I priced SeattleBus, like many other iPhone application developers, in a bit of a vacuum. It’s hard to set a value, but I took a stab. The initial pricing tier was “15”, meaning the price that showed up on the Apple Store was $14.99. First day out of the gate – without the AppStore even really being to anything but the serious early adopters – I got panned in the reviews for the price. There were few other applications priced up that high, and universally the “reviews” of my Application reflected a sense of “costs too much”. It was also clear from a few of those reviews and a couple of emails that I received that I hadn’t done a decent job of making it clear what the application actually did. It’s all so clear to me – I’ve been working on the thing for months…
So last night after the Seattle Xcoders meeting we shut down the bar and I read the reviews aloud to my compadre’s over scotch (Macallan 12yr – nice stuff). We were laughing at the tone of some of them, but the message came through loud and clear. The tough question is what do you reduce the price to? What’s a reasonable value? It’s a damn tough choice. While I was laughing and agonizing over the reviews, Brent welcomed me to the world of “developers learning to get a thick skin”.
Earlier in the course of the night, I pestered lots of folks around me for what they thought. What would they do in my shoes? The end result of those conversations and my own thinking was to reduce the price to tier 10 ($9.99) – which I did late last night/early this morning. SeattleBus is a niche application, and I think the value of what you get from the application is sound:
- You can find bus stops near you and get arrival times for the routes that serve those stops.
- You can keep a stash of your “favorite” bus stops.
- And you can search the list of over 1000 recorded stops in the greater Seattle Metro area to find just the one you’re looking for.
Once you’ve select your bus stop, you get the arrival data for busses coming within the next 30 or so minutes, with detail on when those buses are scheduled to arrive, and a pretty darn good estimate of when they’re likely to really arrive. The data is provided as an online service by Seattle Metro (or MyBus.org – same thing under the covers). My application provides a nice user interface over the top and a convenience for getting to that data much more quickly than working through the web sites. Obviously I’m convinced that convenience is the key value.
I tacked into my calculations that this is a very niche application. I don’t know how many we’re talking about specifically – but it’s basically iPhone owners in Seattle, WA. I could re-work parts of the data and likely provide a version for Portland, OR – that’s would end up being a separate application and again we’re talking about a small niche compared to other iPhone applications. And no – I’m not likely to internationalize the application. The time effort of internationalization against the potential sales just doesn’t make sense.
Finally there’s looking at everyone else out there. Pinch Media has a nice graph of the price distribution of iPhone applications on launch day and an associated write-up. There’s a lot of activity in the $0 to $4.99 area – and if this was an application that would appeal outside a fairly narrow geographical area, I’d be way more likely to head into that region. Between $4.99 and $9.99 there’s a dead zone – and almost nothing until a huge spike at $9.99. Paul Kafasis seemed to have called that pretty well back in June in his article at Inside iPhone. A day later and pinch media updated it’s pricing histogram – more apps have pushed in, but there’s still this huge gap in the $4.99 to $9.99 price point – now with a little spike in the $7.99 area. In the end, with a fairly limited market and a pretty firm conviction that I’m adding sufficient value to warrant it – I went with $9.99.
SeattleBus a 1.0 application and I’m definitely planning on continuing to add value: I’ve got some improvements to make in the overall performance, I’d like to add some features like tracking by route, and potentially using that geolocation data to drop you to a map of where a bus stop is located on Google Maps. I plan to provide these (and potentially other ideas) as free updates to the $9.99 version. I’m not sure I’d be as ready to provide free updates to a $4.99 or lower priced version.
I’m planning on keeping the price point where it is now for a while – letting the launch really take hold, rather than whip-sawing around in any frenetic changes. Hopefully enough folks will bear out the value. As I’ve mentioned in previous blog posts, I also have other application ideas (some of which are better described as “whims”) that are coming along as well. I expect a number of those will fall in the free to $4.99 range.
Rhonabwy 
Joe – I’m happy our data was useful to you.
Price points are ridiculously tricky things to determine. Unfortunately Apple’s removed the number of downloads from its AppStore website, or I would’ve used that data to put together a yield curve – obviously a lower-priced application sells more copies than a higher-priced application but revenue per user is lower, so the challenge is to find the price which maximizes the product of audience x revenue per user.
The Seattle Bus application sounds extremely useful for people in its area – the type of application they might use every day for a very long time. Because of this, one possible alternative is advertising – if it’s done right, and if it’s done in a way that’s respectful of the user experience. At Pinch Media, we’re experimenting a bit with this, but we’re being careful, because it has to economically benefit the developer – if a developer replaces a paid application with a free application with ads, and the developer ends up making less money, then we’re worse than useless.
To determine whether an ad-supported application makes more sense, a lot of data’s necessary, and it does involve some guesswork:
* how often are my users using my application?
* how many ‘pages’ within my application are users looking at?
* is my application ‘sticky’, or do downloaders stop using it?
* what advertising rate can I get (for ads that won’t drive away my users)?
* how much will my userbase multiply if I begin giving the application away?
Tricky questions to answer. We built a free analytics suite to help developers answer a few of them, among other things, but the last two questions are still getting worked out – I’m watching the market pretty closely and talking to a lot of advertising partners to help determine this. I can tell you right now that advertising isn’t likely to deliver the same revenue per user as a $9.99 download, but if the audience grew large enough, the product of audience size x revenue per user might very well be higher. It’s early – we’ll see.
LikeLike
The new price point is probably enough to get me over the hump to buy it.
If there was a way to try before I paid, I might have been happy to pay $14.99, of course, I might also have decided it wasn’t worth it.
LikeLike
Here’s hoping you add the track your bus by route option to the next update.
LikeLike
I bought the app as soon as my iPhone
recovered from a 4.5 hour freeze thanks to
Apple server problems on day one. I like
the app, but since I go from West Seattle
through downtown to Eastlake area, I need
more information on downtown locations such
as Columbia Street that is the last stop for
numerous Metro routes before they get on the
Viaduct, and more information on stops on
lower Eastlake Ave E near the BOA branch
(1616 Eastlake Ave East). However, this is a
GREAT app and well worth the price. Looking
for updates.
LikeLike
If no-one is moaning about the price, then you are charging waaay too little. Welcome to fun world of software pricing.
Some useful links on pricing here:
http://discuss.joelonsoftware.com/default.asp?W1341
LikeLike
9.99 is a totally fair price. thanks for your hard work!
LikeLike
Hey Joe,
We are currently experimenting with a $9.99 price point on an application that has lower-quality competitors for cheap or free. The first day we received a number of reviews complaining about the price.
But we also got a normal “FIRST!” five star review. Meanwhile we had someone else come in with a decent review that also suggests the app is a bit overpriced.
We’re considering an adjustment but are going to wait and collect some data. It seems that once the initial bump of being a recently released application is over you may be somewhat limited to people looking for your application.
I would think that you could get some decent data by fluctuating the price in these conditions.
Either way, the dollars could certainly be higher given the amount of effort that goes into creating the applications. I think a lot of people don’t realize the complexity that goes into performing anything of sophistication with the device. They just see things to tap.
LikeLike
i use the seattle bus app everyday! And its great! But i would like to ask if u can add bus stops on request? The bus stop out side my house is not listed. And also maybe a tripplanner
LikeLike
Hey Brian,
I’m currently limited to getting real-time information from what King County provides – the stops are all pre-defined. I’m working with the folks at King County Metro to try and get something together to improve the resolution of the stops (it would be nice to have *all* the stops in the application) as well as to arrange for a more stable data feed of updates. Currently I’m reverse engineering everything I need to know to provide this information.
LikeLike