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On Bundles and Heists

Posted on 26/03/2009 at 12:30 AM in

Another year, another Mac Heist, another round of developers and users talking about how this is bad for developers and users alike. For the first year of Mac Heist I was in this group, which was much larger than it is today. I thought it devalued the software and let those running it run away with a hell of a lot of money while the developers got left with the support burden.

For the first year this did seem to be the reality, with developers getting fixed 4 or low 5 digit sums for their participation (apparently the amount each dev got was doubled after they saw how successful it was. This is what caused most of the outcry as it seemed those who were doing the marketing were exploiting those who did the "real work".

The second Mac Heist didn't receive quite as much controversy. People felt that developers knew what they were getting themselves in for this time. The deal was also a revenue share one rather than a fixed amount. The third and current Mac Heist is operating the same way and is receiving even less controversy.

The change is that developers are finding out more about how the bundles are run and maybe have participated in one of the other smaller bundles. The users are seeing better and better bundles each year with huge sums going to charity. And most of all we're finding out that it isn't a case of the developers doing the "real work" and the Mac Heist team just setting up a website. The amount of polish that goes into the website and the challenges rivals even the best Mac apps. Every year it becomes more apparent that Mac Heist isn't an easy thing to organise.

But...

But none of that will make some of the issues go away. Does this devalue Mac software? Does it hurt developers? The first question I can't answer beyond saying that only time will tell, but I think it won't. The second one I can answer with a resounding no.

For those who don't know, I participated in a smaller bundle earlier this month called the Mac Bundle Box. It worked on a similar concept with 14 apps selling for $49 with 5% going to charity and each developer getting a percentage amount of the profits. It didn't sell anywhere near as many copies as MacHeist does, but it was still a hell of a lot of sales. How many sales? Well I made about twice as much as I currently do a month from regular sales, yet my support load has hardly increased.

Another important impact is the publicity. Your sales outside the bundle can increase as people find out more about your applications. Of course this is more likely to happen if your app costs less than the bundle price, but it is an important thing to considered. It also builds up your user base meaning many more people spreading word of mouth reviews.

Money, money, money

As an example of how much developers are making let's look at the figures Mac Heist provides on their site. At the time of writing there has been $123,000 raised for charity, meaning $492,000 in revenue. There are 12 apps, plus a bonus app, plus the Mac Heist team all getting money from this. Let's assume a straight 14 way split, that would be 7% (actually a bit more but let's round down to take into account expenses somewhat). That would mean each party has so far got $25,830, enough to live off for a year if you keep your costs low.

And this is only so far on the first day. There are another 13 days to go on top of the rest of today. Sales will slow down but they'll still be making a 5 digit sum each day. Let's conservatively assume that they average $10,000 a day, that would be $140,000 each for 2 weeks.

Obviously the maths isn't perfect, the expenses may be more, the parties won't get equal amounts (I'd wager that the cheaper apps get a smaller percentage than the bigger apps), but we're still talking a LOT of money. One Mac Heist could set a developer up for several years or let them invest in support staff or other developers. Basically it is more than a good deal for developers, so don't worry about them unless the ones participating start complaining.

(13) Comments

Comments

A lot of the criticism of MacHeist that I see works on the flawed assumption that developers are definitively losing out on full-priced sales in exchange for a bundled sale.

Now, there’s evidence that’s true in a certain proportion of cases. I suspect that, this year, a number of people held off on buying Espresso because they had an inkling that it was going to be included in the bundle.

Flip it around, and you’ve got a proportion of the bundle where people already own licenses to the software (though MacHeist offers a ‘gift license’ option for this scenario, I wonder how many people really use it); I’ve got several licenses to 1Password and two for Little Snapper (as a couple of examples) as a result of buying apps and later picking up bundles.

The third aspect to consider is that in order to be broadly appealing, the bundle is rarely going to be all things to all men: some will want it for LittleSnapper and Espresso, others for World of Goo and Big Bang Board Games, some for Kinemac and BoinxTV, and so on. A developer can’t assume that a bundled license is an actual *user*, but gets money in the bank either way.

As you point out, if the slice of the pie you’re getting is big enough, then that easily outweighs the “would have bought anyway” figures.

If MacHeist ever became an all-year event, it would likely become problematic (because people would start to expect those kinds of prices all of the time). If bundles remain once-or-twice-a-year affairs, the Force should retain its balance, I think.

Posted by Mo McRoberts on 26/03/2009 at 02:24 AM

Well, they don’t seem to be too keen on pleasing their customers:
http://digg.com/software/Highschooler_Asks_for_Discount_MacHeist_Asks_If_He_s_Joking

Posted by Sasha Friedenberg on 26/03/2009 at 06:12 AM

@Sasha, while the language of the response could do with a lot of work, the sentiment is one most people would agree with. You’re getting about $900 worth of software for $39. You can’t expect to get an added discount on top of the 95% discount you’re already getting and I say this as a student myself.

Posted by Martin Pilkington on 26/03/2009 at 06:36 AM

Oh, I understand the huge discount they’re giving us. But MacHeist is still raking in profits and the developers are still getting their publicity. I think they could stand to discount one of the bundles for a student.

Then again, it could also be the response that riled me up. I probably wouldn’t have reacted this way if “Mike Lary” hadn’t been as rude.

Posted by Sasha Friedenberg on 26/03/2009 at 06:40 AM

“don’t worry about them unless the ones participating start complaining”

Enough said. Gus Mueller is happy with the deal, and I don’t think Flying Meat is in such a desperate need of publicity to sell itself cheaply.

What is more, these deals has an appeal also to people who are not generally used to buying software, getting them to buy both generates a new revenue and educates them.

I do care for the developer of the software I like, but I don’t believe that buying something at a discount means devaluating their job. I am a customer, not a friend, if they choose to promote their stuff selling it cheap it’s their choice, I am not ripping them off or showing them any disrespect just by acting as a customer. They hadn’t a gun pointed at their head when they decided to enter Macheist.

Davide

Posted by Davide on 26/03/2009 at 02:25 PM

Boo Hoo for Sasha. If he had participated he could have gotten an 8.00 discount making it 31.00 for the bundle. He obviously did not want to do the work for a discount.

On his web page he says he owns a MacBook Pro, iPhone and I guess some medium to high-end speakers. He can’t afford 39.00 and he owns this equipment.

Tell you what, he can drop his data plan for 2 months, there’s his 39.00 for the bundle and some extra cash in his pocket. He can go out and cut grass, deliver pizza, shovel shit and basically get a job. He is not willing to make the deep cuts to get to his goal, waiting for hand-out.

As Dave Ramsey says, live off beans and rice, rice and beans. Do it for 3 months, no movies, parties, etc. You don’t see the inside of a restaurant unless you work there.

You don’t want the bundle, good for me. It means under the current Heist there is one less person I need to be in front of to get the bonus app.

Sheesh… what a whiner.

Posted by ray on 26/03/2009 at 04:45 PM

Oh yes, absolutely. You definitely have enough information to judge my life and make criticisms on what I do. Certainly؟

Posted by Sasha Friedenberg on 26/03/2009 at 05:02 PM

How’s that new Dell Mini 9 working out for you. Sell that to buy the MacHeist bundle.

Posted by ray on 26/03/2009 at 06:21 PM

Oh, thanks! It’s working out great! Especially since I haven’t bought it yet!؟ People don’t seem to realize that a financial situation/circumstance can change. I used to be able to afford software and such, but the last 3 months have shown me otherwise. My father works in real-estate. He hasn’t seen any income in the last 3 months. None whatsoever. But thanks for judging!

Posted by Sasha Friedenberg on 26/03/2009 at 06:27 PM

I am sorry for your financial situation but if you don’t want people to judge and you had put it out there that you were looking for flashy items then people will make their own conclusions.

I live below my means myself. Want and Need are two different things. It’s not my job to keep up with the Jone’s. If I can’t afford it I don’t get it. I’ll look for alternatives, opensource, freeware or in the end do without.

If I really want it then I’ll make the necessary financial changes, ie., forgo something else for this because I can’t have both. Because the MacHeist deal is time limited, deeper and immediate sacrifices must be made.

Posted by ray on 26/03/2009 at 06:56 PM

@ray. Please try not to attack others. By all means criticise their point of view but do so in a civil manner. I think the point is more that the reply they received was very attacking in it’s tone. The same point could have been made in a much more neutral tone by the MacHeist support person and I doubt Sasha or his friend would have had an issue with it.

Posted by Martin Pilkington on 26/03/2009 at 08:19 PM

I’ll agree the tone of MacHeist’s response was on the sarcastic side and that was the point. But when you want something and you are strapped for cash…

I had a 7 year old laptop (windows) until 2006, slow as molasses, noisier than a jet engine, thick as a brick and heavier than a 2 ton whale by today’s standards. I used a TDMA phone, no texting, no surfing, no color, no nothing and the only reason to switch to GSM was because AT&T stopped supporting it just 2-3 years ago not to mention jacking up my rate to match a GSM phone to get me off TDMA earlier.

He has an iPhone. Did he drop the data plan, sell the phone and get a cheaper one. Pay the cancellation penalty and don’t have a phone for the next 12 months. He’s 16 and still lives at home. Use your parent’s phone.

What I see is that everyone is asking for a hand out but are they willing to dig deep themselves.

Posted by ray on 26/03/2009 at 09:59 PM

Well there is a downside for the developers. I for one do not buy software at retail anymore. With the amount of bundles around I only make my purchases using the bundle model.

I can’t tell you how many apps that I intended to buy from the developer appeared in a bundle that I purchased instead.

Yep bundles for me and if the exact app is not offered in a bundle, something similar enough will be!