App.net pricing changes

http://blog.app.net/blog/2012/10/01/app-net-pricing-changes/

by eik3_de • 14 years ago

96 91 14 years ago

blog.app.net

k-mcgrady3• 14 years ago

I've never thought app.net was a good idea for many reasons but I think this is a good move. Introducing a monthly plan is the smartest thing they could have done. With so many yearly plans starting at the same time (when it launched) they could have seen a big drop in users as people reevaluated their decision to purchase in a years time.

With the $5 monthly fee I think people are more likely to continue paying for it - there is no time where they will be forced to reevaluate the value the service provides.

samspot• 14 years ago

I might be an atypical consumer, but I re-evaluate monthly subscriptions quite often, usually with a recurring "Cancel X?" reminder on my calendar.

brianwillis2• 14 years ago

Combined with the bonus time I got for signing up early, my renewal date is now in April 2014. That $50 went a long way.

tisme• 14 years ago

I think you will only be able to say how long it went when it expires.

rbreve• 14 years ago

app.net should be free for developers

k-mcgrady3• 14 years ago

Why? Developers will make money off it, the whole idea is that developers will never get screwed by app.net, and they introduced a developer incentive program to help compensate developers. If you're interested in the platform how is that not worth $5 per month?

catenate• 14 years ago

It's bad enough I spent $50 to read it. I'm not going to pay $50 more just to mess around with trying to create an app for it. It should be free with membership to create an app for it, and charge the $50 when the app has noticeable traffic.

drgath6• 14 years ago

Where is the guarantee that developers will -never- get screwed by App.net? Especially since the barrier to entry is $100? The DIP is a nice addition that will help those with solid ideas out of the gate, but they are still greatly restricting the developer pool by a pay-to-play model. Along with that, I still have seen no compelling reason to pay $5/month to be a member of a social network where there are sub-20k users who (I assume?) barely use the service.

App.net is just capitalizing on those annoyed with Facebook/Twitter developer policies. Great for their bank account and a really smart idea, but I still don't see value for anyone else. As someone else once said, "App.net is a social network for people who have $50 to show-off that they have $50 to blow." That's not a party I feel compelled to attend.

I'm open to a convincing argument though.

mootothemax• 14 years ago

Funnily enough I'm of the opposite mind: users free and developers paying something like $50/month. I'd imagine placing such a price barrier there would vastly cut down on the abuse that twitter, for example, has to put up with.

protomyth• 14 years ago

What abuse from developers does twitter have to put up with?

eik3_de2• 14 years ago

The current number of users can be found at http://recentusers.com/

Homework for the bored hacker: create a graph with user-ID and days. The IDs are sequential integers. See https://github.com/appdotnet/api-spec/blob/master/resources/...

iamdann2• 14 years ago

> If you are an existing member, you should have received an email from us explaining the extra time that has been added to your subscription.

Did anyone else not receive this (yet?)?

tolmasky• 14 years ago

I just did

eik3_de2• 14 years ago

They're working on it, see https://alpha.app.net/berg/post/597112

iamdann2• 14 years ago

Thanks. Just got mine, too.

SubFuze• 14 years ago

Quick! Someone register http://ihave36dollars.com/

untog• 14 years ago

Someone already got http://ihave5dollars.com.

kmfrk2• 14 years ago

Maybe I'm weird, but I like $35.99 much better than $36.

david_shaw• 14 years ago

> we are dropping the Member price from $50/year to $36/year.

I think this is a great move.

We see a lot of posts on HN about raising the price to increase your userbase, but $50 was too high for a product in such an early release stage. Great for those die-hard early adopters (probably the people after whom Dalton was chasing), but terrible for the everyday Twitter user who is tired of the horrific signal-to-noise ratio on that service.

That said, my opinion would be that $24/year would be even better for an annual subscription. $2/mo is a lot of money for a "Twitter clone," but is cheap enough that it would be easy to convince your friends or colleagues to sign up. $36 might have hit the price point that I'll give it a shot as a (relatively) early adopter, but I'm not sure. $5/month, almost double the annual subscription fee, is too much for a thirty day trial run.

I'm one of the (few?) believers that app.net can really take off. I've tried Twitter, and while I'm relatively active, I can't help but feel that I'm lost in the oft-cited "echo chamber." I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.

Congrats to Dalton for lowering the price in what must lead to hugely increased participation.

drgath6• 14 years ago

> I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.

I'm curious... Considering your version of Twitter only consists of who you follow, why do you believe it would be better if those same people were elsewhere?

JeremyMorgan• 14 years ago

I think it will be better simply because spammers can sign up for hundreds of Twitter accounts and spam like crazy. When they get booted they just re-sign up. Doing so at app.net means paying $36 bucks, far less likely.

That goes for normal people too, when they pay something they tend to respect it a bit more. Forums have been doing this for years.

ErikHuisman• 14 years ago

Call me crazy but a lot off people on app.net sound like they are participating in some kind of pyramid scheme. "Just invest some money and your time and app.net will be awesome. I'm having a great time, you'll have to believe".

Lowering the price to $36 after the initial "kickstarter" doesn't scream success to me. If it is that good people would have joined en masse for $50, no?. Will the price be discounted again in two months after everybody who's willing to pay $36 has joined?

FireBeyond• 14 years ago

Agreed. I'm not sitting here thinking "Oh, well, $50? Not interested... wait, only $36, count me in, then!"

It's like a more desperate grab for customers, but unwilling to admit that the model may not be right.

ben10402• 14 years ago

If you buy the $36 (formerly the $50) plan can you get a prorated upgrade to the $100 developer plan later?

quartus• 14 years ago

Yes you can.

brianwillis2• 14 years ago

Instructions on how to do this: http://support.app.net/customer/portal/articles/760978-how-d...

ben10402• 14 years ago

Awesome, thanks. I feel more inclined to try it out if I know that I won't have to completely re-buy an account when I inevitably want to tinker around with the developer side of things.

wilfra• 14 years ago

I'll sell my account for $35.99.

epscylonb• 14 years ago

The developer plan is still $100?.

I never really understood this, it seems more logical to me to give all members the developer perks. Most of the users won't use them, and those that do are helping to promote the app.net service and get new subscribers.

rexreed5• 14 years ago

The bar is set somewhat high to limit the proliferation of poor and mediocre apps, rather than to encourage that. They want "serious" developers (at least for now...) and the price point is set to weed out lower quality apps that can hurt the nascent network.

eps2• 14 years ago

Allow me to make a bold predication - the App.net will be done in a matter of months. Even if it becomes absolutely free.

The reason is Tent. If Tent drops the ball and doesn't fully execute the idea, someone else will. Their idea is bigger, better and far better maps onto the interest of various 3rd parties (such as hosted service providers) that wouldn't hesitate to support it. Commoditizing the social services is a great idea with balls and vision. Creating a paid Twitter clone is not.

jonursenbach• 14 years ago

I thought that the whole point of App.net wasn't to build just a Twitter clone, but something that you could build any sort of social service on top of.

mtgx• 14 years ago

A link describing Tent, for those who haven't heard about it:

http://www.informationweek.com/development/open-source/tent-...

ihuman• 14 years ago

I'm confused. How is tent different than something like StatusNet?

wmf2• 14 years ago

2010: App.net will be done in a matter of months; the reason is Diaspora

2009: App.net will be done in a matter of months; the reason is OneSocialWeb

2005: App.net will be done in a matter of months; the reason is Appleseed

Why is this time different?

tobylane2• 14 years ago

Because this is the first year I've heard of App.net and so many things nowadays fail once its had a moment of popularity? Tent is an improvement on twitter, which we want. Jabber is an improvement on msn which noone is running away from.

illicium• 14 years ago

2012: Twitter/Facebook will be done in a matter of months; the reason is App.net

Yawn.

thechut• 14 years ago

This doesn't make any sense. AFAIK App.net did not exist until 2012. Someone correct me if I am wrong.

teawithcarl3• 14 years ago

Tent is great. Love it. 5-6 loosely integrated infrastructures will replace Facebook, Twitter, G+ (ad model) over time. App.net is one of those infrastructures.

Please get off the "twitter clone" smackdown ... it's lame. App.net is a trustworthy "blackbox" which allows ANY social construct. It dovetails with Tent.

People are building Tor concepts, non-Zynga collaborative games, new messaging protocols, etc in App.net ... beyond twitter is easy. Indeed, it's hard to keep up with all the API enhancements, and the new developer ideas. My personal goal inside App.net is a construct which brings down the GFW (firewall) of China. (Im fluent in 中文, 25+ years).

No advertisements, paying developers well. Integrity about the future ecosystem. With a $1 million in the bank, one of the best geek hangouts on earth, and world-class integrity ... it ain't going away in months.

You'd be better off predicting that it's a heady time for new social protocols.

adlwalrus• 14 years ago

What's your concept for bringing down the GFW? I'm very interested. Perhaps I could even help you.

pi18n• 14 years ago

> People are building Tor concepts, non-Zynga collaborative games, new messaging protocols, etc in App.net ... beyond twitter is easy.

I don't get it. What's the advantage of this over regular internet? You use someone else's servers?

jasondavisfl• 14 years ago

Tent is a great idea on PAPER, in the real world it is just too slooooow. Just my opinion hopefully I am wrong

zoul• 14 years ago

Tent can't be slow, it's a protocol.

ChuckMcM3• 14 years ago

I'll make an equally bold prediction, Tent will fall on its face while App.net powers on into the future.

My reasoning is that it reaches too far without a safety net of a business model. Assuming Dalton is being truthful in his post, he's not cutting prices because he "didn't get traction" he's cutting prices because his business model is out performing his expectations, and rather than go for a higher net early on he's re-investing that margin into growing the user base.

Tent is going 'old school' like the old IETF protocols, that means waiting for adoption, having a variety of implementations, establishing a consensus, moving forward. That works great in a green field situation, but this isn't it. Look at the OpenMoko effort, free Phone OS, build it and they will come? No. Reaching too far without a model to nourish early adoption and growth. Influential? Sure but killer? Not so much.

Dalton has something which Tent does not, people willing to spend money to use it. That is why I think Tent will be a memory long before we see the end of App.net.

EnderMB2• 14 years ago

A less bold statement will be that they both fall flat on their asses.

The HN/Reddit crowd is still a fairly closed crowd and no one else I know has even really mentioned App.net. Any time I bring up App.net it's met with the same "Twitter clone" skeptics.

I think it's a decent idea, but it's not really solving a hard problem. It's not feeding off of demand for a problem, but off of popularity from the HN hivemind; a crowd known for following trends over execution. I'm just a developer so I don't know much about running a business, but I cannot see how this can be sustainable when tech crowds are prone to move onto the next thing so quickly.

eps2• 14 years ago

I don't argue that Tent will succeed. I'm saying that they think bigger and they are effectively laying the ground work for an open infrastructure, whereby App.net is caught in the moment and works on a product. Think in terms of ideas behind each project. Tent's idea is so damn viable, it will survive Tent's own failure if it comes to that.

ruswick• 14 years ago

Does anyone know whether or not App.net has plans to release an official app for iOS and Android? One of my major apprehensions (besides what I believe to be a still unjustifiable price) is the fact that most of the current apps available appear to be shit and cost a non-trivial amount of money.

rcknight• 14 years ago

On iOS I have been using Felix. It may be a non trivial amount of money, but is excellent (especially for a v1) - very polished.

The other popular option is rivr, which has a slightly different take on things, and maybe not as pretty as others, but is free.

johns• 14 years ago

Adian is good and always improving. "Official" apps sort of runs contrary to the whole idea.

kmfrk2• 14 years ago

More discussion: http://news.ycombinator.com/item?id=4599129.

cs702• 14 years ago

So, growing 100% from 10,000 to 20,000 users allowed App.net to drop annual pricing from $50 to $36, which implies their expenses grew by only 44% (from around $500,000 to around $720,000). If expenses continue to grow at similar fractions of the rate of user growth, App.net should be able to price the service for around $5 per year with just over a million users. At that pricing point, App.net would become a compelling economic proposition for many consumers.

jmduke• 14 years ago

How is $5/year with one million users more compelling than free/year with five hundred million users?

ceejayoz3• 14 years ago

Not having to deal with 300 million spam users?

rexreed5• 14 years ago

It may not be, but the odds of building another free-to-use 500 Million+ social network without raising a $1B in the process are pretty slim. I think they are trying to prove that an alternative exists to ad-driven business models for growth (the people are the product, not the customers). In which case, they aren't going for size, but for value. That's why there must be a cost.

rexreed5• 14 years ago

I don't think this has anything to do with cost-based pricing. In a non-commodity market, you don't charge based on how much it costs... you charge based on how much the market will bear. I don't think the choice of $36 vs. $50 has anything to do with a 44% expense rate. It's simple. It's hard to charge $50 a year ($4.17/mo) when you also have a $5/mo plan ($60/year). It's all driven by the $5/mo plan. Simply put, compared to $5/mo, $50 a year is not compelling enough to motivate annual subscriptions. This makes their $36/year ($3/mo) a compelling purchase to motivate annual subscriptions.

Likewise, they actually make more money with people on a monthly plan, assuming they have a customer LTV > 12 months. So, they're making $60/yr on monthly subscribers (20% more +$10), and their annual plan, while a 23% reduction from previous pricing (-$14), which means only a $4 discount on an average customer basis assuming they have an even mix of monthlies who stick around at least 12 months and their annuals. So, they would just need to grow their market such that they only need to have more monthlies than annuals, and they're making MORE money in the aggregate. (Do the math -- you'll see a mix of 58.33% monthlies and 41.67% annuals on the new plan is roughly break even with 100% annuals on the old plan).

Or even more starkly to show how this works -- if they didn't grow their annual base AT ALL, and dropped the price, they would only need 23.4% as many monthlies as annuals to break even to cover the difference. So, if they had 10,000 annuals, even if they didn't grow that at all and gave them all a price break, they would only need 2,334 monthlies to make up the difference (just under 19% of the total combined audience). And odds are high that monthlies will be a lot more than 19% of their total base. Oh, and they'll probably grow their annual subscriptions anyways.

They can see that their rate of growth for monthlies, combined with a more compelling discount for an annual program will actually increase the bottom line. Solid pricing strategy.

teawithcarl3• 14 years ago

Well said. Its a wide-open place and welcomes engineering opinions ... the price (+/-) has been hotly debated inside App.net.

I admire Dalton for moving down ONLY slightly on price. He actually raised it on the monthly, yet allowed people to test cheaply. It's worth the premium, Dalton is wise not to give it away.

PS - members are a dream demographic, and spend $5 on apps easily. Some developers have made $ thousands via app sales already. The developer revenue share model (just announced) accrues additionally on top of app sales each month.

teawithcarl3• 14 years ago

Two points. 1) App.net expenses are quite low. Nowhere near your $500K-$720K range. Since it's not "free", it's going to be quite profitable.

2) App.net is NOT shooting for 1 million users. Not yet. Paul Graham challenged people in his PyCon keynote address to "build a Google Search for the top 10,000 geeks on earth". Dalton is responding to that in "social". He's not trying to scale quickly to 1 million users ... rather, he's wisely getting 10,000 top geeks involved, by sharing revenue and building a blackbox with integrity long term.

Rather than falling for a "must scale like Twitter" mindset ... ponder why Paul Graham himself suggested a smaller, ultra-geek laser focus.

Dalton is executing beautifully. Paying developers well is smart, and it's profitable. Economically when it does scale, this model has the potential to be off the charts. Patience.

waterlesscloud• 14 years ago

A search engine is judged by its utility, which is why having 10,000 geeks use it is a good sign.

A social network is not judged by the same sort of criteria, and so it's not at all clear to me why someone would apply the same strategy.

lkrubner• 14 years ago

That would be true if App.net pays out $20,000 a month to developers, for forever. App.net promises to pay $20,000 to developers, but is that a fixed cost? If it is a fixed cost, then you are right, the more people who sign up, the lower the subscription price can be. A million users could fund $20,000 a month very easily. But is $20,000 a month fair to the developers? By the time App.net has a million users, we can assume there will be a lot of apps competing for a slice of that $20,000. What happens when there are 1,000 apps in the eco-system. Do they all get $20 a month? If yes, then hasn't App.net failed at its primary stated mission, of helping fund app development?

If App.net is to remain true to its mission, then that $20,000 should go up over time. And if it goes up over time, it is no longer so clear that subscription levels can remain as low as they are now.

We should ask how much money App.net is making. Similar services are upfront about what percentage they take from the subscriber's money. App.net needs to offer at least that level of transparency.

markmm• 14 years ago

$36 for a twitter clone with < 1% of the users, where do I sign up!!

redguava• 14 years ago

I don't understand why they are dropping the price. They wanted 10,000 users, they got over 20,000. Surely that tells them the price wasn't a problem.

Why give up so much revenue when it seems like price isn't holding them back?

rexreed5• 14 years ago

It's motivated by the desire to sell a $5/mo plan. Simply put, $50 a year is not compelling enough for annual subscriptions when you have a monthly plan that ends up at $60 a year. If they had decided not to offer a monthly plan (or set the price higher), they would have kept their annual plan at $50.

They see monthly plans as a way to get to a larger market, which explains why that drove pricing decisions.

snilan• 14 years ago

The vast majority of people (at this moment in time right now) would never, ever think of paying for a social network. That would be akin to asking them to pay for their Gmail account. It's just not going to happen.

__abc• 14 years ago

I still don't know why anyone outside the techospher will ever pay to use app.net. Does a material number of users outside the techosphere even care that some apps are having their access restricted? Does anyone outsidethe techosphere even know app.net exists?

More importantly, App.net is still a closed box, just like Twitter. App.net still has to pay the bills, just like Twitter. When faced with the same decisions in the future, what prevent app.net from making similar decisions as Twitter?

Will $5 a user per month really cover their costs if they hit scale (I know they have other revenue streams, but I'm guessing they will have more users than anything else)?

App.net pricing changes

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