The Race to the Bottom Benefits Platforms (not Developers)

There’s been a ton of recent conversation in the iOS world about the inability for most indie developers to create sustainable businesses through the iOS app store. In particular, these devs are talking about apps that require larger development efforts – they want to charge more than “impulse purchase” prices for these, and thus want trials, upgrade pricing, etc. to support that model. They want things to work they way they always have – I don’t blame them.

I think it’s worth considering who wins in this “race to the bottom”. In general, more stuff for free benefits consumers, which in turn benefits the platform.

“But wait!” the developers cry. “When the platform doesn’t support building more sophisticated apps, the consumers ultimately lose!” I know this argument, I’ve made it myself regarding the WordPress ecosystem. I was wrong.

Consumers have been well trained that they can expect incredible value for free. Sure, they may trade off their privacy and be subjected to ads, but they aren’t asked to fork over their cash directly.

VC-backed companies often contribute to the problem as well. As they clamor for users to their platforms, they give everything away – it’s so easy to flip the switch in the future and start the money pouring in. Or if that doesn’t work, they fold up shop and call it a day. Oops!

More complex apps will get made. They just won’t be built using the model that indie developers are used to.

There will be apps supported by alternative revenue streams. Some might have ads or sponsorships, some might mine and sell the data they produce, some (like Evernote and Dropbox) will be a gateway to a commercial service. People will figure out ways to get money out of a large enough user base, and apps will get built.

I’ve seen this happen in the WordPress ecosystem already. It’s a different beast because it’s an Open Source community, but it’s still an interesting parallel.

Basically this happened:

  1. A bunch of folks built stuff and released it all for free to a small community, largely consisting of fellow developers and tinkerers
  2. A whole bunch more folks started using the platform and the community grew – it wasn’t just developers anymore, it was end users with expectations of support, etc.
  3. Devs wanted to start monetizing the products they were providing
  4. The platform didn’t provide the tools to make money in the way that the devs wanted -instead it invested in tools to promote free products
  5. Eventually a variety of patterns arose to monetize both commercial and “free” products (subscription clubs with access to a bunch of different plugins/themes, free products with commercial add-ons, sponsorships and ads, products that were created to support hosting services, etc.)

It’s not the :scare: pure :/scare: and direct approach of charging directly for the software, but it’s still developers writing code and making money.

The same thing is happening for iOS. There is money to be made. The platform and consumers are winning.

“Adapt or die” is our mantra for those business who are threatened by technology. We have little sympathy for newspapers, the music industry, etc. Perhaps it’s time to include software companies in that list.