With Amazon’s recent acquisition of the popular digital comics app, Comixology, there has been some great discussion around the in-app purchasing model on both iOS and Android. If you’re not familiar with the situation, comics were previously available to be purchased via an in-app purchase right within the app. As of just a few days ago, that feature has been removed, and instead directs user to the web to purchase the comics, thus circumventing Apple’s 30% cut of in-app purchase revenue. Amazon has done something very similar with their Kindle app on iOS from the beginning.
First, let me admit I’m not a Comixology user, nor do I read comics regularly in any form. My thoughts on this issue are purely from an outsider’s perspective, and focus more on the in-app purchase model in general. So, what’s the big deal?
Comixology users are understandably upset that they’re no longer able to purchase content from within the app, instead they have to visit an external website, which is a bit of a pain. Even more than that, Amazon gets to keep 100% of the revenue from these sales, instead of leaving 30% at Apple. It seems this might be quite a large chunk of money based on the volume of purchases Comixology users make, though the exact numbers don’t appear to be public knowledge.
This begs the question, is the in-app purchase model viable for app stores? I think it is, but maybe not in all cases, and certainly not in all the forms we see it in today. Dan Benjamin and Merlin Mann have a great discussion about this issue in the episode 169 of Back to Work. In essence, in-app purchases seem to make sense for adding new content to apps, like levels, more options, etc… This is demonstrated by many of the top games in the App Store, new levels or expansion packs can be purchased to continue the game. On the other hand, crippling an app just to make it free up front, but then offering in-app purchases to make up for that seems to be less viable. I agree with Dan and Merlin when they say they’d rather pay a little more for the app up front instead of having to fork over potentially even more money for in-app purchases later.
Will in-app purchases remain in the App Store? Absolutely. They appear to be a huge revenue generator for Apple, and probably Google as well. Are in-app purchases the best model for providing content to end users? Perhaps not as we’ve seen, but only time will tell if this trend will continue, or if users will instead be willing to pay a little more up front for the promise of continued updates and content down the road for free.