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Making More Outside the App Store
Posted By Paul Kafasis on February 10th, 2017
Kapeli, makers of the developer tool Dash, recently posted about what happened when their app left Apple’s App Store. You may recall hearing about Dash due to the uproar that followed Apple’s decision to remove the well-loved app. Fortunately for Kapeli, the product was already set up for direct purchase, which meant they still had a way to sell it to customers. It turns out that in the first 100 days of Dash being distributed solely by Kapeli, it actually earned more revenue than when it was also sold through the App Store.
Image via https://blog.kapeli.com/100-days-without-the-app-store
There are undoubtedly multiple reasons for this result. Dash received a good deal of publicity as a result of Kapeli’s dispute with Apple, which likely brought in new customers. As well, it seems possible that professional developers are more willing than the average user to look outside the App Store for software. Still, it’s interesting to see how the App Store impacted Kapeli’s revenue.
With the exception of our audio editor Fission, all of Rogue Amoeba’s Mac apps are distributed and sold exclusively through our site. Popular tools like Audio Hijack and Airfoil provide concrete proof that products can thrive while never being sold through the Mac App Store. However, we have one application that followed a path similar to Dash’s. Our charmingly simple audio recording app Piezo was originally distributed in both the Mac App Store and via direct sales, but it has since left the App Store.
After seeing Kapeli’s chart, I was curious about the App Store’s impact on Piezo’s sales. The restrictions and limitations of the Mac App Store ultimately led us to remove Piezo on February 12th, 2016. We’ve now been selling it exclusively via our site for a year. This has provided about as perfect a real-world test case as one could hope for. Piezo’s removal came with minimal publicity, the price has remained constant at $19, and we’ve had no big updates or other major publicity for it in either 2015 or 2016.
So what do the numbers tell us? Here’s a chart showing unit sales for the last four quarters in which Piezo was sold through both the Mac App Store and directly via our website, as well as the subsequent four quarters when it was sold exclusively via direct sale.1
Piezo Units by Quarter
The Mac App Store previously made up about half of Piezo’s unit sales, so we might have expected to sell half as many copies after exiting the store. Instead, it seems that nearly all of those App Store sales shifted to direct sales. It appears that nearly everyone who would have purchased Piezo via the Mac App Store opted to purchase directly once that was the only option. Far from the Mac App Store helping drive sales to us, it appears we had instead been driving sales away from our own site, and into the Mac App Store.
While this chart doesn’t provide specific sales numbers, you can likely see that unit sales did drop slightly in 2016. Piezo’s removal from the Mac App Store does seem to have cost us a small number of sales. However, unit sales are far less important to a business than revenue. Let’s look at another chart, this time showing our revenue for the four quarters before removing Piezo from the Mac App Store, and the four quarters since.
Piezo Revenue by Quarter
In each of the four most recent quarters, Piezo brought in more revenue than it had in the corresponding quarter a year earlier. We earned more revenue when Piezo was available exclusively through our store than when we provided the App Store as another purchasing option.
This result might seem counterintuitive. Piezo’s price remained the same, and unit sales went down, so how could we have earned more revenue? The key to understanding this is remembering the cost of being in Apple’s App Stores — 30% off the top of every sale. Despite making slightly fewer sales, we earned more money by avoiding paying that oversized commission to Apple. Direct sales cost us just a few percent, so each direct sale of Piezo earns almost $5 more than a sale through the Mac App Store. As you can see, that really adds up.
Conclusion
I certainly won’t state that every developer will have this same success if they remove a product from the Mac App Store and distribute it exclusively through their own site. Your mileage will undoubtedly vary.
In our case, however, it’s clear that we were serving Apple, rather than Apple serving us. By removing Piezo from the Mac App Store, we stopped paying a commission to Apple for the many customers who had found Rogue Amoeba on their own. Better still, we were able to improve the quality of the product while simplifying our work considerably. Ultimately, that alone was enough to convince us that leaving the Mac App Store was the right move. The subsequent revenue increase we’ve seen is merely a nice bonus.
Footnotes:
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All eight quarters consist of exactly 91 days, to avoid 2016’s leap day skewing anything.↩︎
Christian Tietze says:
February 11th, 2017 at 2:00 pmCongratulations on the great numbers, and thanks for sharing your findings! I am teaching devs to distribute outside the Mac App Store because Apple doesn’t provide any actual service for the 30% commission.
The MAS is a warehouse of stuff. As you said, people know your work before they buy, because you have to do the marketing anyway, and so the MAS as a convenient distribution platform doesn’t make much sense. It’s not even that convenient for users to use the MAS compared to modern checkout processes. The only benefit of the App Store is trust via social proof from Apple. Then again, if you find an app through numerous blog reviews, it’s very likely that the seller/dev is legit, too.
Well, it’s interesting times!
Cheers,
Christian
ruurd says:
February 12th, 2017 at 3:23 amHah. Nice try but what you do not show is the extra cost incurred from having to maintain your own infrastructure.
dev says:
February 12th, 2017 at 4:35 amAWS S3 + CF cost close to nothing to distribute
Aristotle says:
February 12th, 2017 at 7:14 amruurd: Hah. Nice try, but that’s a sunk cost in a scenario of MAS+direct vs direct-only. ;-) Particularly since Rogue Amoeba already maintain that infrastructure for a bunch of other products that are impossible to ever sell on the MAS. So in the case of Piezo, the costs of the direct sales infrastructure are irrelevant at best.
I will concede though that those numbers would be of interest to an indie who is considering MAS-only as a choice of distribution channels for their app.
Victor says:
February 12th, 2017 at 11:55 amThis all seems ok for developers, but what about customers? What are the options for automatic updates? *That* is the future. Are developers going to invest and create their own solution, just as they misguidedly tried to out-iCloud iCloud? And don’t mention Sparkle. Just ask the Transmission.app developers how that worked out for them. (https://news.ycombinator.com/item?id=11234589)
germ says:
February 12th, 2017 at 12:31 pmUnlike Victor, I couldn’t care less for automatic updates. Let me be more clear: I *don’t* want automatic updates. Sparkle works fine for many developers. What happened with Transmission seems more of a mistake on their part rather than a Sparkle shortcoming.
rfistman says:
February 12th, 2017 at 8:31 pmMAS is a ghost town, getting out is good for customers too because your dev has a better chance of remaining solvent.
Lukas says:
February 13th, 2017 at 4:37 am> In our case, however, it’s clear that we were serving Apple,
> rather than Apple serving us.
I think this is the problem with most of Apple’s ecosystems. For any third-party vendor participating in Apple’s ecosystems, Apple’s goal is to eat up as much of their profits as it can, while still somehow allowing them to survive. This works for mid-sized companies, but it’s often not acceptable for larger companies (Microsoft and Adobe are not going to give 30% of their revenue to Apple), and it kills smaller companies who already start out with low profit margins (that’s probably one of the reasons why you see so few productivity apps on the iPad).
Gerhard says:
February 13th, 2017 at 7:37 amAny perspective on how App Store unit sales might have developed over the course of last year, given an ever increasing user base?
Or is this effect negligible (also given the somewhat narrower target user segment)?
Zac says:
February 13th, 2017 at 9:45 amEverything else being equal I prefer the mac app store. Unless its a big company I think twice about paying direct from the website. A well known company can host their own, its the smaller developers for the mac app store, but Apple changes 30%, its too much for them.
However, the mac app store needs loads of improvement. eg regional settings restrictive, 30% is too much, app discovery, app restrictions, etc
The mac app store has lots of potential and benefits but Apple is just not putting the resources into it.
atom says:
February 13th, 2017 at 10:43 amI hope the mac app store and the windows app store die a fiery death. I do not want a gatekeeper between me and my apps. I want to install whatever I want, even if that means a virus every now and then. Just look at Microsoft’s moves to block Steam and keep apps like it from the Microsoft Store.
NightHawk says:
February 13th, 2017 at 11:19 amOne of the biggest problems I have with the Apple App Store is that there are frankly too many choices presented to the customer. It’s easy for an app to get lost in a category and never even properly evaluated since most people are going to go for programs that people have actually used, not the new kid on the block or the untested app.
Noah says:
February 13th, 2017 at 11:43 am> Everything else being equal I prefer the mac app store.
I’m completely the reverse — I cringe when the mac app store is the only way to download and purchase a program. The app store is such a horrendous piece of engineering and design, and I’d much rather my money go straight to the devs anyways.
I much prefer a simple sparkle-like updater.
And as atom said above, I worry about the app store/gatekeeper killing off all the interesting and creative apps. I appreciate added security only so far as it doesn’t come with substantial restrictions on what I can do with my mac.
Paul Kafasis says:
February 13th, 2017 at 7:08 pmChristian Tietze: We started selling direct almost 15 years ago, and even while distributing in the Mac App Store, our software has always been available direct. I certainly recommend that every developer sell direct via their site, and then consider other venues like the App Store.
ruurd: Given that we were already selling direct, there was essentially no extra cost for us. Further, as others have pointed out, setting up direct distribution and sales is tremendously inexpensive. It’s certainly far, far less than Apple’s 30%.
Aristotle: It’s certainly worth considering what it costs to sell direct. That said, payment processing ranges from about 3-8%, while site hosting (which anyone trying to earn money ought to do anyway), even with downloads, is tremendously cheap. The cost is much lower than Apple’s 30%.
Victor: In our case, due to Apple’s restrictions, we couldn’t provide the quality product we felt our customers deserved. That was the reason Piezo left the Mac App Store. Being outside the store, we can ship bug fixes and new features immediately, rather than waiting days, or even weeks, for Apple’s review process. As far as Sparkle goes, it’s worked perfectly for us (and literally thousands of other developers) for many years. It can be configured to update automatically if you like, or kept off if you don’t (like germ). Transmission’s issues had nothing to do with Sparkle itself.
rfistman: The trend has certainly been apps leaving the store, rather than joining it.
Lukas: I don’t know that the problem is unique to Apple. It’s more a matter of inserting a middleman where one isn’t really needed. Even if Apple’s cut were 20%, or lower, the benefits to us would not be tremendous.
Gerhard: Piezo had been in the Mac App Store since way back at the end of 2011, so it had more than four years’ worth of sales, both direct and MAS-based. Our own userbase has been growing since we got started in 2002. The Mac userbase, well, I guess we don’t know enough to comment on. Apple sold however many million new Macs, but how many actual new Mac users were there?
Ultimately, while I’m sure that a few more people heard of us in 2016-2017 than in 2015-2016, it’s unlikely that had any noticeable impact on sales.
Zac: This sort of feeling is certainly why we were there in the first place. Some customers wish to buy via the Mac App Store, so we attempted to make it work. Ultimately, however, Apple’s restrictions forced Piezo out.
That said, any small company can easily set up their own website and downloads with minimal work. They can also get payment processing setup, via one of many well-known and secure services. Users really shouldn’t hesitate to purchase from a small company, any more than you’d hesitate to use your credit card in a small business.
atom: We certainly agree with keeping systems free and open. If users choose to only use the Mac App Store, that’s unfortunate, but it’s up to them. If Apple or Microsoft ever force users to only use their stores, that will truly be terrible.
NightHawk: The ability to provide a free trial when distributing directly is of great benefit to customers and users alike. We always encourage users to try before they buy, and we’re glad that’s possible.
Noah: You’re definitely not alone in that regard. Here’s hoping that the platform remains open and free for users and developers.
ROMAD says:
February 13th, 2017 at 10:43 pmI’ve seen much faster updates for direct purchases than from the MAS. This is critical if you find a bug; the MAS can take several weeks to release a fix. I prefer to purchase direct rather than via the MAS.
Kudos to Rogue Amoeba and “Death to the MAS!”
pza says:
February 14th, 2017 at 3:47 pmI tried this model with FastCommander, with my own website, own shop webservice backed FastSpring payments. Maintaining these all is a PAIN IN THE ASS. Never again.
Published my new app (SynoTool) to the App Store. From the very beginning there are more installs, maintaining this all is easier, faster (at least for me), and I can sleep without worrying if there are any bugs in my licensing code on client or backend side.
Besides, as a user, I love apps distributed with App Store. I have more trust in Apple, than to developer who does not want to pass Apple security, compatibility validation and usability review.
DirectFTW says:
February 15th, 2017 at 12:34 pmI can’t really imagine what “pain in the ass” pza is talking about. The Mac App Store is the real pain in the ass between dealing with certificates, waiting for Apple reviews to finish and much more.
Selling direct takes a bit more initial setup but once it’s done it’s great. I can talk directly to my customers. I can fix bugs and ship those fixes. I can earn more money. We didn’t have the Mac App Store for years and things worked pretty well. It’s pretty clear we don’t need it now either.