Barely Legally

Confessions of a Moot Court Bailiff

Probably Predatory

Marco Arment changed the pricing model for his podcast app Overcast last week. Previously, the app was ‘try a bit of it for free, but get all the good features after paying $5.’ Now, it’s ‘all the good stuff is free, but you can donate some money if you want.’ Michael Anderson pointed out that this was a somewhat predatory pricing model, on account of how he sells his app… for free. Arment countered that anybody could make their app free (plus donations), that nobody is entitled to keep their market share, and that other people are copying Overcast’s features to use in their own apps.

There are a few problems with those points, and Samantha Bielefeld wrote about them rather expertly:

The idea that any app developer can witness Marco’s attempt at a different business model, and employ the idea in their own app offering, is true. Anybody can try this model if they wish, the difference is that hardly any other developers will. We are all keenly aware of the publicity surrounding Marco, and the influence he has over the entire industry. From his ground floor involvement in Tumblr (for which he is now a millionaire), to the creation and sale of a wildly successful app called Instapaper, he has become a household name in technology minded circles.

It is this extensive time spent in the spotlight, the huge following on Twitter, and dedicated listeners of his weekly aired Accidental Tech Podcast, that has granted him the freedom to break from seeking revenue in more traditional manners. The success I would see by releasing a music album stating, “pay what you feel my talent is worth”, would pale in comparision to when Radiohead does so.

Arment’s “pragmatic” pricing model reminds me of Taylor Swift’s essay in the Wall Street Journal last summer. She wrote that people will definitely pay artists because art is important and it’s important because it’s rare. She was wrong on one count: music isn’t a scarce resource. Anyone with an email address can sign up for Spotify and start streaming 20 million songs instantly. That’s more than a hundred years of music. You could start listening from the moment you were born until the day you died and never hear the same song twice.

But Swift was absolutely correct on another count. As Nilay Patel noted, Taylor Swift is a very scarce resource.

“In the future, artists will get record deals because they have fans — not the other way around,” writes Taylor. We’re in that future now; that’s where Justin Bieber came from. […] But hitting that tipping point is almost impossible for the vast majority of artists working today, and their inability to actually sell music means they have to sell other things — and making all those other things means they’ll have less time and money to put into making their music. It’s a vicious cycle, and it means that being Taylor Swift is perhaps more valuable than Taylor Swift’s music.

Now sure, Swift was arguing that her music shouldn’t be available for free, and Arment is arguing that everyone can give away their app for free (plus donations). Also, I’m willing to bet she’s a better singer than he is, and that he’s a better coder, etc. But they’re both gigantic brands in their respective fields.

Sure, nothing was special about Arment ten years ago. He was working hard like everyone else was working hard. But he was lucky enough to hit that tipping point working at a startup a long time ago, and now he’s in a position that most developers aren’t. Like Bielefeld said, Radiohead can make a lot more money selling an album for free (plus donations) than you or I can. Arment, Swift, and Radiohead worked very hard and got very lucky. Because of that work and luck, they can take risks that other folks can’t: like giving away your stuff for free and asking for donations.

Those risks have different externalities for musicians than they do for mobile app developers. There’s room for more than one band on my phone, but there’s not really room for more than one podcast app on my phone. Radiohead isn’t putting Taylor Swift out of business by giving their album away for free (plus donations). Arment’s price point is a tough one to beat for developers who aren’t as famous as he is, with the brand he has.

It’s bizarre to watch people like Arment reach their dreams and achieve so much, but still feel like they’re the little guy just doing little guy stuff. He’s famous now. He has his own category on Business Insider, for Pete’s sake. I know they’re not exactly the Wall Street Journal; they’re more like the Huffington Post of business journalism but haha oh wait he has a category there, too.

Congratulations. You’re not the underdog.