Charles Pillsbury III

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Macheist Controversy (and the tragedy of the commons) : Update!

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[Note: I've changed this since the original writing to include a few more thoughts from the rebuttal that was made on this week's MacBreak Weekly. You'll find them at the bottom under Addendum]

[Editors note: MacUser talks about this some more as well. And yes, I realize the Tragedy of the Commons connection may break down a bit towards the end of this (see the Addendum for a bit more on it). ]

There is an interesting bit of controversy about Macheist (which I linked to a few days back before the offer ended). The argument goes something like “selling software that cheap devalues it, and the rest of the shareware community.” Basically they contend that if 12 apps sell for $49 it’s going to be harder to sell 1 app for $49 later.

From a participating developer viewpoint there’s an issue with how much money you’re making vs how much time you’re spending supporting those applications (cost of an application is not just for development time, but reflects how big the market is and how much support you’ll have to do) . Of course nobody is forcing the developer into it, so it’s their choice. To many of them it might be worth the X number of dollars they receive for a package sale and to have that many new users (if only 50 people use your program number 51 may be less likely to buy, but if 5000 use it, number 5001 has fewer reservations). The other participating developer viewpoint to consider is that if 50,000 people buy the package, and you get $1 per package sold (or whatever the figure is), but your package sells for $40 anyway you’ve got to judge “how many of those 50,000 users are actually going to be using my product and expect support” to determine if it’s worth the cost.

I know I’ve bought packages like this before, and it has largely been for one or two products in the pack, with the hope of trying out a couple more. For example: Last year’s macheist had Textmate in it, and that’s the one application I use the most from that package. I also love DEVONthink Personal, and plan on going to the pro version once I upgrade my mac. I’ve tried Delicious Library and while I like the idea of it, I haven’t the time or energy to catalog all my hundreds of books. I used Rapidweaver once or twice and realized it’s not for me. Newsfire was my RSS reader of choice for quite a while, but I’m now a Vienna user. Disco gets occasional use for burning. The rest of the apps got a once-over and are now largely unused. The point is, that while I purchased a dozen apps as part of the bundle, I’m not using 12 apps, I really use two or three. Those two or three apps I may need support on (though I haven’t yet), but the others are just going to sit there. So from a developer standpoint, while I can now boast 50,000 new registered users for advertising purposes, I also realize I’m only going to be supporting a small fraction of that (probably 3-5,000). So, if I sold $200K worth of active licenses for $50K was it worth me?

Of course one of the arguments I’ve heard from developers against the Macheist concept is that you’ve devalued your software so you’re never going to get that $40 price again (or at least not in the numbers you might have otherwise). There is a possibility that this is the case, and it’s a valid concern. However, you have to look at your application and its market and make that judgement for yourself. I don’t think the Pixelmator guys have “ruined” the rest of the “personal photoshop alternatives” market for Acorn and such by participating this year. Those apps are worth their price, and just as I know I won’t get “After Thanksgiving Day Sale” prices year round, I know that if I want something outside of the Macheist realm I’ll buy what I need (Ecto for instance, is blogging software I bought outside of any bundle concerns because I tried it and liked it enough for it to be worth the cost).

From a user standpoint you can consider two points of view.

A) It’s good for the market to have that many new users, so you’re helping the indie-developer community. (in which case, save yourself some money and buy the package and enjoy it and feel good about it).

B) It’s horrible for the market because you’re devaluing the software market in general. If you look at it that way you’ve still got to consider the Tragedy of the Commons concept. Though it’s not a direct corrolation because the packages tend to be not limited to X or Y number of them. The idea of the TotC is that if there is a limited resource (say chickens) it’s in everybody’s best interest to only take a certain number of them for themselves (to eat) to maintain a sustainable resource (eggs). It’s conversely not in your best interest to leave the limited resource (chickens) for others because they’re not likely to show restraint and if they eat all the chickens, you won’t get any chicken or eggs. (of course I’m vegetarian so that analogy breaks down in practical terms for me, but you get the point).

Likewise, if you’re an indie-developer and you think the bundle will de-value your product whether or not you participate, do you get “in on the action” while the getting is good so you at least make something from the marketing aspect? or do you abstain in hopes that others will abstain and keep all of your software valued higher?


On the way to work today I listened to the MacBreak Weekly with the response from the MacHeist supporters/participants. They made some of the points I did (you don’t get 50,000 new users, just a percentage of that and it’s a “day after thanksgiving day sale” mentality). One of the things I may have heard somebody mention elsewhere (in a slightly different form) is that of a Tragedy of the Commons view from not just the customer standpoint (”am I cannibalizing the shareware market by purchasing this such that I may not get such good software in that market again?”), but also from a participant standpoint (”If Joe Blow customer buys this package that includes X or Y product that’s similar to mine, are they going to consider buying mine?” think of those hemming and hawing between Pixelmator and Acorn). That is that there are only X number of shareware customers out there, and if I don’t take them by participating then the other guy may and then I’ll be out of luck. Again, I’m not sure if this is actually the most robust reason to not participate, but it is certainly a way of thinking I can understand somebody following.

One of the most salient points I felt was made during the interview with the SnapZ Pro guy was that they didn’t participate last year, but based on where there product was in its life cycle they felt it was in their interest to participate this year. I can see two main reasons for that (and a third that might apply to another scenario):

A) If you’ve already gotten your “early adopter” crowd and the product has been out for a while and you hope to gain some mind-share before the next big upgrade it would make sense to participate in a well advertised group discount.

B) How much money is involved. If you figure you’re only gaining real customers in one out of every eight purchasers… then if you take a cut of X percent you can determine how much your discount really is (vs the “flat fee” paid in the first MacHeist. Though I think the risk involved in that first one made sense to take the guaranteed money).

C) If you’re trying to market a new product on a very limited budget, and you want that “mind-share”, it could make sense to go from a 20% solo discount to a 60% group discount if you consider you’re not getting a one to one ratio of active users and you can count that discount as an advertising cost. If I put together a little application in my “spare time” (I hear people have that) but didn’t have the cash for a big marketing drive, it could make a lot of sense for me to take 2% of the $30 (after discounts and charity money) for 50K packages as a way to get income into my coffers to spend how I liked (marketing or a new computer… or pay bills, whatever) I would then be “up” thirty Grand and maybe 5000 active users. That position would put me in a much more marketable light to be able to continue to sell my app, develop my app (and get upgrade money), etc.

To Wrap up, I can understand the “devaluing your software” position, but I can also understand the “it helped me get users and cash I wouldn’t have otherwise had” position. In the long run I don’t think it’s hurting the developers who participate (especially since they’ve moved to a percentage based model), and I don’t think it’s really hurting the mac shareware community as a whole. It probably has hurt those with competing products (I know I am less likely to buy Acorn now than I was before, but I also spent full price for the excellent Voodoo Pad Pro a couple years ago from Flying Meat and if it turns out Pixelmator isn’t working for me I’ll certainly be re-visiting Acorn as an option for my limited photo editing needs).


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January 26th, 2008 at 11:53 am

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