Two interesting articles last week, better together.
First came TheInformation’s1 maiden piece about How Apple Gives Some Apps an Edge (subscription required):
Being featured [in the App Store] can be a developer’s jackpot. Developers say that it could cost them between $100,000 and $300,000 in marketing to buy as many downloads as they receive from being highlighted in Apple’s “Editors’ Choice” section of the App Store or listed as a “top app.” Eyeballs in the App Store are particularly valuable because the store reaches users in the mood to find a new app.
But for developers, the connections yield more than promotional buzz. Developers also get key product advice and access to Apple engineers starting long before a product launch.
Apple, in turn, gets a way to shape the multi-billion dollar app market. The company says the system is designed to find and promote great apps. In practice, the criteria for “great” can include not only a well-designed app, but also whether it includes features Apple wants to push. Those might include whether the app runs the latest version of its iOS mobile operating system or whether it is tailored to international users. It also helps if the app is exclusive to Apple’s App Store.
The next day came news that Cut the Rope 2 was launching in two weeks, and that it would be exclusive to iOS. From VentureBeat:
Misha Lyalin, the CEO of Russian mobile developer ZeptoLab, announced the Dec. 19 release date of Cut the Rope 2 at a press event Thursday night.
The sequel to the best-selling physics-based puzzle game will debut exclusively on iOS devices, at a limited time discounted price of 99 cents. This new adventure has franchise mascot Om Nom embarking on a journey to restore his collection of candies, which has been stolen by a mischievous gang of spiders. Lyalin described the game as hard but still definitely accessible to children, particularly through a story with many animated cutscenes and an interactive Om Nom on the main menu.
To be sure, the timing of the articles was pure coincidence, and perhaps the content of the articles was coincidence as well. But I don’t think so. This is smart business on both sides:
- Apple gets yet another example of a must-have app that is only on iOS. While there is no doubt Cut the Rope 2 will eventually make its way to Android, and probably to Windows Phone and Windows as well, even those launches will simply reinforce the idea that if you care about apps, you ought to buy an iOS device
- ZeptoLab will certainly get massive app store promotion for their launch, guaranteeing a hit. And, when something is a hit on iOS, then it will likely be a hit on Android whenever it finally comes over
The truth is that paying for apps, as Windows Phone is famous for (but not Windows, at least while I worked there as an app store category manager), is very rare, and for good reason: it results in low quality ports and added support costs for the developer, not to mention terrible PR that reinforces a platform’s weakness. But there remain lots of tools in the app store manager’s chest:
- App store promotion can be traded for exclusives (or, in the case of a lower profile app store, ports)
- The withdrawal of promotion can be threatened to retain exclusives. As an app store category manager for Windows in the runup to the launch of Windows 8, I heard this more than once: some marquee developers who were predisposed to support Windows 8 (again, this was pre-launch) ultimately didn’t for fear they would lose favorable treatment from Apple
- Exclusive or desired ports could be promised favorable treatment in marketing
- Platform owners could buy paid marketing on an app’s website or other properties. This is more pertinent to content owners, particularly magazines and newspapers, which have lots of paid marketing for sale
- Apps could be featured in retail stores, or in keynotes and other public events
I have no idea the degree to which Apple (or Google or Microsoft) uses these tools, but I’ve heard various iterations of all of these. The bigger question is where does that leave the small, independent developers?
At a disadvantage, to be honest. App Store promotion, is, as TheInformation details, a bit of a black box that favors large developers.2 And that shouldn’t be a surprise.
The truth is that the app stores are really just that – stores. Your typical grocery store, for example, stocks thousands of items, but the ones with large branded sections or on the ends of aisles aren’t there by accident: there is negotiation and favors traded, and usually money, and the small guys are at a disadvantage. In fact, much more of a disadvantage than those in app stores. At least app stores have unlimited capacity, unlike a grocery store, and algorithmic lists that are outside of human control. Moreover, in my experience, money changing hands isn’t really part of the equation.
This is why, while I have been very critical of Apple’s reticence in enabling sustainable business models, I haven’t really said much about top lists or the structure of the App Store itself. The best means of promoting your app is to do it yourself, and, more importantly, build it with a cost structure that is sustainable.
The vast majority of apps are lifestyle businesses; hoping they’ll be something more – and accepting VC/Angel money to make it so – simply doesn’t make sense. And those with higher aspirations best start valuing marketers just as highly as their engineers.
A quick aside about TheInformation’s business model: I’m actually relatively bullish. TheInformation has only eight employees, a few of whom look to only be part-time. That means costs are low (and the entire venture is bootstrapped), which means TheInformation only needs a few thousand folks to expense a subscription in order to turn a nice profit. There is, in fact, a lesson here that applies to the conclusion of this piece ↩
Microsoft, to its credit, originally refused to play this game at all. The Windows 8 app store was designed to be completely meritocratic; as a category manager I could not guarantee an app would be featured. The idea was this would increase the appeal to said independent developers, placing them on an equal footing with the big guys. Over time, though, this stance softened out of necessity ↩