The economics behind MacHeist
MacHeist, for the last month or so, was a contest of sorts to solve puzzles that were created by the MacHeist team - and winning would grant you credits towards software. Pretty neat little idea.
This week they are offering a fairly large application bundle for $49 that includes Delicious Library, FotoMagico, ShapeShifter, DEVONthink Personal, Disco, RapidWeaver, iClip 4, one game from Pangea, and possibly NewsFire and TextMate (if the bundle is successful enough, everyone that bought a bundle will also get these). Phew! Quite the list of software. I only own two of these applications and what a steal to get a copy of all of these for just $49USD!
There is a problem though - the amount of money to be made off of this is seriously in MacHeist’s favor, and not in the favor of the developers of each of these applications nor the charities that MacHeist is saying that 25% of the money is going to.
Normally I’d have no problem with a money-making scheme like this. It is a fairly good idea, it definitely benefits me as a consumer of these applications, earns the developers some dough, and money goes to charity. The problem with the idea isn’t the idea itself, it is the way they are marketing the idea. MacHeist is marketing this as The Week of the Independent Mac Developer. What they are not telling you is that the developers of the software in the bundle have already been paid and stand no chance to earn more money no matter how popular this bundle turns out to be.
That all being said, there has been some argument as to whether or not this should matter being that all of the developers were fully well aware of the terms prior to signing up. This might be true, and I’m sure each of the developers have their own motivations for being part of this bundle - but that doesn’t mean that they knew how MacHeist was going to market the entire thing. It doesn’t mean that they knew that MacHeist would try to look like a savior to all Macintosh developers or that they’d use that to make a huge amount of money. All-in-all, I hope the developers of all of these applications learn from this experience. Almost never sell discounted versions of your software.
Gus Mueller, author of VoodooPad (an application worth double it’s price) and other applications via Flying Meat, was invited to join the MacHeist bundle but turned them down. He simply saw through the initial one-lump sum payment and turned down the deal because “it was a horrible deal [for him]”. I’m really glad he stuck to his guns. If any of you think that means anything, go buy a copy of VoodooPad, FlySketch, or FlyGesture at full price.
John Gruber covered this story in his usual way - showing how incredibly bad this is for the Macintosh developers in the long run and showing with real numbers how the more successful this MacHeist bundle is, the more the developers lose.
The MacHeist bundle is an incredible deal, and anyone reading this that is on a tight budget but would love to use some of that software I recommend you taking advantage of this situation. As a consumer, and penny-pincher, I’d be lying if I said otherwise. However, if you are not concerned so much with dollars and cents, I recommend downloading the demos of each of those products you might be interested in, using them for their trial periods, and (if you like them) buy them at full price. That is the way all of this application stuff is supposed to go.
Any thoughts on this? Drop them in the comments.
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I haven’t read much of Gus or Gruber’s stuff recently but from what I have read I completely agree with them, and thusly you as well.
It’s always great to find a nice discount or bundle that works to the favour of developers but with the recent trend of MyDreamApp, MacAppADay, and MacHeist it’s catering to the lowest common denominator. I’m betting that half to three quarters of the audience wouldn’t use most of the software being provided on a regular basis (other than items like Shapeshifter).
It’s odd but it seems to me that a lot of Mac consumers are simply app collectors. They’ll download whatever free trial, free software, cheap bundle they can whether they use it or not. Then it just sits there and only the developer is left hurting.
Mike Stickel on December 13th, 2006 11:20 am
Developers in the deal might not have known how it was going to be marketed, but that doesn’t mean anything to me. They were told they’d get X amount of money if they put the application in the bundle. The developers who accepted got their money and the app is there for the people buying the bundle.
What is the problem? I don’t see it. If you as a developer don’t like the idea, then don’t participate.
I just don’t see how taking the deal/money would turn into a bad idea based solely on the way it is being marketed. They agreed to a payment, if they got it (for whatever reason they accepted it) then the deal was worth it to those developers.
Josue Salazar on December 13th, 2006 2:26 pm
Let’s not forget installed user base and upgrades. For the developers who participate in the MacHeist bundle, it means a very easy way to get their titles in front of people (raising awareness) and, quite importantly, getting more people using them.
With a larger installed user base, these independent developers now stand to make more money from upgrade licenses than they would have if they hadn’t participated. Plus, for some, I’m sure it just feels good to know that more people use the tools you created.
tunequest on December 14th, 2006 2:18 pm
Mike - I’m trying to work out how the developer is “left hurting” by people who collect free trial apps that they don’t use - or only use infrequently. What, exactly, has the developer lost?
This argument strikes me as similar to that made by the RIAA - that every free download is a lost sale. That’s certainly not the case. Developers offer free downloads because they drive sales. Should people be obligated to buy the product if they download a free trial? That would make the concept of a free trial meaningless and dishonest.
Regarding the article, I’m not sure where you are getting the idea that Macheist sees itself as a “savior to all Macintosh developers.” That is certainly not how they are portraying it. they are portraying it as a celebration of independent developers. That’s accurate, isn’t it? All the developers involved could be considered “independent” - and there is certainly lots of celebration. Read the forums on the Macheist site, and see how enthusiastic people are, embracing independent apps. There are countless posts by people who are new to the Mac, or have never bought shareware before - saying how cool the software is.
Gruber, though often astute, is just posting his opinion. In no way does he prove that this is “bad” for developers. It might turn out to be great for developers. I think many are seeing this with too much bias. They just assume it is bad because they are making a bit less money per sale.
Harvard Irving on December 14th, 2006 9:21 pm
Now that I’ve read what’s going here are my thoughts.
Josue: Nobody is disputing the fact that the dev’s were asked and the ones that are participating made the choice. I’m sure they all have their reasons but let’s just say I’m glad I’m not on their support teams.
Harvard: What I meant but poorly stated, was that the developer is left hurting because of the dollar to license equation.
It’s not necessarily that the dev’s are making less per sale, though they are, it’s more about how the promoters are promoting the sale. They are saying they are trying to help the indie Mac developers and finding the hidden gems of the software world, they aren’t. They may seem altruistic in their venture but they are making the majority of the money, which is completely contradictory.
Also, how many of these apps are hidden gems? Delicious Library, Textmate and Newsfire would barely qualify in my opinion, as hidden gems. They’ve each received a large share of awards and acolaids from a great variety of sources.
I’m not doubting the fact that the promotion is working. It’s the motives behind the promotion that I don’t like. If you want to promote charities and Mac apps fine. Don’t sell it like you’re doing them a favor giving them a cookie when you’re getting the bakery.
Mike Stickel on December 15th, 2006 11:51 am