#221: Circular Revenue.
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Hello and welcome to Developing Perspective.
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Developing Perspective is a podcast discussing news of note in iOS development, Apple and
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I'm your host, David Smith.
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I'm an independent iOS developer based in Herndon, Virginia.
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This is show number 221.
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Today is Friday, May 29th.
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Developing Perspective was never longer than 15 minutes, so let's get started.
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Okay, so the main topic that I had planned to talk about today is an extension of my
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start to finish app series.
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It's unfortunately still stuck in review.
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It's not the app that I was talking about making, it's another app that I kind of threw
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together as part of a kind of like behind the scenes thing I was working on and it has
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now been in review for 11 days and so I was hoping to talk about it today but I am not.
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So instead I'm going to talk a little bit about things I'm expecting for WWDC, some
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things to kind of get ready for that as well as a topic that I've been trying to find a
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place to sneak in and so I will be sneaking it in.
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Alright, so WWDC is now I guess about 9 days away, something like that, 9-10 days from
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now, which is pretty exciting.
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I always love going to WWDC.
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This will be I think my 7th consecutive year of being fortunate enough to go, and so that's
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pretty exciting.
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And to be able to have seen the development community around iOS and Mac and Apple develop
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and change over that period, that's pretty cool.
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The thing that I'm most excited about though,
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beyond meeting lots of people,
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getting to see a lot of friends and colleagues,
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listeners, all kinds of people like that,
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Apple engineers, like there's all kinds of people
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that you get to meet at W2DC.
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But beyond that, the thing that I'm most looking forward to
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is that we will definitely have Watch Native applications.
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Jeff Williams at the code conference,
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one of the Apple executives announced that,
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yes, we are definitely getting that next week,
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or not next week, at W2DC.
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And that's always exciting to me,
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'cause they're certainly,
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whenever they do those types of moves,
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they're trying to set expectations,
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make sure people aren't surprised
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or aren't overwhelmed by what happens
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when they actually do their announcements.
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And so I'm excited to hear that.
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Mostly I'm excited to hear that,
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because I think it'll allow us to finally make,
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watch apps that are really good,
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like properly, genuinely awesome.
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I spent a lot of time over the last six months working on WatchKit, and you can get a lot
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done with it, but none of those applications really have the ability to be genuinely truly
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good in the way that there's just some of the things that come out of the latency in
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real life use, the latency between when you tap a button and it acts on it, it feels awkward.
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And mostly, I think honestly, it feels awkward because you're comparing it to your phone,
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which is ridiculously fast now,
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and can do tremendous things.
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The capabilities of like an iPhone 6 or 6 Plus
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is really, really powerful.
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And so when you go to a device
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that feels different than that,
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it is more frustrating.
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In the same way that I'm sure if we pulled out
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a first gen iPhone or an iPhone 3G or something like that,
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it would feel weird and awkward.
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And eventually you may get used to it,
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but it's tricky if you're going back and forth
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to something more capable.
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And so I'm really excited that we're gonna have
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native watch apps.
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It's going to be really interesting, certainly during WWDC, because I'll probably need to
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install iOS 9 Beta 1, or whatever they call it, during the week, because I'm going to
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be wanting to test and try out and work with all the new stuff, which will be interesting,
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both in terms of I'll have to probably update an iPhone as well as my watch to that.
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installing beta first betas is always a little bit dangerous so I would
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definitely be bringing a backup phone for the week should something go horribly
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wrong but it's also kind of exciting to be able to go out and play and like
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build stuff and you hope presumably take the applications I've built and update
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them to that and things that I'm most curious about though on native apps and
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this is coming a lot from my experience in watch kit is how they're gonna handle
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moving data around between the watch and the phone.
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I think that is the area that currently,
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especially in general in extensions,
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is getting feels a little bit awkward and hacked,
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and would be something that I think iOS 9
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will probably address more strongly.
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Things like when we're sending Darwin notifications
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back and forth as ways of updating the state,
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something's gone horribly wrong,
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because that feature is not intended to be doing
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what it is that it's doing.
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I don't think that's what it was built for.
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That's not, I don't think, what Apple intended.
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It's a very old API.
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And so the fact that it works is kind of cool,
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but probably isn't good.
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And so that's something I expect to see in iOS 9.
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And as she's talking about in iOS 9,
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I thought I had yesterday watching the Google I/O keynote
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where they talk about how Android M is going to be
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a bit more of a maintenance release, a bit more cleanup.
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A lot of what their focus seemed to be
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seemed to be talking about bug fixing
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and making things more stable.
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And we've fixed thousands and thousands of bugs.
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And seeing them do that,
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well, I don't think that can obviously,
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that can influence what Apple is going to be presenting
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in 10 days because obviously they've been working on that
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for years or for at least a year, if not more.
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What it does, I think, is give them some nice marketing
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cover in terms of if iOS 9 is more of a maintenance release,
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is more of a we're doing lots of plumbing changes and lots
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of fixing things and trying to make a lot of quality of life
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improvements to the platform rather than introducing
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massive and radical overhauls of things.
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Because it's like Android's doing the same thing.
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Like it might just be that's the cycle
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that we've kind of hit the point in maturity
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where that's what makes sense to do this year.
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And as a developer, that makes me excited.
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If they do a lot of these little plumbing changes and fixes
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and things that make the platform more stable,
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easier to develop with, and just in general,
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better for everybody, that sounds great.
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I'm sure they're gonna have some cool, fun,
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and exciting things, they always do.
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And I've gotta say, one of the things
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that I enjoy most about my job is that feeling
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of sitting in a WWDC keynote room,
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waiting for them to just come out
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and who knows what's gonna happen.
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It's like last year we had Swift,
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kind of just like out of nowhere.
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It's like, here's a new programming language.
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And who knows what the series is, you know?
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It's like, you just never know what they're going to announce
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and where that's gonna go.
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And so it's kind of fun to go and do that.
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And I look forward to it.
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And I also look forward to,
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like I think I've mentioned over the last couple of episodes
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that I always love meeting people when I'm out there.
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So if you would like to meet me,
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by all means, try and find me, reach out to me, whatever.
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Coordinating things ahead of time
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is always a bit awkward at WDC week
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because plans tend to be very fluid.
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But nevertheless, if I see you, you see me, by all means say hi.
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I said if you're wearing any of the Developing Perspective
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shirts over the last couple of years,
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I will definitely try and seek you out if at all possible.
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And otherwise, I look forward to seeing you there.
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So the main topic, though, or the other topic
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that I wanted to talk about today
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is something that's a thought that's
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been kind of mulling around in my brain for a while,
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that I didn't ever have thought of a great venue for it.
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And because the thing that I was playing through today
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still in review, I thought, well, I'll just dive into it.
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This is a great opportunity, not like as a filler, but as something that exists, a topic
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that kind of stands on its own.
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And really what it's about is the current state of mobile advertising.
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So I'm making a non-insubstantial amount of my revenue for my business from advertising.
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A lot of my apps are free with ads, often with free with ads plus in-app purchase.
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you know, do any purchase, the ads go away type of a thing.
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Like it's a fairly standard model that I think you see in a lot of applications.
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And it's a model that I found to be relatively effective that, you know,
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being charging for something up front can work and I'm glad that some of my apps do it.
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But it also closes off your applications to a large swath of users.
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And so it can be awkward.
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And especially also the thing that I like about advertising is that it is, in my experience,
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tends to have better longevity.
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Insofar as I don't have to worry about the questions of upgrade
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pricing and those types of things, I didn't just put--
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my incentive is just to keep people in the application
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and keep them using it, keep it useful to them.
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And I don't have to have these weird discussions in my head
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about, well, do I need to somehow do a paid upgrade?
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Because if they bought up front and I
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have no other venue of getting revenue from them,
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then they're just like, that's awkward.
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And I like that the in-app purchase model,
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the advertising model has,
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in some ways is a subscription.
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It's just a subscription that the user isn't paying for,
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which I don't want to get into all the, you know,
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there's all, it's nuanced and complicated,
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but in general, I like that feeling.
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But something that I've noticed about
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home-built advertising recently is it seems like
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it is increasingly becoming a,
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like a snake chasing and biting its tail.
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Like, there's a very circular and closed nature to it that when I open any almost any application
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that includes advertising, the number of products and applications that are being advertised
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in there is very small and very narrow.
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If you open up like in preparation for this, I opened up an application with iAds in it
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and I just sat there watching it for five, 10 minutes as it flipped over.
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And all I got ads for were Game of War, Clash of Clans, and Google.
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kept cycling between those three.
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And maybe, you know, they're just their ad targeting system
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and it thinks that I'm a great candidate for Google,
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Clash of Clans, and Game of War,
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which probably isn't actually right.
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But anyway, the fact is that's all I was seeing.
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And whenever I see something like that,
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like whenever it becomes very like monocultural-ish,
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it makes me a little nervous.
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As someone who makes money from advertising,
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like that's a little awkward.
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And the reason it makes me awkward
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And the thing that it got me thinking about
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is an observation I remember someone making
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about the original dot-com bubble.
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And there was something that they'd noticed
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that had happened a lot in that time
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was a lot of the activity and the apparent sustainability
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and revenue and things that was coming
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from a lot of these dot-com companies
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was actually just a cycle inside
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of these kind of these new dot-com companies
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sort of moving money between themselves.
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Where company A would buy services or advertising
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or something from company B,
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company B would do the same from company C,
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company C would do the same from company A,
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to grossly simplify it.
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But you'd end up with these circles
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where a lot of money's moving around,
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but it isn't actually generating new and novel value.
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Like it's just some type of investor
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put money in at the beginning,
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and it just sits there cycling around,
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sort of almost like a bureaucracy in that way.
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Like, you can just keep cycling this money around and around,
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and it looks superficially that all these companies are having
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ever-increasing revenues.
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That they're growing, there's lots of money flowing around,
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it looks great, right?
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But as long as the degree to which that is a closed cycle
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is the degree to which that that is extraordinarily precarious.
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Because if at any point, along that circle,
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if one of the companies has a problem
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and pulls out or breaks that cycle,
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then suddenly it very quickly runs dry
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because it's not coming,
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the health and vitality of it isn't coming from the outside,
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it's sort of just internal.
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And so when I see that most advertising
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seems to be coming from these very few products,
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these very few games,
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and especially in a very narrow industry,
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that's worrying to me,
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just as someone who makes their money from advertising.
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And I will certainly confess that it is a bit odd to me
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that I make a substantial portion of my money
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from free-to-play games,
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because they're the people who are buying ads
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in my applications, and that's a bit weird and a bit odd
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and something that I kind of wrestle with sometimes,
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but the reality is they're, at this point,
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they're willing to pay quite a lot of money
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to put their ads in front of my users,
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and it's hard to say no to that.
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So I worry, though, at some point,
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if Clash of Clans or Game of War
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suddenly has, I think most of these companies
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are fairly investor driven.
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If at some point their money runs out
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and their funding runs out,
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or they have to scale back in some way,
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what that will do to mobile advertising rates.
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'Cause I remember when I had was first introduced
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and this was four or five years ago,
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Apple's, they started off the platform
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almost entirely as trying to be a big brand thing.
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Like, the first ads were for the Nissan Leaf and Coca-Cola
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and products like that, like Dove, I think,
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had a campaign for a while, like big national brands.
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And it seems like that didn't quite work out for them.
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In the long run, what happened is that it's become a user
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acquisition platform, that it's a way to try and get people
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out of one app and into another.
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And that's just weird.
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And that circular nature of it makes me nervous.
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And it certainly is encouraging to me in terms of my business
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is very-- I've intentionally diversified dramatically.
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So advertising is a substantial,
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but not the only way that I make my money.
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I make a lot of my money from subscriptions,
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from paid upfront, from in-app purchase.
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There's a variety of things that I do
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so that it's not like if one day this happens,
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I would suddenly be in a really bad spot.
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But it's definitely something that I worry about
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and I think about as I see what's the nature
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of the store as it is now.
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And it's a weird place to find ourselves.
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And it's just something I wanted to mention and talk about.
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I don't have some grandiose conclusion to make,
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but it's an observation that I thought was interesting
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that some of these things in the store
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may be more precarious than they may superficially look.
00:14:20
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When we look at the grossing charts and we see,
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oh wow, these games are making tons and tons of money,
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what is the cost that they are having to spend
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to make that money and is that sustainable?
00:14:31
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All right, that's it for today's show.
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As always, if you have questions, comments,
00:14:33
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concerns, or complaints,
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I'm @_davidsmith on Twitter.
00:14:36
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You can find me there or email me,
00:14:38
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at developingperspective.com. Otherwise, I hope you have a great week. Happy coding and
00:14:42
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safe travels if you're at WWDC and I look forward to seeing you there. Bye.