Under the Radar

00:00:00 ◼   ► Welcome to Under the Radar, a show about independent iOS app development.

00:00:03 ◼   ► I'm Marco Arment.

00:00:05 ◼   ► And I'm David Smith.

00:00:06 ◼   ► Under the Radar is never longer than 30 minutes, so let's get started.

00:00:09 ◼   ► So today we wanted to talk about these interesting changes that were announced about the App

00:00:13 ◼   ► Store today.

00:00:15 ◼   ► As of the time we recorded, they were announced about an hour ago.

00:00:18 ◼   ► Apple has officially recognized the speed of app review times being improved, some updates

00:00:25 ◼   ► to the auto-renewing subscription plans

00:00:28 ◼   ► and some expansions of capabilities to subscriptions

00:00:31 ◼   ► there.

00:00:31 ◼   ► And then number three is they've announced

00:00:34 ◼   ► that search ads will be coming to the App Store.

00:00:36 ◼   ► What do you say we talk about the subscription changes?

00:00:39 ◼   ► Sure.

00:00:39 ◼   ► So as best we can tell-- and there's a great page.

00:00:42 ◼   ► We'll have a link to it in the show notes--

00:00:44 ◼   ► of the what's new in subscriptions

00:00:46 ◼   ► that Apple's laid out.

00:00:48 ◼   ► So there's some good color you get from Phil's interview,

00:00:50 ◼   ► but the real meat of it is on developer.apple.com.

00:00:54 ◼   ► And it seems like there's two or three big deals.

00:00:58 ◼   ► One is that you can now essentially offer auto-renewing subscriptions in any app type.

00:01:05 ◼   ► This used to be really somewhat of a vaguely defined rule,

00:01:10 ◼   ► but you had to be a magazine or a cloud services company or a dating site,

00:01:15 ◼   ► I think were the three things that you could do.

00:01:17 ◼   ► Yeah, it was always--this rule has always been very vague.

00:01:20 ◼   ► It used to only be, like, periodic content.

00:01:22 ◼   ► First, it used to be able to be Newstand,

00:01:23 ◼   ► like in the very, very first implementation of it,

00:01:26 ◼   ► back in 2011.

00:01:27 ◼   ► And then it kind of expanded to be like,

00:01:30 ◼   ► well, it could be Newstand or it could be

00:01:33 ◼   ► a handful of things that had like, you know,

00:01:36 ◼   ► recurring costs like cloud services company.

00:01:39 ◼   ► Like I know Evernote started using it very early on

00:01:41 ◼   ► for their premium service and it was the kind of thing

00:01:44 ◼   ► where you could apply to do it

00:01:46 ◼   ► and you could submit an app that did it

00:01:48 ◼   ► and it seemed fairly inconsistent

00:01:51 ◼   ► as to what got through App Review for that and what didn't,

00:01:54 ◼   ► and what counted as an ongoing service or ongoing content

00:01:57 ◼   ► and what didn't count.

00:01:58 ◼   ► And so it was always very kind of risky

00:02:02 ◼   ► to attempt to do that if you were just an app

00:02:05 ◼   ► that wanted subscription revenue for some other reason

00:02:07 ◼   ► outside of those narrowly defined boxes.

00:02:10 ◼   ► - Yeah, and so now that seems like those kind of criterias

00:02:14 ◼   ► are going away and any app category or type is available?

00:02:19 ◼   ► I think, I mean that honestly,

00:02:21 ◼   ► that's still left a little bit vague

00:02:22 ◼   ► in the language on the page.

00:02:24 ◼   ► It's still left a little bit vague.

00:02:27 ◼   ► It's still kind of sounds like,

00:02:30 ◼   ► okay now any app category can do this,

00:02:34 ◼   ► but you still should be offering some kind of like

00:02:39 ◼   ► ongoing service backing it

00:02:41 ◼   ► or some kind of ongoing content delivery.

00:02:44 ◼   ► So it's still a little like,

00:02:45 ◼   ► so if you just made like a really good calculator

00:02:47 ◼   ► that didn't have a service behind it.

00:02:49 ◼   ► It's not entirely clear that you would be allowed

00:02:52 ◼   ► to subscription price it.

00:02:54 ◼   ► - Yeah, and I think that is probably

00:02:55 ◼   ► the most significant thing to note,

00:02:57 ◼   ► is that it does seem like the,

00:02:59 ◼   ► like on the developer page they're talking about

00:03:03 ◼   ► the types of auto-renewable subscriptions

00:03:05 ◼   ► are for content or for services.

00:03:08 ◼   ► And so it doesn't sound like in the sense of

00:03:10 ◼   ► if you wanted to just say like,

00:03:11 ◼   ► here's my app and you will pay me,

00:03:15 ◼   ► whatever, a few dollars a month, a year to use this going forward, that you would be

00:03:21 ◼   ► able to.

00:03:22 ◼   ► There'd have to be something that you were giving the user on an ongoing basis.

00:03:27 ◼   ► And I'm sure there's many ways around that.

00:03:29 ◼   ► You can just kind of structure something in your app that will check that box.

00:03:35 ◼   ► But it doesn't sound like if you were just trying to do a general purpose, if you want

00:03:40 ◼   ► to use my app, you have to pay. That doesn't sound like that's quite there, but it's

00:03:49 ◼   ► expanding it certainly more, and I imagine as this gets rolled out and people start sort

00:03:54 ◼   ► of pushing the edges of it, we'll have a better understanding of exactly what that

00:03:58 ◼   ► means. But at the very least, more people are going to be able to do subscriptions than

00:04:04 ◼   ► could do subscriptions before.

00:04:06 ◼   ► - Yeah, and it seems like the implementation of them

00:04:09 ◼   ► is certainly improving, but it seems like it's based on

00:04:12 ◼   ► the auto renewing subscription type

00:04:14 ◼   ► that we've had since 2011.

00:04:16 ◼   ► You know, it's still, it isn't like some kind of separate

00:04:19 ◼   ► app store payment structure, like you know,

00:04:21 ◼   ► free versus paid up front, like it's not gonna be like

00:04:24 ◼   ► automatic, it seems like it's going to be a lot more like

00:04:27 ◼   ► what we had before, which is here's an in-app purchase type,

00:04:29 ◼   ► you have to, as a developer, you have to code the support

00:04:32 ◼   ► for this in-app purchase type in your app,

00:04:34 ◼   ► you probably have to write the backing service

00:04:35 ◼   ► to validate them, I'm sure there's gonna be like,

00:04:38 ◼   ► I'm sure there's companies that will do that for you

00:04:40 ◼   ► for a fee, but you are still kind of manually

00:04:43 ◼   ► implementing this in your app, so it's not as easy as,

00:04:47 ◼   ► if you have a paid app, a paid upfront app,

00:04:49 ◼   ► you literally just set a box in iTunes Connect saying,

00:04:52 ◼   ► this app costs X dollars, and you don't have to deal

00:04:54 ◼   ► with anything else ever again, in relation to collecting

00:04:57 ◼   ► money from people, it's not gonna be that easy,

00:04:59 ◼   ► it's still an in-app purchase that you have to code for,

00:05:02 ◼   ► you have to account for in your app.

00:05:04 ◼   ► Ultimately, I think this is the better way to do it

00:05:06 ◼   ► because this gives you flexibility in the app

00:05:08 ◼   ► to do things like, what if you wanna have some amount

00:05:11 ◼   ► of your app's functionality or content be available

00:05:15 ◼   ► without subscribing, and then have some other section

00:05:17 ◼   ► of it be available with the subscription.

00:05:19 ◼   ► Then this allows you to set that balance yourself.

00:05:22 ◼   ► So that, I think, is the right way to do this.

00:05:25 ◼   ► Ultimately, though, this is, assuming that they will allow

00:05:29 ◼   ► all apps to use this, which again, the wording is kind

00:05:32 ◼   ► vague, I think it boils down to this one sentence on the page on their site which says, "Although

00:05:38 ◼   ► all categories of apps will be eligible, this business model is not appropriate for every

00:05:43 ◼   ► app." So I guess it depends on their definition of eligible and appropriate. Does that mean,

00:05:49 ◼   ► does appropriate mean they don't recommend we do it or does appropriate mean they won't

00:05:53 ◼   ► let us do it? So that's again still unknown. But I think subscription pricing is a really,

00:06:00 ◼   ► interesting compromise to what developers have been asking for in the App Store for

00:06:05 ◼   ► a long time, which is like, you know, upgrades, trials, some kind of way to make money from

00:06:09 ◼   ► people ongoing. Because software, as we've discussed before, you know, software, people

00:06:16 ◼   ► expect ongoing functionality. They expect updates. They expect bug fixes. They expect

00:06:21 ◼   ► you to be putting in effort to improve and fix your software over time for them. And

00:06:27 ◼   ► And so when they pay for it, they expect,

00:06:29 ◼   ► not only am I paying for this software to use now,

00:06:32 ◼   ► I'm paying for upgrades forever.

00:06:34 ◼   ► That's basically, as much as developers like to

00:06:37 ◼   ► fight against that with things like different versions

00:06:39 ◼   ► and paid upgrades, the way people perceive it is,

00:06:41 ◼   ► I pay for this thing and therefore I expect updates forever.

00:06:44 ◼   ► And so to try to track the balance between

00:06:48 ◼   ► what users want, which is paying either zero or one time,

00:06:52 ◼   ► and then getting things forever,

00:06:53 ◼   ► and versus what we need, which is ongoing revenue

00:06:55 ◼   ► to fund the development of these ongoing things

00:06:57 ◼   ► and to fix things over time and to improve things over time. Subscriptions, I think,

00:07:03 ◼   ► are a really good compromise there because, look, we're never going to get paid upgrades

00:07:07 ◼   ► in the App Store. We're never going to get automated free trials. They're giving us the

00:07:12 ◼   ► system now. They gave us in-app purchase at first to kind of first semi-simulate free

00:07:20 ◼   ► trials and types of upgrades, sort of, and now they're giving us subscriptions to basically

00:07:26 ◼   ► replace ongoing upgrade revenue.

00:07:29 ◼   ► And there's some ups, there's some downs,

00:07:31 ◼   ► but I think it's pretty clear, this is Apple's message.

00:07:33 ◼   ► This is them saying, we're not giving you

00:07:36 ◼   ► those other things, this is what we're giving you,

00:07:38 ◼   ► figure out a way to make this work for you,

00:07:40 ◼   ► or to make the other stuff that we already offer

00:07:42 ◼   ► through in-app purchase work for you.

00:07:43 ◼   ► And there's, the user side of this, of course,

00:07:47 ◼   ► is a big question mark, but the developer side of this,

00:07:51 ◼   ► I think, is very, very clear now,

00:07:52 ◼   ► is if you want ongoing revenue for people who just use

00:07:58 ◼   ► your app, if you want ongoing revenue,

00:07:59 ◼   ► you need to either find a way to convince them

00:08:01 ◼   ► to pay for a subscription price like this,

00:08:04 ◼   ► or you have to do something like advertising,

00:08:06 ◼   ► where you just kind of automatically

00:08:07 ◼   ► get paid with usage of your app over time.

00:08:11 ◼   ► I don't know, what do you think?

00:08:14 ◼   ► It's definitely a mixed feeling that I

00:08:16 ◼   ► have when I saw this news, because on the one hand,

00:08:20 ◼   ► I'm very glad that something is happening.

00:08:22 ◼   ► I mean, we've talked about, for many episodes,

00:08:26 ◼   ► there's a lot of things that feel not great

00:08:29 ◼   ► in the App Store, and for years,

00:08:31 ◼   ► it's felt like nothing was ever gonna change.

00:08:33 ◼   ► What we had is just what it was,

00:08:35 ◼   ► and that's where it was gonna be in eternity.

00:08:39 ◼   ► And I'm very excited that things are changing,

00:08:43 ◼   ► that whether this is a result of Phil Schiller

00:08:46 ◼   ► taking over the App Store more fully,

00:08:49 ◼   ► or if it was just time for this to happen,

00:08:51 ◼   ► or whatever the reason, something has caused this,

00:08:54 ◼   ► like changes to start happening.

00:08:55 ◼   ► The things are starting to sort of bubble up

00:08:57 ◼   ► in the app store and are changing,

00:09:00 ◼   ► which overall I'm pretty excited about,

00:09:03 ◼   ► 'cause I think things weren't in a great place,

00:09:04 ◼   ► and I mean, you never know,

00:09:06 ◼   ► it could be worse overall in the end,

00:09:07 ◼   ► but I'd rather have, I'd rather sort of find my way

00:09:10 ◼   ► in a store that was evolving and changing,

00:09:13 ◼   ► 'cause in a lot of ways, like being a small developer,

00:09:17 ◼   ► there's a lot of benefits when things are more in flux because I can try things out

00:09:23 ◼   ► with much less overhead and kind of dive in and there's less risk than if I was a bigger

00:09:27 ◼   ► company. I can be a bit more flexible and agile in that way. So overall, I like that.

00:09:35 ◼   ► I'm not sure if an expansion of auto-renewable subscriptions is fundamentally going to improve

00:09:44 ◼   ► the situation in terms of making a viable business in the App Store.

00:09:49 ◼   ► I think the types of applications where it will make sense exist, but they are more and

00:09:56 ◼   ► more limited.

00:09:59 ◼   ► And the thing that I worry about as a user is if this is where software goes, but like,

00:10:07 ◼   ► if all of my software requires an ongoing subscription to have, there's a very, I think

00:10:13 ◼   ► you'll hit a fatigue point with that, where customers won't want to download software

00:10:19 ◼   ► or new software if in their mind it's going to come with it a monthly charge of a dollar

00:10:25 ◼   ► a month or whatever it is on their iTunes account every single month in order to use

00:10:31 ◼   ► any of the apps, and if they stop paying, all of a sudden all their apps stop working.

00:10:35 ◼   ► And so I would imagine a lot of customers would push against that, and in many ways

00:10:41 ◼   ► that could push even stronger pressure towards the just sort of like software being free

00:10:47 ◼   ► model where the expectation is that it'll be free. And the reality is in the App Store

00:10:52 ◼   ► right now, I mean, this is my own experience from trying every business model known to

00:10:56 ◼   ► man is that the most success I've ever had is in the just sort of give it all away for

00:11:02 ◼   ► free and put ads in it model, which I don't love. But I have a hard time believing that

00:11:10 ◼   ► the percentage of my customers who would be willing to pay a non-insignificant amount.

00:11:17 ◼   ► One thing that I'm very curious about is there's a bunch of stuff in here about 200 different

00:11:24 ◼   ► price points and you can specify different price points in different territories and

00:11:27 ◼   ► there's a lot more flexibility there.

00:11:30 ◼   ► I'm really intrigued to see if we're going to get something where the payments that we

00:11:35 ◼   ► we are charging can be lower, or like in a way that charging somebody a couple of dollars

00:11:43 ◼   ► a year may be a bit more palatable than charging them a minimum of 99 cents per month, which

00:11:50 ◼   ► I believe is in the current form of auto-renewing in-app purchases. That's the lowest tier

00:11:56 ◼   ► you could do, is a dollar a month. And maybe I'm being a little hard on my own software,

00:12:04 ◼   ► But I don't think a lot of people would view a lot of what I make as worth more than that,

00:12:10 ◼   ► where they're paying $12 a year for it.

00:12:14 ◼   ► But maybe they would be willing to pay a few dollars a year for it.

00:12:18 ◼   ► And so if there's those types of things, that's interesting to me.

00:12:21 ◼   ► And I'm also quite interested in the way that in-app purchase or auto-renewing in-app purchase

00:12:26 ◼   ► has a lot of flexibility in it, like the actual fundamental API as it exists today and I imagine

00:12:30 ◼   ► going forward, where it has built in support for things like free trials and bonus periods

00:12:37 ◼   ► and things where you can have a bit more flexibility about the way someone is being onboarded into

00:12:44 ◼   ► paying for your software or for your service.

00:12:49 ◼   ► So that's certainly nice in terms of a lot of people have been asking for years for free

00:12:53 ◼   ► trials on the App Store and with in-app purchase you can sort of get there.

00:12:58 ◼   ► how that goes, like, is going to be an interesting thing to navigate an app review of. App review

00:13:03 ◼   ► typically doesn't allow your app to be, have a time-limited free trial, but you can sort

00:13:10 ◼   ► of get around that if your app is tied to an online service, and so will we be able

00:13:15 ◼   ► to work something out there, but, like I said, overall, it's kind of this weird mixed feeling

00:13:21 ◼   ► of, "I feel like I'm glad that this is changing, I really hope this isn't the only change that

00:13:27 ◼   ► we're going to see in the near future, but I think it's a good thing overall that it's

00:13:32 ◼   ► happening. And the reality is, even if maybe only a very particular genre of application

00:13:40 ◼   ► will now be made more viable, maybe that's enough. It doesn't have to benefit me or you

00:13:46 ◼   ► necessarily, but if all of a sudden there's a few hundred developers who can now make

00:13:52 ◼   ► a viable run at the App Store, that sounds great overall.

00:13:56 ◼   ► - Yeah, I mean, and as you said,

00:13:59 ◼   ► I don't think this is going to address,

00:14:01 ◼   ► there are basically two challenges

00:14:04 ◼   ► that developers face for monetization in the App Store,

00:14:06 ◼   ► two big ones, one of which, one of those challenges is

00:14:10 ◼   ► when people do want to give you money,

00:14:13 ◼   ► our options for how to collect that money have been limited.

00:14:16 ◼   ► And this addresses that head on.

00:14:18 ◼   ► This gives a lot more developers a way to collect money

00:14:21 ◼   ► in a different way that might be a better way

00:14:22 ◼   ► that might earn them more over time.

00:14:24 ◼   ► And the second challenge that developers face

00:14:27 ◼   ► with monetization is that there's just so many other apps

00:14:30 ◼   ► out there that it's hard to convince people

00:14:32 ◼   ► to pay anything for your app if there's a million

00:14:34 ◼   ► other free ones that do something close enough.

00:14:37 ◼   ► And this is not going to address that at all.

00:14:41 ◼   ► I do kind of argue, though, in general,

00:14:44 ◼   ► that that's not really Apple's problem.

00:14:46 ◼   ► That's our problem as developers.

00:14:47 ◼   ► That's just the market.

00:14:48 ◼   ► The market is full of competition and full of alternatives.

00:14:52 ◼   ► And if somebody else can offer the same thing for us

00:14:55 ◼   ► that we can for cheaper, then good on them.

00:14:58 ◼   ► That's their prerogative.

00:15:00 ◼   ► And so I think this is Apple doing what they can

00:15:04 ◼   ► to help apps that are worth paying for

00:15:06 ◼   ► earn more money or collect money more easily

00:15:10 ◼   ► and to solve ongoing revenue in a new way.

00:15:15 ◼   ► Which before we only had, basically we had crappy ways

00:15:18 ◼   ► to do it before and now we have a less crappy way

00:15:20 ◼   ► do it potentially. I have in the past written about how much I didn't like the implementation

00:15:25 ◼   ► of auto-renewing subscriptions. I'm reserving judgment of this new one until I see it and

00:15:31 ◼   ► possibly even use it for my subscriptions. We'll see. But they say they're changing it.

00:15:36 ◼   ► This is like Subscriptions 2.0 they're saying. So I'm willing to give it a shot. We'll see

00:15:41 ◼   ► if it's improved in meaningful ways. It sounds from the language on the page that it has.

00:15:47 ◼   ► So I will wait and see on that.

00:15:49 ◼   ► Before we quickly leave this topic,

00:15:51 ◼   ► the other thing to talk about on the subscription front

00:15:53 ◼   ► is that they're changing their revenue split.

00:15:56 ◼   ► That they are, so normally their revenue split is 70/30,

00:15:59 ◼   ► Apple gets, we get 70, Apple gets 30.

00:16:02 ◼   ► For auto-renewing subscriptions of this new type,

00:16:06 ◼   ► or all actually, for auto-renewing subscriptions,

00:16:08 ◼   ► they're changing the split from 70/30 to 85/15

00:16:13 ◼   ► after the first year.

00:16:15 ◼   ► So any subscriber you've had for more than a year,

00:16:17 ◼   ► you will start to earn more from them.

00:16:19 ◼   ► You'll start to earn 85% instead of 70%.

00:16:22 ◼   ► So this is basically incentivizing you to create,

00:16:26 ◼   ► if you have a way to make money from people over time,

00:16:30 ◼   ► this is incentivizing you to both use this system

00:16:33 ◼   ► for doing that and to make something that is worth

00:16:37 ◼   ► people subscribing to for more than a year.

00:16:40 ◼   ► And that's kinda cool.

00:16:41 ◼   ► And it's kinda cool to see, you know,

00:16:43 ◼   ► This is the first exception to the 70/30 rule, at least that's been publicized in the history

00:16:50 ◼   ► of the App Store.

00:16:51 ◼   ► I was able to find an article on, I think it was Recode that I'll link to in the show

00:16:56 ◼   ► notes from back in April that said that some of the video services on the Apple TV were

00:17:02 ◼   ► getting this 85/15 deal right up front as part of the negotiation with Apple.

00:17:07 ◼   ► But other than that, I have never heard of any exceptions to the 70/30 split.

00:17:11 ◼   ► So I think this is interesting, and it's interesting to consider too, like, where Apple might go

00:17:15 ◼   ► with the 8515 option in the future. They can use this as a way to incentivize development

00:17:23 ◼   ► in a certain way or on certain platforms that need help. So for instance, if Apple TV isn't

00:17:28 ◼   ► getting enough developer attention, they could say, "All right, now everything on Apple TV

00:17:31 ◼   ► is 8515." If they wanted to incentivize people to go to the Mac App Store, they could say,

00:17:36 ◼   ► "All right, now all Mac App Store apps are 8515." So something interesting to consider

00:17:40 ◼   ► is using this new lower commission, basically,

00:17:45 ◼   ► so we make more money, as a way to incentivize

00:17:48 ◼   ► different development or apps on different platforms

00:17:50 ◼   ► that need incentives to spur development.

00:17:54 ◼   ► - Exactly, and I think the actual impact of this

00:17:58 ◼   ► in this narrow case is it's nice.

00:18:01 ◼   ► I mean, I guess if I had a subscription

00:18:02 ◼   ► that had more than a year's long subscriber base,

00:18:07 ◼   ► I'd love it.

00:18:08 ◼   ► One day my revenue just goes up a little, but by far the more fundamental thing that

00:18:12 ◼   ► this is really intriguing with is it's the first sort of chink in the, like, "Well, it'll

00:18:19 ◼   ► always be 70/30 for everything forever."

00:18:23 ◼   ► And if that's no longer true, and it's demonstrably not true, that in this particular case they're

00:18:28 ◼   ► changing the split, what else could they change the split on?

00:18:31 ◼   ► Like you said, they can incentivize whatever they want, and that's intriguing.

00:18:36 ◼   ► You could imagine things where it's a different revenue split for the first revenue you make

00:18:42 ◼   ► in a year to try and help smaller developers.

00:18:47 ◼   ► You could imagine trying to encourage people to different platforms, to try different,

00:18:51 ◼   ► incentivize different business models.

00:18:52 ◼   ► There's all kinds of things that not having it be strictly 70/30 everywhere can certainly

00:19:00 ◼   ► make the imagination run wild with.

00:19:02 ◼   ► And so it's certainly a good thing.

00:19:05 ◼   ► I don't think it's a me, like if your business wasn't viable at 70/30, having to wait a year

00:19:11 ◼   ► for it to switch to 85/15 to become viable seems a little bit of a stretch.

00:19:17 ◼   ► But it's certainly, you know, I'll take it.

00:19:19 ◼   ► It's better than nothing for sure.

00:19:21 ◼   ► Our sponsor this week is Braintree.

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00:20:05 ◼   ► That's, once again, BraintreePayments.com/radar.

00:20:09 ◼   ► Thanks to Braintree for sponsoring our show once again.

00:20:12 ◼   ► All right, so let's talk about App Store search ads.

00:20:15 ◼   ► This was rumored a few weeks or months ago,

00:20:18 ◼   ► and now it apparently is real.

00:20:21 ◼   ► They are really doing App Store search ads.

00:20:23 ◼   ► And so what do you think?

00:20:26 ◼   ► I'm not delighted, that's for sure.

00:20:31 ◼   ► The things that I think is so good at painting a word picture, as they say, for what's happening is in the App Store, when you go to the search tab, and you type in what you're looking for,

00:20:43 ◼   ► there will now be potentially an ad at the top of that screen.

00:20:49 ◼   ► You can get an example of this if you go to the search ads page in our show notes.

00:20:53 ◼   ► And the placement there is going to be based on an auction and a combination of who's willing

00:20:59 ◼   ► to pay the most for that spot, as well as some vague relevance metric.

00:21:05 ◼   ► But essentially people are going to be able to pay money to appear in the App Store search

00:21:09 ◼   ► tab at the top of the results, which is a pretty big deal.

00:21:16 ◼   ► Like Apple even says on their page that about 65% of downloads come from searching in the

00:21:20 ◼   ► App Store.

00:21:21 ◼   ► So a substantial majority is going to be coming from there.

00:21:27 ◼   ► And the things that come to mind first when I see this is this really is unfortunate for

00:21:32 ◼   ► apps that are currently the second search result for a particular term.

00:21:36 ◼   ► Because they're going to fall off the screen.

00:21:38 ◼   ► Because previously, like back in the old days, when you did a search, you would be able to

00:21:41 ◼   ► see maybe like five or six results at once.

00:21:44 ◼   ► Then they switched to the cards view we have now where your first two screenshots or a

00:21:48 ◼   ► screenshot and your app preview are shown on that first screen, and so they take up

00:21:52 ◼   ► a lot more vertical space, and so you can see the top result and the teeny little bit

00:21:59 ◼   ► of the second result, and now if there's an ad, you're only ever going to see that top

00:22:03 ◼   ► result and the paid ad.

00:22:05 ◼   ► So that's a little unfortunate, because I've definitely seen in my own apps where if you

00:22:10 ◼   ► fall off that first page, like if the user has to scroll, it's a substantial reduction

00:22:16 ◼   ► in user interest, views on your page, et cetera.

00:22:20 ◼   ► So that's a pretty big deal.

00:22:22 ◼   ► If now only two apps are gonna be shown

00:22:25 ◼   ► in the initial search screen,

00:22:28 ◼   ► one of them is paid to get there

00:22:29 ◼   ► and the other one is just the top result.

00:22:31 ◼   ► So if you're the top result, like hooray,

00:22:33 ◼   ► things are looking good for you.

00:22:35 ◼   ► If you're the second result or below, it's getting worse.

00:22:40 ◼   ► And then there's just the fundamental thing about it

00:22:42 ◼   ► when I look at it, it feels weird

00:22:45 ◼   ► to have to pay to show up in search rather than search just being really relevant and

00:22:54 ◼   ► helpful.

00:22:55 ◼   ► And I can see the areas where something like this is helpful, where if you're launching

00:22:59 ◼   ► a new app and you're never going to be the first search result on your first day, and

00:23:05 ◼   ► so you want to try and find your way into that, like you can do a big spend on that

00:23:09 ◼   ► first day and hope that really helps your launch, and that sort of makes sense.

00:23:15 ◼   ► And it makes a lot of sense, I suppose, for somewhat generic terms.

00:23:19 ◼   ► But what I worry about a lot is how they're going to police and manage, you know, when

00:23:26 ◼   ► someone searches for a specific app.

00:23:28 ◼   ► You know, so someone goes into the App Store and searches for pedometer++.

00:23:33 ◼   ► And my competitor, like right now, if you go into the App Store and search pedometer++,

00:23:37 ◼   ► I'm the number one result, which intuitively makes sense.

00:23:42 ◼   ► But if I, in the future, you do that search, the top result is going to be a competitor

00:23:46 ◼   ► of mine who wants to be placed on the top of there.

00:23:52 ◼   ► That feels really weird.

00:23:53 ◼   ► And am I going to have to pay for that?

00:23:55 ◼   ► Like am I going to have to start paying like protection money to keep people searching

00:24:00 ◼   ► for my app's name relevant to me?

00:24:04 ◼   ► You know, so that I would be the both, I guess, the paid result and the natural result?

00:24:10 ◼   ► Like, that starts to feel really weird and awkward and not great, but I mean, I don't

00:24:17 ◼   ► know, if this is the new reality, then I'm just gonna deal with that and try as best

00:24:24 ◼   ► I can to work it out, work it to my favor.

00:24:27 ◼   ► But I definitely have a lot more apprehension about this than I do about the subscriptions

00:24:31 ◼   ► change.

00:24:32 ◼   ► Honestly, I'm excited about search ads, because if you look through their page, it seems like

00:24:37 ◼   ► more complicated and both more simple and more complicated than what I would have guessed.

00:24:42 ◼   ► It is auction based, which I think is good. And if you look, they have like a little screen

00:24:46 ◼   ► shot of the interface to buy one of these ads. And they say also like, it says, ads

00:24:53 ◼   ► will only be shown if it's relevant to the search query. If an ad is not relevant to

00:24:56 ◼   ► what the user is looking for, it will not be shown regardless of how much you're willing

00:24:59 ◼   ► to pay. So that means it sounds like they're going to try to make it impossible for you

00:25:04 ◼   ► to keyword spam in a way that would be kind of odd

00:25:08 ◼   ► or uncomfortable or inappropriate.

00:25:11 ◼   ► I'm curious to see how that works out in practice.

00:25:12 ◼   ► That sounds really great if it works.

00:25:14 ◼   ► And also it looks like you can kind of let them

00:25:18 ◼   ► kind of place you automatically if you want to

00:25:21 ◼   ► or you can add in certain keywords that you want to bid on also.

00:25:25 ◼   ► But it seems like it's a fairly high level buying process

00:25:29 ◼   ► rather than a low level.

00:25:30 ◼   ► All right, whenever you just search for this exact string,

00:25:33 ◼   ► I will pay up to $5 to be on that first spot.

00:25:36 ◼   ► It isn't quite that rigid or that specific it looks like.

00:25:41 ◼   ► So I am really curious to see how they do this.

00:25:43 ◼   ► As a developer, right now it's like,

00:25:46 ◼   ► okay, well right now OverCached is growing

00:25:48 ◼   ► at a rate that's okay, but I'd like it to grow faster.

00:25:50 ◼   ► I'm willing to pay a little bit for that.

00:25:52 ◼   ► How do I do that?

00:25:53 ◼   ► I mean, the App Store is the perfect,

00:25:55 ◼   ► like App Store search is the perfect place

00:25:57 ◼   ► for me to do that, as far as I know,

00:25:59 ◼   ► before I've ever done it.

00:26:01 ◼   ► It seems like it'd be the perfect place to do that.

00:26:03 ◼   ► I'm willing to pay money if somebody searches for podcasts

00:26:06 ◼   ► to be in that top slot.

00:26:08 ◼   ► I'm willing to try that.

00:26:11 ◼   ► And so to have this new option to grow my app,

00:26:14 ◼   ► if it's done tastefully, which it looks like it might be,

00:26:17 ◼   ► this honestly looks very promising,

00:26:19 ◼   ► the way on this page they've set up here,

00:26:21 ◼   ► I would love to have that option.

00:26:23 ◼   ► And it looks like it's probably not going to

00:26:26 ◼   ► make it impossible for other apps to get discovered

00:26:28 ◼   ► because it's so limited to what people can buy and what portion of the screen is devoted

00:26:34 ◼   ► to this ad. I think it looks like it's going to be good, but we'll see. I think it's going

00:26:39 ◼   ► to take a lot of experimentation of actually trying the system out, spending maybe a few

00:26:43 ◼   ► hundred dollars buying some ads first and see what works, what doesn't. There's a lot

00:26:47 ◼   ► of ways to advertise for apps and most of them don't work very well. This one might

00:26:52 ◼   ► work, so I'm excited. I think this could be really good.

00:26:56 ◼   ► And there's definitely, like we've said with all of us, I love that they're trying something,

00:27:00 ◼   ► that they're not. Like, that part of it is good. And sort of unequivocally, I would rather

00:27:07 ◼   ► things like this exist and make me a little nervous than things not exist at all and make

00:27:12 ◼   ► me be even more nervous that this platform that I make my living on is just stagnant.

00:27:17 ◼   ► So I'm definitely excited that it exists. And it's interesting, too, to think about

00:27:22 ◼   ► how having to think about all my customers from the perspective of what are they worth

00:27:28 ◼   ► to me is like the immediate thought. Maybe this is just me and my numbers brain where

00:27:33 ◼   ► I think about these things. But essentially what it comes down to is I now have to, in

00:27:37 ◼   ► a very concrete way, say, "What is a customer worth to me?" Because I can now, in many

00:27:43 ◼   ► ways, pay that amount of money to acquire that customer, or at least have a promising

00:27:50 ◼   ► venue with which to acquire them. And so if I can say, "A new user is worth 50 cents

00:27:55 ◼   ► to me," and I can come into the search ads page and pay 49 cents for that user, I'm

00:28:04 ◼   ► coming out ahead. As soon as I can understand and wrap my arms around what like, these are

00:28:09 ◼   ► all like the terms like the average value of each customer and those kinds of things,

00:28:14 ◼   ► once I can do that, I can sit down and say, "Okay, I'm just going to pay, as long as

00:28:18 ◼   ► as I break even or slightly come out ahead, I can keep putting, you know, it's the end

00:28:25 ◼   ► of this weird cycle where I can just keep taking money out of the app and putting it

00:28:28 ◼   ► in to a point, and maybe the value of my customers will go down at a certain point as you do

00:28:33 ◼   ► that.

00:28:34 ◼   ► Like, maybe there's a dilution effect, but overall it certainly is a very intriguing

00:28:38 ◼   ► way, and maybe it's a good thing for us as app developers to be forced to think of our

00:28:44 ◼   ► of our apps in a more tangible business sense in that way.

00:28:48 ◼   ► That it isn't this kind of vague, crafty thing

00:28:51 ◼   ► that I'm sort of like, I don't really know the value of,

00:28:54 ◼   ► it's kind of like, I make this stuff

00:28:56 ◼   ► and I put it out in the world.

00:28:57 ◼   ► It's like, no, I can sit down and say,

00:28:59 ◼   ► I get this much revenue from this many users,

00:29:01 ◼   ► that means each user is worth this much to me,

00:29:04 ◼   ► so I can pay up to this amount to acquire new ones.

00:29:07 ◼   ► And that's maybe a good thing for us to have to think about.

00:29:10 ◼   ► - And I think it can help newcomers,

00:29:12 ◼   ► like everyone's a little bit worried,

00:29:13 ◼   ► what's this gonna do to the little guys,

00:29:15 ◼   ► I think this will actually help newcomers

00:29:18 ◼   ► give them an option that if they wouldn't otherwise

00:29:20 ◼   ► be visible for a search query,

00:29:22 ◼   ► give them a way to get in there.

00:29:24 ◼   ► You know, like that, I think this actually

00:29:26 ◼   ► could be really good if done right.

00:29:28 ◼   ► And it looks pretty promising so far, so we'll have to see.

00:29:31 ◼   ► All right, and finally we wanted to very briefly talk

00:29:33 ◼   ► about the app review times being formally acknowledged.

00:29:37 ◼   ► You know, we said that this would be great

00:29:40 ◼   ► if this sticks around, and one of the ways

00:29:42 ◼   ► to make sure it'll stick around is if Apple formally acknowledges it in public, and they

00:29:46 ◼   ► did. So, Fast App Review is probably sticking around, and that's great. Thank you for listening

00:29:52 ◼   ► everybody, thanks to Braintree for sponsoring, and we'll talk to you all next week. Bye.