Last Updated: 28 May 2017

iOS 10 is here. As James has already written about, the upgrades to Messages is one of the most exciting changes in iOS 10. It’s certainly the area that most people I know have been interested in. The common theme is that it seems ‘un-Apple’.
img_0099There’s a lot to take in, and a lot you can do within the single app. It’s a platform, and as part of the wider iOS 10 system, it’s where we’ll start seeing subscriptions ruling our app behaviour.

You see, ‘Freemium’ is now the typical model for developers. To help developers, Apple has introduced a new subscription model, where after the first year, Apple drops it’s 30% cut to 15%. The drop is great for developers, but it could spell trouble down the line.

While Android may command over 85% of the smartphone market, iOS users generate twice the amount of revenue. Even Google makes 75% of its mobile revenue from iOS. iOS is where the money is, so the subscription model will likely appeal to many developers, many of which are struggling to monetise their apps.

But there’s a problem. Here’s what I’m currently paying for every month:

Apple Music Family Plan – £14.99
200GB iCloud Storage – £2.49
Netflix – £7.49
Amazon Prime – £6.58
NowTV – £3.49 (but usually £7.99)
Wired – £1.42
Vanity Fair – £2.49
GQ – £1.99
The Sunday Times – £8.00
Total: £53.74
Total over 12 months: £644.88

That’s excluding my phone contract, the cost of insurance, the cost of the phone over time and other monthly outgoings such as rent, bills, travel, gym, food, etc.

Now, of course, I don’t need to subscribe to the magazines. I also share out my video subscriptions with family members and have family members on my Apple Music Plan, but I don’t see why I should get people to pay for something I’d be using regardless.

These costs also exclude my Office 365 subscription, as I’m using one of my father’s family slots.

The point is, if people already have subscriptions and sit down to work out their monthly outgoings, are they likely to want to add more subscriptions to their lives? My hunch is no. Unless the app or service in question brings enough value, they aren’t going to do it.

The danger here for smaller developers is that larger companies can bundle big services into ‘affordable’ bundles. There is probably a larger market for people who will pay monthly for a music subscription, or Adobe Creative Club, or Microsoft Office, or Video on Demand than there is for a weather app.

As Messages grows as a platform, Facebook Messenger pivots to being a platform and other companies are trying to deliver increasingly attractive over the top services; subscriptions are the method they may choose. After all, there is no way Apple is going to allow adverts to infiltrate your Messages. Developers need to monetize somehow. It’s just whether they can prove their value, or bundle packages together.

So developers, when you are thinking about subscriptions with iOS 10, consider:

  1. Do you need a subscription, or are you just wanting to test it?
  2. What are the main subscriptions the user might have?
  3. How much ongoing value are you providing? Do you already have high engagement?
  4. What benefit will the user get from subscribing? More features, or no ads?
  5. Are you going to do a low monthly, or a low yearly subscription?
  6. How are you going to promote and communicate it?

Now excuse me while I go and cry in the corner having worked out how much I’m spending on subscriptions.

 

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