We'll be covering everything going on at Apple's Worldwide Developers Conference (WWDC) next week. Make sure to visit or subscribe to the Apptopia blog to get up-to-date reactions and analysis.
Apple has a problem.
As recently as three years ago, the App Store was heralded for ushering in a twenty-first century gold rush. Back in those early days, any serious developer could expect a reasonable ROI after publishing an app, and if they got lucky, a whole big pile of cash. Remember iBeer? The iPhone app that did little more than simulate drinking a pint? Ya, it made millions.
But times have changed. The App Store isn’t nearly as lucrative en masse as it once was; so much so, that according to a 2015 study, an estimated 1.6 percent of developers earn more revenue than the other 98.4 percent combined. Unheralded and competing in Social Media? Forget it. Food and Drink? Good Luck. Games? Better have the budget to hire Kate Upton and Christopher Walken.
And so, with the announcement of major changes to the App Store, including the encouragement of subscription-based revenue models and the introduction of App Store search ads, Apple is aiming to create a more level playing field.
Here’s how it will impact developers and publishers.
Subscriptions in every category
Right now, the only apps permitted to sell subscriptions are those classified as news, cloud services, dating, or audio/visual streaming. Come the change, every single app will be eligible. It is not required to move to a subscription-based revenue model, though developers of complex apps (i.e., strategy games) or those with frequently updating content should consider doing so, as after a year of successful subscriptions Apple will drop its cut of revenue from 30 to 15 percent.
Moreover, the subscription-based revenue model offers potential for new marketing avenues. Promotions such as discounted subscription rates or free-trials can be new tools in reaching users, especially when used in conjunction with the new App Store search ads (more on that later).
It’s not all roses, though. Some fear subscription-based apps, particularly games, will become more entrenched in high-ranking chart positions if consumers prove to be more discerning in plopping down potentially larger amounts of cash. On the flipside, that could also create a situation where non-subscription based apps capitalize on consumer balking. We’ll have to wait to see how things shake out.
Feature tab filter
One of the biggest drawbacks of debuting an app in more competitive categories is the top apps (by chart rank) tend to account for the vast majority of revenue and downloads, making discoverability without a massive user acquisition campaign difficult. For example, according to Apptopia Stores & Categories data, the top 50 apps in the Board Game category are responsible for 61 percent of total downloads.
But the new category feature option can help. Now, if a frequent user of a particular category visits that category’s Featured tab, the apps he or she already downloaded will no longer be displayed, increasing the chance he or she discovers an app outside the top 50.
Still, the effectiveness of the filters remains to be seen, and as such, developers and publishers should carefully consider which categories present the best opportunities.
Source: Apptopia Stores & Category
App Store search ads
App Store search ads are, for all intents and purposes, recommendation units. Search for a specific term, and a sponsored search result will pop up. And considering that 65 percent of apps are found through searches, it’s not a bad idea.
What we don’t know is how users are searching. If, for instance, that 65 percent is compromised of mainly searches for specific app titles (i.e., Clash of Clans) then developers might have to (if Apple allows it) buy on searches of branded keywords (i.e., Like Clash of Clans? Try X App). If users are searching in more general terms (i.e., free strategy games) than developers can optimize long-tail keywords to increase discoverability. Again, this remains to be seen.
Source: Medium
Takeaways
As of now, thoughts are mixed. Some have suggested the changes are akin to being “an earthquake in my world, in a good way." Others have suggested that all of this is an underhanded way by Apple to squeeze more cash out of consumers, and the reveal ahead of WWDC is an attempt to mitigate any bad press. Either way, it doesn’t really matter. It’s too soon to tell how the changes will make impact.
Will consumers reject subscriptions? Will subscriptions ease discoverability or hurt it? Can the feature filter help low-ranked apps climb the charts? Will search affect the app descriptions and titles? Who knows?
But however it shakes out, competitive intelligence will remain as important as ever.
