App Store subscriptions are an interesting thing and I have some ideas about where this could (but probably won’t) go, and I decided to give my opinion about Apple Pay as well now that I’ve got it. If you feel like this note is earlier than usual, that’s correct. I’ve decided to start posting them a bit earlier, so expect them around this time in the future.

App Store subscriptions

The week before WWDC Apple came out with some developer news they didn’t want to leave for WWDC¹. There are some major changes to the App Store, and that means every App Store: iOS, tvOS, and the Mac. Three main changes were mentioned but I’ll focus on the one that will have the most impact on the people using and buying these apps: the ability to have subscriptions for every app.

In the past months there have been a number of services that changed to a service model as either their main source of income, or as an additional service. This wasn’t really possible for App Store apps though as that was mostly limited to media focused apps, with Netflix being the biggest example. This new policy will open that ability up to every type of app allowing subscriptions for everyone. So, let’s follow the path of every Apple related site since this was announced and look at what this means.

One of the major complaints about the App Store for developers² is the lack of free trials and upgrade pricing, both major marketing tools that have been used with great success for years. These subscriptions seem to be an answer to that, but it’s not an exact match. To be clear, subscriptions do allow free trials so that part is solved, but upgrade pricing isn’t.

While it’s probably possible to have special prices/subscriptions for existing customers³, the big difference with a subscription is that once you no longer want to pay for it, you don’t have access to it anymore. With upgrades you can always choose not to upgrade to the latest version, but with a subscription that’s not an option.

In an interesting case of timing, on the same day of this announcement Sketch (the digital design application that left the App Store because it was too limiting) introduced a subscription plan that solves this. Their subscription is for receiving updates, not for being able to use the app. If you have a subscription you receive updates for free, but if you don’t have a subscription you can still keep using the app. Unfortunately, this is a route that won’t be possible for App Store apps as you can’t prevent upgrades from being available to someone⁴ unless you no longer support their hardware.

So, this might make some people very unhappy: they paid for something for a long time and then suddenly can’t use it anymore when they decide that it becomes too much. That’s unfortunate, but it can’t be helped. On the other hand there are a lot of other good things about this.

Most importantly, subscriptions will let developers get paid on a regular basis. I’ve written a number of times about applications that suddenly disappeared, and having subscriptions might help prevent this. Single payments when you buy an app can be a great way to make money, but it has a big problem: you either have to make the price high enough to support ongoing development, limiting the user base, or you “make it up in volume”. Often enough, while the market is big, there isn’t enough demand for an app to make it up in volume and no matter how good the app is it will likely mean they end up acquired, go bust, or stop working on the app. Subscriptions won’t solve this completely⁵ but they might help.

The other thing that I’m excited about the subscriptions in general is that this might open up some real development options for the iPad Pro. Up until now there haven’t been many apps that take advantage of the “pro” features, as they don’t have a good way to make money from them. This might change that.

While thinking about the possibilities of these subscriptions, I thought of another option they might bring. App rental. Think about it, these subscriptions can be for a month, and after you cancel the subscription you no long have access to them. To me that sounds like a rental. If we take the OmniGroup’s apps as an example⁶, they price their apps at the value they have for power users. And for those apps that you use a lot (in my case OmniFocus) that’s worth it, but sometimes you only need to use an app once a year for a couple of weeks. So if they decided to offer this rental option it might be possible to pay for a month of Omnigraffle access instead of the full price. In the same way you can easily try out different applications and see which one fits you best.

Of course, these one month rentals might not be what developers want to see. I think it might be a way to make more money though, when compared to someone not buying the app at all. I know that often enough I’ve made the choice to use a free, but not as good tool. However if I can use the best tool for ten dollars instead of being driven to a inferior tool because that good one costs 100 dollars I will gladly pay that ten dollars.

My excitement about all this aside, I foresee a messy transition phase. Too many apps will want to try this subscription model, and for most of them it won’t work. In fact, it wouldn’t surprise me if a lot of apps that make this switch will die off, or at least suffer. As I’ve mentioned before, people don’t like subscriptions and when you’re competing with Netflix for someone’s money, you’d better be good enough to back that up.

Apple Pay in Australia

A bit over a month ago, an Australian bank (ANZ) started offering Apple Pay. Before that it was only possible using American Express credit cards. As I’ve been curious about Apple Pay since its introduction⁷ I decided to open another bank account so I could use it. This was delayed a bit by my holiday, but I’ve had it for a little while now and I really like it.

The advantage that Australia has in this regard is that you can pretty much pay with NFC anywhere. There are some places that only accept cash (often small restaurants and shops or on markets), but there is rarely need to do anything other than tap your card. In that regard I didn’t expect that Apple Pay would be a big advantage, and it isn’t. The speed difference between using a card and your phone is negligible (especially if you have to grab some rewards card as well), but that’s not what I like about it.

There is of course better security, but that hasn’t really been an issue for me in the past. The thing I like the most is how it allows me to leave my wallet at home. It’s a little thing perhaps, but to me it makes it worth using it. It would of course be even better if public transport was hooked up to it like in London, but this is already a great start.

I’m not trying to convince you to use Apple/Android Pay. While I’m happy with it, that doesn’t necessarily mean you will like it as well. I don’t even use it all the time either.