Conveying the Cost of Software

Milen Dzhumerov wrote a post about sustainable indie software

Two undesirable side effects arise from the unsustainable pricing of apps. Firstly, it creates a low-value perception of software. Even worse, the negative perception is not confined to a particular app or developer but in the mind of consumers, it applies to all apps. After having many conversations with young professionals who possess the means to purchase apps, it’s always the same story: they flat out refuse to buy apps, period. They correctly reason that when there are so many free apps available, there is no reason to pay for software. Except the vast majority of those free apps are unsustainable for their developers and they end up hurting other devs – when your competitor has priced themselves out of existence, there’s not much you can do about it as most consumers are price-sensitive above everything else.

The part about “young professionals with means to purchase apps” rings 100% true in my experience. It seemed very odd to me initially, but now has fully become the norm. When I tell most people that I buy a lot of apps, most people seem perplexed. They are definitely in the “there are plenty of good free apps” camp.

But as someone who creates software for a living I am well aware that these things don’t come for free. Anything that is being given away for free is making money some other way, or isn’t sustainable. Sure there are some apps out there that are hobbies, but most of the good ones are not. Some apps that are free have ads, but in most cases that isn’t enough for a developer to live off of. This doesn’t bother most people though. If their favorite free app stopped working they would go get a different, free replacement. That “endless” supply is what has put in people’s heads that software is easy/cheap to create.

No one ever seems to mention the big guns that perpetuate this thinking though. Twitter, Facebook, Instagram, Vine, YouTube, SnapChat, all of these apps/sites/services are free (for 99% of the functionality). Is the average person really so dumb that they think these companies are doing this out of the goodness of their heart? Sure they set ads, but they are also mining incredible amounts of information, which is then analyzed (and sometimes probably sold) and put to use generating revenue somehow. But most people view these heavy hitters as “free”, and so they can’t understand why some small “app” that does one or two things can cost any amount of money.

The lack of a physical good has always perplexed people. They will watch pirated movies on their company and not think it’s wrong, but they wouldn’t walk into a store and stick a DVD under their shirt. The physical good is the difference there. Nevermind the fact that the physical materials probably cost under $1 to make. Software is the same way. The bit and bytes end up on people’s devices but most people don’t understand what it takes to get there.

Software isn’t free to make. And the fact that people are willing to pay $3 (or a lot more) for a cup of a coffee, but scoff when an app cost 99 cents speaks volumes for how meed up people’s heads are about the lack of physical goods. That is the mindset that somehow needs to change for people to understand the true value of software.