same basic thing with music really -- there are, of course, exceptions)

Oh, I see. No, I am definitely not paying for the experience/environment per se, but I did pay for a podcast app that had features that I wanted. I.e., the most popular free podcast app on Android (Stitcher) didn't have any way to speed up the audio, cut silence, etc, so I paid for an app that did have those features.

Maybe it does now, this was a while ago

Patronage works because he has a huge audience giving him some money. Without a huge audience, it doesn't work. He's one of the most well known developer in the world.

His situation only applies to him. Not anyone else.

Looks like he still cannot get over with Pocket. They were supposed to clone features from Instapaper etc. I paid for both Instapaper and Pocket (when it was still named Read It Later and had paid version on Android). I stopped using Instapaper and used Pocket exclusively because Pocket is simply much better piece of software. Period. On iOS and of course on other platforms Pocket can run but Instapaper can't.

He wrote "They’re coming with shitty apps and fantastic business deals to dominate the market, lock down this open medium into proprietary “technology”, and build empires of middlemen to control distribution and take a cut of everyone’s revenue."

Well, what if they are coming with _better_ apps and fantastic business deals.. ?

Being an indie dev (or a small indie company) does not automatically make you a better developer / software maker than anyone else. Part of that may be lack of resource, but maybe just maybe you're competing with someone better.

Don't get me wrong but I have to say it: I kind of like the guy and what he does but it is getting closer and closer to not be surprised if he shoots belfie one of this days. Whole Peace drama and how it was performed is something I would expect Kardashians to do.

Don't forget when he banned 9To5Mac from Instapaper because they called it Instascraper: http://www.buzzfeed.com/mattbuchanan/how-to-get-banned-from-...

It seems the complaining competitors are betting on keeping content delivery mechanisms from being commoditized. History shows that it is a risky bet.

The article's premise is that Big Money is rushing into podcasts but without giving details what that is. Maybe this is bad for Overcast and other clients, but it could mean that popular podcasts can make more money. Marco is definitely invested in that side of the equation, too, but doesn't talk about in this article.

I think the idea is exclusive content that you have to download "shitty apps" to listen to would be a bad trend for consumers, and probably all around. Sure some popular podcasts can make more money, but at what cost?

> But imagine you’ve been working on Castro 2 for the last year, betting the company on a big launch and a sustainable income.

Sounds like the Castro 2 dev(s) made a bad bet if their success hinges on the available of a free alternative :(

the quote was from a 3rd party; the castro devs said nothing about Marco going free.

edited to add: rather, after people assuming the quote was from them, the developers of Castro issued a statement of "Castro 2 is coming along wonderfully and we're not worried about Overcast going free. <closes twitter, gets back to work>"


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