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Summary:

In-app purchases on the iOS platform allowed free apps to become some of the best revenue-generators on the App Store. That kind of success can’t have escaped Apple’s notice, so might it open the floodgates for freemium on OS X with the Mac App Store?

macappstore-freemium

In-app purchases on the iOS platform allowed free apps to become some of the best revenue-generators on the App Store, as Ryan noted in November. That kind of success can’t have escaped the notice of Apple, so might it open the floodgates for freemium on OS X with the Mac App Store?

The first condition required for a freemium model to blossom on OS X is that the Mac App Store allow in-app purchasing. I think Apple will make sure this is one of the first things they bring over from the iOS model. Why? Because it opens up a much wider range of revenue generating possibilities for Mac maker. Also, the whole point behind introducing a Mac App Store is controlling the distribution channel. Not including an in-app purchase method that also works through iTunes would limit that control by sending consumers elsewhere for plug-ins and downloadable content (DLC), which undermines Apple’s gatekeeper role.

Apple looks to be blocking trial and demo versions of applications from the Mac App Store, but that shouldn’t preclude the availability of full, ready-for-retail products that offer DLC or in-game upgrades and credits in exchange for in-app purchases. Technically and with regard to policy, there should be no barriers.

But would a freemium approach do as well on the desktop as it has on mobile? It’s a question that already has an answer, albeit a browser-based one. Looking at the success of FarmVille and other Zynga games, you can find many examples of the model already working very well on traditional, non-mobile platforms. Cashing in on the casual gaming space currently presided over by web-based content is probably a big motivating factor behind the introduction of a Mac App Store to begin with.

Unlike on the iOS platform, though, users will have an alternative when it comes to the Mac. They can avoid the App Store altogether and just continue using Facebook and other web-based venues for freemium gaming. There are no technical barriers preventing this on OS X, like the absence of Flash on iOS. I think despite this, people will still opt for, for example, a FarmVille app over the web-based experience when gaming on their Mac. Why? Because it’ll be easier once the Mac App Store is set up, because it’ll likely bear a closer resemblance and have more tie-ins with their iOS mobile experience, and because when OS X Lion eventually gets released, full-screen apps and other UI elements will be put in place to drive users away from the open web and towards Apple’s curated software library.

Despite their web-based success, Zynga and its ilk will likely be the same developers who initially help bring the freemium model to the Mac App Store, too. Apple has proven its ability to draw large audiences toward software and software purchases. Expansion-minded companies that live or die based on the size of their userbase won’t be able to resist.

As Ryan put it, free can pay the bills and more. When the Mac App Store arrives as early as January, we’ll see that’s no less true on the Mac than it is for mobile.

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  1. Freebies or no, an Mac app store is a no starter for me and anyone else who wants to decide what goes on HIS Mac without big brother looking over his shoulder. I know it may be convenient, but I don’t like the price in censorship.

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    1. compulsionstar Friday, December 3, 2010

      i agree if this becomes an exclusive way to put application on the new OSX count me out of Lion. i will stick to Snow leopard for as long as i can. We already have systems like macports, homebrew, and fink for us mac geeks and that is kind of annoying as it is. If there wasn’t already an ideological balancing act in the linux community, I don’t think Apple taking it and saying that it is just like a rpm or synaptic package systems but monitoring and censoring it is really helps. Isn’t one great part of OSX just the fact that you can just drag an application into the applications folder and be done with it without the hassle of an installer or a package manager like linux? seems it’s over complicating it or just being a little too power hungry.

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      1. Are you guys kidding me? Apple isn’t removing the capability to install apps normally, to install whatever you wish, to live without any store. They just add a new way to publish and discover apps. If you don’t want to download or buy apps from the Store, don’t do it! It’s not like you’re forced to use only the Store for finding apps. A Mac isn’t an iPhone!

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  2. Hamranhansenhansen Friday, December 3, 2010

    They’re not blocking trial and demo versions … they are just not offering either of those. There are no trial or demo songs, movies, or iOS apps, either.

    When you think about Apple, be sure to orient your expectations to Consumer Electronics, not PC/IT. Mac App Store is consumerized Mac apps. The expectation is they will work like iTunes Music Store songs, not work like traditional native PC apps.

    > people will still opt for, for example, a Farmville app over the
    > web-based experience when gaming on their Mac. Why?

    Because browser plug-ins are going away. What will run in the browser is HTML5 alone. So apps that rely on FlashPlayer like Farmville, or Silverlight, like Netflix, have all been ported to Cocoa for iOS and will show up soon in Cocoa on the Mac as well. Plug-ins are for I-T people, not consumers, they are quasi-apps with security and stability issues and they have to go.

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    1. First, I can’t believe the paranoia that the Mac App store will be the only way to buy and install apps on a Mac computer. There is no basis for that, it’s never been even hinted at.

      Second, I understand why Apple is not allowing trial and demo versions. Anyone who has ever bought a Windows computer knows that it is rife with frustrating trials and demos. Professional apps don’t offer trials and demos, but some smaller boutique and open source apps do. If those companies and individuals choose to continue on that path, trials and demos could be offered on their own websites. Apple is offering, I believe, a central and convenient place for novice and seasoned computer users to find what they need. They are also offering a convenient place for vendors to sell their wares without having to worry about a merchant account, a payment gateway, or a shopping cart. It may or may not work. Time will tell.

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    2. Are you kidding? No demo’s of iOS software? Then how about you explain this Rockband DEMO(!) I have sitting on my iPod Touch…I’ll be waiting

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  3. I have an iTunes visualizer plug-in that I’m sure would do well if it were on the Mac app store. Currently it is free and I see a few downloads a day but I am sure I’d see more than that with the exposure the app store gives. Too bad this sort of thing isn’t allowed.

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