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Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

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Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#201

Post by ruswick »

bad_user wrote: post #160
photon137 wrote: post #101

Earlier quoted context omitted.

This has got more to do with production and consumption of a physical good as compared to a "virtual" good than anything else. The marginal utility you mention for coffee is derived from the physicality of the product - and thus I think the Starbucks vs. app comparison is invalid. The barrier to entry to create and deliver a software application is extremely low as compared to creating and delivering almost any physi…

That's why RMS always said that charging for the act of software development is right. But charging for copies of the same stuff (and not providing its source) is not. While I understand the rationale behind this statement, it never felt right. When designing a new car, a lot of money goes into research and development, money that cannot be recovered (sunken costs). However, once that's over and the assembly line is…

1) When you buy software, you often aren't paying for the brand. As was stated in the original post, purchasing software is often done blindly and is a total gamble. Given that the brand of most software is worthless and the cost of production is nothing, where does the value of that software come from?

2) Granted, there are some arbitrary restriction on cars, but they are still a lot more open than software. You can easily alter them, fix them yourself, etc. None of that is remotely possible with commercially-distributed software. I can't just fork Tweetbot, add in support for Orkut, and redownload it to my phone. However, if I want to install a better radio into my car I can. Software (especially on mobile) exists as an immutable "black box" that you have no access to other than the user interface, and that makes it less valuable.

3) No one is arguing that it is inherently wrong to charge for software. People refuse to pay not because they are principally opposed to it, but because the average price of an app in the app store is far below $.99, and thus $.99 seems like an inflated price.

4) It's true that apps like Photoshop are valuable, but it's apparent that their prices are absurdly inflated. Pixelmator can make an app with 90% of the functionality at a little over 2% of the price. Is that 10% extra functionality really worth all those hundreds of dollars? For most, it isn't. The same can be said of apps. Sure, that $.99 app is cool, but this free one does 90% of what the paid one does. Is that 10% extra functionality really worth all those dozens of pennies? For most, it isn't.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#202

Post by engtech »

CodeMage wrote: post #190
tptacek wrote: post #47

Horrifying. The point about the coffee cup comparison isn't that cups of coffee are the benchmark experience for product pricing; if that were the case, my next root canal would cost $0.20. The point of the coffee cup comparison is marginal utility : the money you spend on an expensive cup of coffee almost certainly has very little utility at the margin, because you are happy to chuck it away for a bad cup of coffee.…

Wait, what? Are people seriously arguing about the dollars and the coffee ? Here, let me explain you why paying a dollar for an app or a theme or any such crap on my (full disclosure: Android) phone pisses me off and why I'm happy to go pay CLP3250 for Starbucks coffee once or twice a week. When I go to Starbucks to buy my coffee, I get a beverage that has a certain level of caffeine I like, lots of milk, is sweet an…

The movie analogy is interesting, because you can see the way people have evolved techniques to handle the grossly different movie products:

rotten tomatoes aggregates professional reviewers to give a general score

imdb lets people see the entire body of work by directors, writers and actors. So people will see a movie by a director they like the same way they'll pick up a book by a writer they like.

and then you have companies like Pixar and Disney (same, I know) that exist on brand. People will see the movie because it's a Pixar movie and they know what to expect (or not expect).

but what is even more interesting about the movie analogy is that with all these tools for discovering movies, box office take seems to be a function of advertising budget than anything else (to the point where they believe that movies have to hit a certain take on opening weekend to be successful at all).

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#203

Post by engtech »

ctdonath wrote: post #200
CodeMage wrote: post #190

Earlier quoted context omitted.

Wait, what? Are people seriously arguing about the dollars and the coffee ? Here, let me explain you why paying a dollar for an app or a theme or any such crap on my (full disclosure: Android) phone pisses me off and why I'm happy to go pay CLP3250 for Starbucks coffee once or twice a week. When I go to Starbucks to buy my coffee, I get a beverage that has a certain level of caffeine I like, lots of milk, is sweet an…

A POV of "repeatability" which is missed: It's not so much that you're buying a repeatable $4 item, it's that you're paying thousands of dollars for something instantiated over and over. You're not so much buying the individual drink as buying into Starbucks. You've made your evaluation, considered the options, and settled on a product for which you are going to shell out a pile of cash, using it for a long time (in…

I've often thought that Starbucks should sell fractional shares a long with their coffee, thus becoming the biggest ponzi scheme in history.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#204

Post by anywherenotes »

crazygringo wrote: post #116
alexanderh wrote: post #92

Earlier quoted context omitted.

I would say review systems and internet research negates most of the 'gamble' involved with most app purchases. But I guess most users are just mindless consumer zombies. There are a few instances where you "wont know till ya try it yourself"... but they're few and far between with proper research. I think it really speaks to the expectation of developers here that users are expected to "gamble" on app purchases with…

> I would say review systems and internet research negates most of the 'gamble' involved with most app purchases. Logically, it seems like it should. But a lot of apps are just good fits for some people and bad fits for others. Some people love Angry Birds, and some people hate it. For a lot of apps, it doesn't matter how many reviews you read -- you just can't tell if you'll like it or not. I bought the $0.99 Tetris…

google play (android) allows for full refund within 15 minutes of purchase. I don't know if you bought from them, or somewhere else (maybe itunes), but you can check their policy. It likely won't help you this time, but maybe in the future you can just get money back.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#205

Post by anywherenotes »

Although I agree with much in the article, I just want to point out that google app market has a return policy of 15 minutes after purchasing an app. So you can return it. I don't know if Starbucks offers refunds (I'm sure they would if you make a big deal of it), but apps are not a total gamble - you have the 15 minute window to get your money back.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#206

Post by jdbernard »

tptacek wrote: post #183
cbs wrote: post #175

Earlier quoted context omitted.

you militantly miss the point of the comparison when you benchmark the experience of installing a new app against the enjoyment you get from a cup of coffee. Actually, you're missing the point here. Yes, marginal utility blah, blah, blah, but you seem to be assuming I have infinite marginally useful dollars to piss away each month. There is, by definition, a limit to how much disposable funds I am able to spend each…

If you gave a shit about the dollars you were going to spend for coffee, you wouldn't spend them at Starbucks, which is about 4x more expensive than the second most convenient place you can get coffee. You spend the money for Starbucks because you do not care about those dollars. Which is the point, when you get past all the noodling about what Starbucks coffee actually does for you in the morning. Nobody who makes t…

I do care about the money I spend. Our family plans a zero-balance budget every month, meaning we track every dollar. I still end up getting Starbucks once or twice a week. That would fall into the "snacks and candy" category.

I do not go to Starbucks for "good coffee." Ironically, I have given up on finding "good coffee" in the US for one of the reasons mentioned in the article: going somewhere else is a gamble and I have yet to find a decent cup of espresso. I go to Starbucks for exactly the reason that he mentions: it is a known quantity. I want caffeine and I know Starbucks will give it to me in a drink that is consistently good. It is not great and it does not really qualify as coffee, but it tastes good and it does not change (if it does they remake it free of charge).

The main point I took from the article is that comparing a cup of coffee to an app is not a useful comparison. Even though the marginal utility of both is low, the pattern of buying is very different. People don't get in a habit buying their daily app like they do coffee. Personally, I ran out of apps I wanted to buy on my phone--or even download for free--about three days after I got it. Now I only go to the app store when I hear about something that sounds interesting or I think of something new I want my phone to do.

I do agree with a higher price point than $1. If one of the problems with app purchases is finding a well-made app amidst the crowd of crap, then using price to signal higher quality makes sense, from both a marketing and business perspective.

Re: Stop Using The Cup of Coffee vs. $0.99 Cent App Analogy

#207

Post by dsirijus »

anywherenotes wrote: post #204
crazygringo wrote: post #116

Earlier quoted context omitted.

> I would say review systems and internet research negates most of the 'gamble' involved with most app purchases. Logically, it seems like it should. But a lot of apps are just good fits for some people and bad fits for others. Some people love Angry Birds, and some people hate it. For a lot of apps, it doesn't matter how many reviews you read -- you just can't tell if you'll like it or not. I bought the $0.99 Tetris…

google play (android) allows for full refund within 15 minutes of purchase. I don't know if you bought from them, or somewhere else (maybe itunes), but you can check their policy. It likely won't help you this time, but maybe in the future you can just get money back.

I've returned and gotten a refund for most apps I installed on Play. I kept maybe two dozen or so quality ones.

Works great since you can pretty much get the crux of the quality of an app in an extremely short time (sometimes as little as several seconds).

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