DISQUS

Julien · 1 year ago

Actually, it's incredible to think that barely only Apple has been able to set up such a 1-click system... we should really have an "open-id" for paying, where basically the user clicks on a "pay" button, is then redirected to a Paypal-like account that summurizes the purchase, with a second button "Pay" and that should be it!

michaelgalpert · 1 year ago

Unfortunately Amazon patented the beauty that is the 1-click. Apple licensed the 1click from amazon back in 2000 http://www.apple.com/pr/library/2000/sep/18amaz... if I am not mistaken it went for $1B

I have always wondered how different the web would be if there were no 1-click patent

jasonoliver · 1 year ago

wow surprisingly did not know that (although faintly remember hearing about this in the past). amazon prime and 1-click transactions have made me buy so much more random crap from amazon, that i would never otherwise even consider buying haha.

naveen · 1 year ago

i don't think purchases are easier on App Store just because of the UI and the 1-click, although they play a role. i think the main reason is due to the fact that both App Store and Amazon started out as _stores_ (iTunes Music Store and Amazon Books, respectively). you've been going to both of these places for years to "purchase" something by forking over money, so free is only an added benefit. with web2 stuff, you go there for the content or the community -- it's never been about buying. if anything, your "purchase" on these sites is paid for by your participation.

andrewparker · 1 year ago

Sounds right to me, totally agree. Also, sounds like a piece of usability.
User intent is setup by the metaphors you use to convey your interface. The
"store" metaphor is ideal for defeating the penny gap. A good metaphor is
essential to usability.

naveen · 1 year ago

great point - great way to look at it.

Fraser · 1 year ago

Nice write-up. Alex and I were discussing something similar yesterday after reading Greg's post. I wonder though, if there is a bias to the stats from apps that people have traditionally expected to pay for (i.e. mobile gaming apps, etc.).

If you look at web2.0-ish applications on the app store only... what's the average cost?

andrewparker · 1 year ago

Very good point, totally agree. Hopefully Greg will stumble on this thread
and add input.

jasonoliver · 1 year ago

hey andrew, nice post and definitely something good to think about. that being said, echoing a lot of the comments over at techcrunch, it's clear that yardley's analysis isn't that useful, because at the end of the day, it is an analysis of what iphone app devs decide to price their app, which may or may not be intelligent or strategic. also, i heard that most of the $0.99 apps are by a developer who took a bunch of free to read books and converted them into $0.99 click to read ebooks. when the data is available, would be much more interesting to see how many people are buying apps at each of those price points, and what categories those apps break down into. seems to me like early on, games will do pretty well on the retail front, but long-term, they have the best potential for ad-supported revs while utility apps that don't increase in value the more people use them, will be relegated to charging users up front to generate revs.

innonate · 1 year ago

Jason, you're right that the market still has to shake this out, but I think Andrew's most important point is that Usability and ease of payment is hugely at play here.

With one-click, app developers aren't afraid to put a price on their app, and that's important. As a web-app developer, you definitely should be scared to do that, because it's still a huge barrier.

jasonoliver · 1 year ago

Completely agree that the barrier for charging for apps has dropped tremendously on the iphone app platform. that being said, it will be interesting to see the volume counts for free downloads vs. paid downloads. people are clearly still at the point where they are just adding apps for the sake of adding apps (since many have not had apps on their iphone before), it is a great opportunity for app developers to achieve mass adoption. according to medialets, nearly 50% of apps are either free or $0.99 (and we already know most of the $0.99 ones are those ebook scam apps ie not real apps), and most of the download activity centers around the free apps. for developers, the fact that it is easier for users to pay for apps might not outweigh the fact that if the app is free, the distribution potential is that much greater.

robzand · 1 year ago

good observation. yet you still have to enter a password each time you buy an app from the phone version of app store. biometric instead?

andrewparker · 1 year ago

Ha, Apple's certainly got plenty of everyone's fingerprints (and a couple
key scratches too).

Q dub · 1 year ago

Penny gap is an important problem and I think the best people to solve the problem are those who already have a recurring billing relationship with the customer--e.g., telecom players. Unfortunately they have been completely out of this game.

Think about "overage" minutes on your cellphone plans. Every minute you go over you pay <$1, that's similar to a micro transaction and customers are used to seeing that kind of variability on their bills. With enough "training" people can get used to additional variability from app and content micro-purchases while maintaining the simplicity of 1-bill for telecom.

Taylor Davidson · 1 year ago

It's funny that telecom (at least in the US) has been so far behind in creating this type of payment platform. But check out DoCoMo in Japan: they created an easy way to micro-bill for micro-transactions and created an easy payment platform for mobile developers and content providers to deploy AND get paid for their work.
Very different from the focus on US telcos on controlling the "deck". DoCoMo's platform is one of the big reasons Japan created such high mobile content and app use. And Apple is the first one to apply the model to mobile in the US.

Andrew is dead on that usability and ease of payment is the big problem. I wonder what lessons we learned from the early attempts at monetizing micro-content, from the lessons of Qpass, E-Coin et. al.

I wonder if part of the penny gap is psychology: perhaps people just don't want to make a decision about something that costs less than a certain amount: a waste of mindspace?

fredwilson · 1 year ago

i guess it matters what price developers charge, but the vote that really matters is the decision to download and from what I am hearing, users are voting heavily for free apps over paid apps. i've asked Greg, in a comment on the Pinch Blog, for that data.

fred

Ethan Bauley · 1 year ago

I especially enjoyed naveen's point (and your response) re: intention.

In communities/networks, you have to be more creative with how you use payments; a corollary to (or inversion of) Josh's "penny gap" would be using payment as a firewall to create value for users (see: craigslist charging landlords to post "for rent" classified ads to reduce duplicate postings).

Frankly I thought that this was one area where Twitter would use payment to create value for users (e.g. as your following:follower ratio >1, you have to pony up $.

Thanks for posting on this Andrew; as a non-iPhone user it's something I've been curious about ;-)

Lee Semel · 1 year ago

This may be an obvious question, but why could an online store that nearly everyone shops at (Amazon) not set up a similar system for use by web app developers? Let developers add a simple "pay" widget to their apps that uses 1-click. Amazon would handle all payment processing, subscriptions and chargebacks, provide an online store interface similar to the iTunes store but for web apps, and take a cut of the payments. This would fit in nicely with all their other services for developers. Amazon Simple Pay doesn't quite do this because users must go through several screens in order to make a payment, and there's no central repository of all the web apps that will encourage them to try and buy.

andrewparker · 1 year ago

Great idea. You listening Bezos?