Thoughts on Things' Pricing
May 20 2017
There was no build-up, there was no hype, this week Cultured Code released the latest iteration of Things, the much beloved task manager. Despite the lack of fan-fare, my Slack channels, Twitter streams and RSS feeds have slowly filled with gushing reviews for the update.
I only downloaded the trial yesterday and dumped all my outstanding tasks from my Baron Fig notebook into Thing’s inbox; so I won’t be offering a review just yet! You can take a look at others here: Mac Stories, Beautiful Pixels.
So far, every review has been incredibly positive. Things was the sort of software that always had its die-hard fans, and I didn’t expect a new version to change that. I previously referred to this update as an iteration, which some might find odd. However, in iPhone 7 style, everything in Things 3 is the same and everything is different.
Despite this being a ground-up rebuild incorporating powerful new features, lots of juicy interractions, and possibly the best UI design I’ve ever encountered; it fundamentally feels the same, and very familiar. That, is a great thing!
But the price!
However, I want to talk about the price. So far, the comparatively spendy price tag has been the only criticism that I’ve seen levelled against it.
In the UK, the Mac version will cost £38.99, the iPad £15.99 and the iPhone £7.99. Now, there’s a degree of exchange-rate shenanigans post-Brexit going on here (the US versions cost $49.99, $19.99 and $9.99 respectively), but even so; why is the price an issue?
UPDATE: June 2017 — Yet more funny-business with the exchange rates… The prices are now £48.99, £19.99 and £9.99. I should be clear, there have be no changes to the prices that Cultured Code have chosen, only Apple’s conversion from USD to GBP, based on pricing “tiers”. Even by Apple’s standards, a 1:1 exchange rate seems a little steep!
Unfortunately, whilst Apple’s App Stores have got consumers used to the idea of third-party software, they also instilled the notion that these unofficial apps should be cheap. In the beginning, most apps were either free, £0.99 or £1.99. Of course since then we’ve seen other common prices like £0.79, £3.99 and a few really high-ticket items (relatively speaking).
Now it’s obvious that if the lifetime value of a customer to a developer isn’t enough to buy a coffee - particularly after Apple take their cut - then the App Store is fundamentally a flawed concept, or something needs to change. Something has indeed changed. More apps are becoming free…
The resistance of many consumers to pay an upfront fee for an app, exacerbated with the inability to trial it, has forced many developers to move to a “Freemium” model whereby the app is free, but additional features require an in-app purchase or subscription.
This business model is now widely accepted and even heralded as the saviour for developers previously bound to feast and famine cashflow. The idea being that your product slowly collects subscribers, building month on month, providing a stable income with which to keep improving your software.
The reality for many, particularly if you shoehorned a subscription model into your business when it didn’t really fit, is that you end up with a lot of casual users and a high churn rate.
The reality for Adobe when they transitioned to a subscription model with Creative Cloud was that they lost a lot of lifetime users. They were (and probably still are) the industry standard, but the change in business model coupled with a lot of fantastic alternatives caused a lot of customers to jump ship. I’m sure Adobe are still doing just fine, but they pissed off a lot of loyal customers and opened to door to competition - something that was never an issue before.
Why subscriptions might not work
If a user doesn’t have to make an investment in their tools, then I’d argue they aren’t invested in them, and won’t get the best from them.
That is a bad thing for both the developer and the user. At present, it’s easy for a user to jump from app to app, paying one month’s subscription here, a 30-day free trial there, and so on.
The result is that developers suffer a high churn rate, and are thus exposed to the variable income they wanted to avoid. The users, because they are always moving on to the next best thing, never get a chance to master their tools and see a return on their investment (both time and money).
Even if a user does settle on one app, a subscription model demands that the app’s use continues. Unless that app pays for itself every month, it just becomes a cost and could be deemed expendable. The really low price point makes this issue more acceptable to a user, but requires the developer to sign up users in huge volumes to make any meaningful money.
This is one of the contributing factors to the “I must dominate my market” mentality that is unfortunately so prevalent in startup culture, as explained beautifully in this article about the endless desire for exponential growth by DHH from Basecamp and Rails fame.
Cultured Code’s approach
This is why I was so pleased to see Cultured Code’s licensing and pricing of Things 3. This is their first paid update since it’s debut in 2007. Think about that. This company has not requested any more money from their most longterm, loyal customers in a decade!
When most companies in this industry struggle to go 30 days without wanting to tap their customer’s bank account; 10 years without a paid update is incredible.
This approach inspires confidence because I know that if I do stump up and pay the £63 for the full suite of apps, I probably won’t be asked to pay more in a few months time - something I’ve been burnt by as a company shuffles around it’s subscription tiers. Equally, paying a fair price (and let’s be honest, the asking price is more than fair for the work that would have been put into this) gives me confidence that Cultured Code are making money. Them making money is a good thing, because it hopefully means they’ll still be here in another decade, still releasing beautifully crafted software that is a joy to use.
At this point, even if my free trial of Things doesn’t lure me back to task-management software and away from my Baron Fig notebook, I might buy Things because I believe that Cultured Code’s brave (in this day and age) approach is worth rewarding and worth fighting for!
Software takes a great deal of time, energy, knowledge and money to produce. Great software, that is as polished as Cultured Code’s, takes exponentially longer. That is something that deserves to be rewarded. I think that the price they are asking is totally justified.
Why subscriptions might work
Now, reading this you might just conclude that I hate subscription models. It’s true, I prefer to own my software where ever possible - just like I prefer to buy my cars in cash rather than on finance and will be buying a house rather than renting as soon as I can afford to (something of a fantasy in today’s Britain).
However, I also believe subscription models have their place. They can ruin everything good about a business, but also be the perfect solution in the right case.
An example of this is Basecamp. Their model is a flat rate, monthly subscription of $99. There are no tiers or per-user fees which is so refreshing. So often this sort of business model is riddled with up sells, or necessary features reserved for high-$$$ plans.
I believe that Basecamp works as a subscription because it is fundamentally “of the web”. Yes it has native iOS and Android clients, but the fundamental experience and purpose of Basecamp has the web’s ethos at heart - communication and sharing of information.
I can’t think of how Basecamp would work as regular, paid up-front software. I suspect it wouldn’t.
The difference between Basecamp and Things is their purpose. Things was designed to be the best a personal task manager can be. It could have been built as a web app, even with upfront fees; but why?
Apart from it’s syncing service - Things Cloud, which is a necessary function, but not sole purpose - Things doesn’t need to be “of the web”. It’s a personal app, much like Day One - another great app with a similar business model. The problem it solves is best answered with the gorgeous native apps and the wonderful user experience that Cultured Code have created.
What pricing means
Pricing software has always been difficult. I’m not sure that either the subscription or up-front business model is the one true, correct one. Both have their place.
What I am sure of is that many more companies could be releasing truly great software if certain approaches to software pricing are addressed. The guys at Basecamp and Cultured Code show that two different routes are possible, but as proved by Panic’s issues with building for iOS (see “Challenges”), the platform might be more of an issue. A few years back, they bet big on building a pro-level iOS equivalent to Coda. Unfortunately they only found a very small market, despite feedback being very positive - which is a shame, because I loved their app and love working on my iPad Pro. I wish there was more software of that quality for it, and that’s the issue here.
What we come back to, is that I think the App Store as it currently stands is deeply flawed. It champions, but doesn’t encourage, quality software. The in-app purchase model creates a race to the bottom, where many developers resort to horribly dark patterns just to keep the money coming in - as mentioned in DHH’s article.
Instead, what I’d like to see is the long, and much requested ability to provide paid upgrades to customers, along with free trials. Given that the logic for in-app subscriptions can’t be much different from a 30 day free trial, and that we’re talking about Apple here, this should all be easy stuff to implement.
Apple don’t need the constant revenue they get from taking cuts of little purchases, they make enough selling record number of iPhones every year.
What Apple does need is an iOS ecosystem that is a legitimate operating system for proper work. Ardent iPad-user Federico Viticci said as much in his recent demo of what he hopes iOS 11 could deliver.
“It’s time for Apple to step up their game and continue pursuing the vision for the future of computing set forth in 2015. There’s so much more work to be done with iOS, multitasking, and the redefinition of computing for the multitouch era. The iPad Pro can be a computer for everything, but it needs another leap forward to become the computer for everyone. And that can’t happen without a serious reconsideration of its software.”
— Federico Vitici
For that to happen, Apple need more people like Cultured Code (and Panic) willing to roll up their sleeves and produce fantastic software because they know they’ll be adequately rewarded for it.
At the risk of being overly-dramatic, I’d say the future of iOS relies heavily on incentivising developers and educating users about the true value of great software.
Update: June 2017 — I’ve now bought the iPhone and Mac versions and am loving them. I still maintain the same opinion that I did when writing this article originally. The only thing I’m a little agrieved about, and the reason I decided not to buy the iPad version too, was Apple’s laughable exchange rate of 1:1. It just feels wrong!
If you want to chip in on this discussion, drop me a tweet @jamiedumont