The double edge sword of subscription mobile apps

comic con 2008: super smart Phone

I think that Apple is playing with a double edged sword when it comes to subscription iPhone apps. One thing that I have hated about Verizon is that they want to charge a fee for everything. Just about every add on app for my non-smart LG phone comes with a monthly fee. non of these apps are valuable enough for me to want to pay every month for it.

The reason that cell phone carriers have been very attractive businesses is because they get reoccurring monthly revenue from most of their customers. Most MBA's eyes get big when they think they can get the same kind of revenue for their business. Lots of people want to sell you service that you have to pay every month to get. Sometime I think business people see a greater ROI by having a subscription business and end up chasing a pot of gold at the end of a rainbow they cannot find.

There are a class of apps that can come to the iPhone with a subscription service that would never come with a one time purchase model. Subscription apps really open up the kind of content based apps we will see. I think this is a good thing for mobile platforms and content providers.

The problem is that you run the risk of turning off your customers. For years now there have been backlash toward subscription services. People are already paying too many monthly bills. While a service like Netflix has done well, subscription music service and sat radio business have not done well. The value proposition has to be in line with customers expectations.

The reason this is a concern for Apple is because they have put themselves in charge of their ecosystem. The iPhone is popular in part because of the app store. It is not an open market, it is a market that Apple guides and controls. If developers start turn off iPhone customers, this can effect how people think of Apple and the iPhone in the end. It is a very tricky situation.

I am in a part of my life where very little is worth another subscription. I was willing to pay for the MLB app, because paying $10 at the start of each season is easier to budget, that playing $2 a month for the baseball season. I guess it is all about how the users thing of their finances.


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