Is Subscription Pricing Sustainable?

Posted by Matt Birchler
— 2 min read

Subscription apps – are they a sustainable business model? - 9to5Mac

What’s your view? Do you share my feeling that subscription apps aren’t sustainable, or are you happy with that approach, even when you have dozens of them?

I took and look at the subscriptions page in the App Store and I pay for 8 subscriptions for third party apps:

  • Letterboxd: $12/year
  • Twitterrific: $10/year
  • Ulysses: $30/year
  • Overcast: $10/year
  • Carrot Weather: $3/year
  • Castro: $9/year
  • Drafts: $20/year
  • Fantastical: $40/year

This works out to $132 per year, or $11 of my monthly budget going towards these apps. Looking at them now, obviously I could start paying for just one podcast app and Fantastical just shot the overall cost up 43% since a couple days ago, but overall I’m happy to pay for these apps.

I have about 150 apps on my phone though, so these subscription apps account for a vast minority of what I use my phone to do, but they’re definitely the most essential ones, so I’m happy to pay for them.

I understand the concern with subscriptions and the “subscription fatigue” that I see whenever a new app adopts the subscription model, but I also understand the reality of the app marketplace in 2020. Customers get so much for “free” that asking customers to pay as little as 99¢ is often met with an, “I’ll see what free options are out there” response.

You’ll see people suggest that if only we had paid upgrades, that would solve basically all the problems with business models on the App Store, but I’m not convinced. People look at that with rose-tinted glasses because it’s not a thing today. Based on the lower number of desktops apps using this model than even before, I don’t see this as a silver bullet for devs. If even the ones can can use it are moving to different models, why would bring it to iOS suddenly make it more sustainable.

For the time being, I think this is how most apps will work:

  1. Free apps will continue to dominate, because the appeal of free is huge to most people. These apps will either rely on a media subscription (Netflix), will use ads to make a little money, or will exist as parts of bigger companies’ strategies. In app purchases will help some of these do well, especially games.
  2. Paid apps will remain a niche category, with most people buying only a few of these. These will be mostly apps that can exist entirely on your phone/tablet/computer with no servers or maintenance required from the developer. They’ll put out updates for a while, and then abandon the app or put out a paid upgrade every few years that upsets everyone.
  3. Subscription apps will continue to grow, and annual fees will go down, and they want to be able to pitch “yes, it’s another subscription, but it works out to 25¢ per month!” so that it’s a no-brainer for many people. Meanwhile, productivity apps and things that can be essential to people’s work will maybe even go up, such as Fantastical’s $40/year subscription. I’ve already noticed subscription-supported apps seem to get more updates than before they adopted that model, so this should lead to better versions of these apps.