The future of apps will be subscription-based (and that sucks for users)

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Rent your house or buy one? Lease that car or purchase it outright? Over and over in our lives we’re offered these decisions. Now, it looks like a similar dichotomy is gaining support in the software industry, including when it comes to mobile apps: do you want to buy your software now, or pay a little bit each month as part of an ongoing subscription? While there are absolutely benefits to the latter, I’m concerned that as time goes on, users are going to have a decreasing say in the matter, and subscription-based apps will become the norm, to the ultimate detriment of users.

This is a trend that’s slowly been picking up steam over the course of the past decade or two. It’s nothing new to corporate IT departments, who are well familiar with ongoing contracts with their software providers, but for those of us accustom to shelling out for an app once and that being the end of it, this could be a tricky adjustment.

I mention the subject now after hearing last week’s news about Microsoft’s iOS Office app. While it brings iPhone users versions of Word, PowerPoint, and Excel, it only does so as part of an Office 365 subscription. To be fair, there’s a whole lot more you get for your money than just the iOS app, but that’s actually part of the problem. Let’s take a look at some of the benefits and problems with doing business this way.

Updates

app-updatesAs far as I’m concerned, this is the big one. This is going to be how developers try to sell the subscription-supported business model on users.

It used to be that developers controlled how updates arrived. You might release CoolBeanz 2.0 and give users who purchased it free updates to 2.1, 2.2, and so forth, but require the purchase of a new license for when you release the big 3.0 update a year later – maybe give 2.0 users a discount.

That becomes a lot harder when developers are shackled-in to app stores. Now there’s an expectation that customers are entitled to all future updates, and the only way to extract more money from them is either with in-app purchases to activate new features, or to just release future versions of the app under new names. To be fair, the latter is just what a lot of developers do, but we still shouldn’t ignore the very real pressure out there to keep apps monolithic and not splinter things with a new store entry every time a new version is ready.

From a user’s point of view, the existing way of doing things is a pretty nice deal, but what about the developer’s POV? He gets the same amount of money from the guy who buys the app today as he did from the guy who’s been using it every day for the past two years. While it doesn’t necessarily cost him any more to bring older users along for the ride of future updates, it can also seem like a failure to properly monetize their ongoing interest.

Subscription models offer developers much greater incentives to continue with regular, feature-packed updates. With certain types of apps, that’s going to be really attractive to users, and may draw their interest away from more traditionally-sold versions.

It also gives users an out: if the developer starts slacking off on his end, you can always stop making payments.

ios-office-smallBundled Services

This one’s a little tricky, as it can either seem like a great, convenient offer, or an attempt to extract more money from users by overselling them.

Look at Office 365. You get cloud hosted versions of Microsoft’s Office apps, usable from PCs wherever you go, this mobile edition for iOS, and cloud storage through SkyDrive. What you don’t get, though, are much in the way of options. What if you’ve already got an open source office suite you like on the PC, and only really need a mobile app? What if you already use Dropbox or a competing storage locker?

By offering all those services together, companies can create the impression that you’re getting a great amount of value from subscription services, but that value only really goes as far as you make use of things; you’re still paying for parts you don’t need/want.

More and more companies are eying this kind of arrangement. Adobe’s already started a big effort to make all its PC tools subscription only; how much longer before the only way to use Photoshop Touch on your tablet is to pay $30 a month for the full Photoshop CC subscription?

The Balancing Act

Subscription apps are clearly a win for developers, but we’ve got to balance a whole bunch of factors to really understand if users benefit. Sure, there’s the promise of more reliable updates, and if that subscription includes bundled services, there’s a chance that they may end up giving the users a great value.

However, one-size-fits-all is rarely true in the real world, and the odds are that any package deal will either fall short of or exceed your needs – in either case, you’re not getting the best value possible. And while it might be nice to be assured that future updates are coming, is that really a problem in the first place? After all, devs already feel pressure to keep the updates coming in order to encourage good reviews and stimulate future sales.

Maybe most importantly, any subscription app is almost certainly going to cost you more in the long run. This is exactly why they’re so appealing to devs. As a result, at first we might see this behavior confined to premium apps for which, while there may be alternatives, they lack the compatibility levels or polish of their name-brand competition – exactly the position Microsoft and Adobe find themselves in.

App subscriptions can seem very appealing in the right light. Heck, the whole thing may even be more ethical than this pay-once-and-expect-updates-forever attitude we have now. But in the end, it’s likely not going to be doing you any favors.

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About The Author
Stephen Schenck
Stephen has been writing about electronics since 2008, which only serves to frustrate him that he waited so long to combine his love of gadgets and his degree in writing. In his spare time, he collects console and arcade game hardware, is a motorcycle enthusiast, and enjoys trapping blue crabs. Stephen's first mobile device was a 624 MHz Dell Axim X30, which he's convinced is still a viable platform. Stephen longs for a market where phones are sold independently of service, and bandwidth is cheap and plentiful; he's not holding his breath. In the meantime, he devours smartphone news and tries to sort out the juicy bitsRead more about Stephen Schenck!