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MacHeist "Week of Mac Developer" Causes Schism
ernesto99 writes "MacHeist began selling a software bundle of ten highly sought-after OS X applications last week with the stated goal of raising the profile of Mac shareware developers. 25% of the money brought in goes to charity. The bundle sale will go down as possibly the biggest success in Mac shareware history, as total revenues are approaching $650,000 after only six days. But some observers, including Daring Fireball's John Gruber, have called into question the ethics of MacHeist. MacHeist advertises itself as 'The Week of the Independent Mac Developer,' yet the MacHeist organizers stand to make vastly outsized gains relative to the very developers they have championed. Gruber calculates that MacHeist will record double, if not triple, the profits of all ten participating developers combined. (In fact the promotion has done so well that the promoter-to-developers profit ratio now stands at about four to one.) In an interview, Delicious Library developer Wil Shipley defends his involvement in MacHeist, saying that the publicity and reach of MacHeist has already paid him dividends. The whole affair has created a heated dialogue, resulting in a direct clash among some of the biggest names in the Mac community."
While I've never worked on a retail shrink-wrap piece of software, I've yet to work on any piece of commercial software in a corporate setting where the developers get anywhere near a quarter of the revenue generated from the sale of that software.
If the individual developers have agreed to the terms and conditions of participation, and said terms and conditions were clearly stated, what's all the rucus about? I'm failing to see how this is newsworthy....
I normally do not spend money on Mac shareware, but MacHeist offers one price for a bunch of apps which makes it worth it, because the odds that I'll end up using frequently one or more of them is high.
On the other hand, I would not have bothered to download and try each of these sharewares individually, because I hate using crippleware. I don't think crippleware (unpaid for shareware) really gives me a good idea whether I'll use it or not. In fact, normally I won't use crippleware because it is annoying.
I bought the bundle and I'm very glad. It was clearly worth it for me.
Like me, I suspect most people who bought the MacHeist bundle would not have bought the software on normal terms. I think that the developers should be glad, since it brings them more revenue without any expense on their part.
Compared to typical Retail sales, unless they reach there $400K target, it is approaching, or at least similar to typical Retail markup.
If you ask these developers what they expect to make in a typical week, and it's less than $5-8K then the fact is, they are increasing their cash flow.
Which may increase their sales in the next Upgrade cycle.
Speaking as a devoted Mac user and advocate for the platform, this whole affair has shown the worst aspect of the Mac community and why so many people continue to write off the platform (an assembly of particular hardware and software) because of a small percentage of the user base (an assembly of people who use the hardware and software).
Ultimately, though - and I say this as a more-than-daily reader of the Daring Fireball website - John Gruber of Daring Fireball is to blame for this. He is the one that posted the initial exposé of what he perceived the financial situation of the MacHeist promotion to be, even though he admitted multiple times in the article that he didn't have any first-hand knowledge of how the thing was actually structured. John is often a fine voice for the Mac-core community, which is why I read his site, but this is one of those times (and there have been others) where his sharply-worded articles have done much more harm than good.
Ultimately, it benefits no one for developers to be running around calling each other four-letter names because of perceived injustices. Both sides - but especially the anti-MacHeist side - need to stop talking at a volume and profanity level that makes casual observers think somebody is being tortured. Perhaps both sides should just stop talking about it period.
One thing is very clear from this: while the Mac-core constitutes probably fewer than 5% of all Mac users, they continue to give a bad name to the entire assembly of very well-designed and nice-to-use software and hardware. As they've done practically since day one. Am I the only one that thinks they sound like televangelists sometimes?
I really didn't know about this and besides this "schism" thing I think it's incredibly interesting that they managed to sell $100K+ worth of software per day for six days. This tells us a lot about the relative size of the OS X installed base and the willingness of said base to buy software. I think the shareware model could do a lot for the Mac, much as it did for the Windows platform 10+ years ago. The more quality software (applications) available for a platform, the more people will be able to consider switching to it.
Where there's a good margin, competition will follow.
Quite. The developers should look at this as money that they'd otherwise not have got. That someone else made more money at the same time is largely irrelevant.
Engineering is the art of compromise.
Oh please, you paid what you thought was a fair price. Now you're upset because someone else gets a better one than you did, completely by chance? There's no reason to begrudge anyone because they got lucky or because the developers found a way to pick up some extra cash -- You got exactly what you paid for.
But, why? You obviously were willing and able to pay the price you did for a product you felt you needed. If in a week he offered a sale, would you be as outraged? What about if in 6 months he has a new version but continues to sell the old version for half-off? Differential pricing doesn't hurt anyone (at least for this type of product and this type of differentiation).
Video game consoles sell at a premium when they first come out, and people are willing to pay that premium. Later on, the price goes down, people who wanted it but couldn't afford it before pick it up. The manufacturer still turns a profit, but a smaller one. They still get more product out into the marketplace.
What if he sold at a different price to China, Zimbabwe, and the US? It it still as heinous?
The number listed on Macheist.com is the total raised for charity, not the total sold. To get that you need to multiply by 4.
Right now it's at $160,062. That comes out to $640,248 of shareware sold at greatly discounted prices. That's a LOT of sales.
I think the largest part of the gain for the participating developers isn't actually the money they'll make through the bundle selling well. It's going to be more through the fact that when you get over ten thousand additional users of your program, some percent of them will click the buy button when a "Version 3.0 is now available. Would you like to upgrade?" pops up a few months down the line. They also stand to gain more sales at regular price due to the "wow factor" when people who bought the bundle show off the beautiful programs like Delicious Library to their friends. Macheist is centered around the power user demographic, and there are a lot of average people out there who will want this stuff.
And that BTW is how Richard Stallman came up with the whole idea that software represented an artificial economy. When in actual practice a good costs:
-- a lot to make the first copy of
-- very little / nothing to make additional copies of
-- a lot per copy for support
The obvious places to charge for the good are on support and initial development. A per copy charge is completely irrational given that price structure for production.
I, for one, denounce the Catholic Church overlords.
... and then they built the supercollider.
Slap fight.
He tried to kill me with a forklift!
While the MacHeist promoters have gone out of their way to actually _move copies of OS X shareware_ and move them swiftly, Gruber is being nothing but a negativist naysayer, and he's among the MacOS advocates that make me ashamed to be a Mac user every time he opens his mouth. Worst of all, at a fundamental level, he's engaging in this behavior in order to drive up hits to his blog, and drive up his profile in the community. It's all about increasing his personal revenue at the expense of others. He's nothing more than a John Dvorak-style rabblerouser for the iCult. I miss the days when NeXTStep was a largely disused platform, because back then, you could have an intelligent conversation with a core-level advocate. Now the quality of discussion is just 2 or 3 shades of gray different from ESR rambling about guns. The bottom line: Business is business. The MacHeist bundle is good business. The bundled price is going to encourage people who've never dropped a dollar on shareware ever at any point to drop dollars. One dollar, or even two, recovered for a shareware author is significant versus the zero that often gets spent on their software, often by scofflaw-like long-time piratical users. The bundle also achieves exposure for some of these products that would've been unattainable otherwise. Would I, or anyone I know, ever have spent money on a Pangea game? Nope. Never. iClip? Maybe.. I know others that like it.. but I shy away from user interface altering things like that. For FotoMagico? At $79 normally priced? I would've thought them crazy. Now that I have these things from the bundle? Hooray! Quite cool software. I'm sold on the benefits. I'll be an upgrade customer for at least some of them. The same goes for at least a few other bundle tools. Getting a license for TextMate and Delicious Library on the cheap is an amazing deal.. and now that I'm invested, however tinily at the outset, each of those developers has potentially made a long-term sale that will result in many times the revenue lost on the individual copies in upgrade revenue. Newsfire's author was particularly cognizant of this issue.. the MacHeist license doesn't come with lifetime upgrades.. but for a tiny figure of 10 dollars more, it's an option right out of the gate. Instant revenue turnover. It's a good, good thing. I honestly wish that I -had- subscribed to Gruber's blog in the past, so I could have the pleasure of saying to him: "No, John. No holy wars. No whining. Sit down, shut up, and give me my money back."
I generally agree with the parent, that if I as a developer agree to give away my product for free to increase visibility, no one should complain about that. And as the sibling post says, everyone wins in this deal...
TFA is highly misguided.
But this deal is much BETTER than that. First, promotion is hard. The idea that promotion bringing much greater sales isn't worth anything implies the speaker doesn't know anything about business. I bet there's NO product where you couldn't spent 100,000 in advertising correctly and manage to get 10,000 in sales. (Obviously, that would be stupid.) But the better you do it AND the more money you spend on it the more sales you get. The idea that MacHeist didn't bring TREMENDOUS value to the table in terms of successful marketing.
Second, MacHeist put up all the money for it. They took a gamble on their successful promotion. If they hadn't sold enough, they'd have lost a lot of money. The developers only risked the possibility that a lot of people might get licenses to their software... adding to their mindshare and marketshare in historically valid software marketing. (The traditional downside is that people will see your software as valueless if you gave it away... but wait, in this case they paid for it.) The other way to run MacHeist (the only really different one I can think of) is to COLLECT a bunch of money from each developer for marketing and then split the profits. The analogy of a "manager or agent" from TFA is NOT appropriate. An agent MIGHT loan some money to an artist for advertising expenses, but they DO take that money back out of the artist's cut.
Third, TFA's quote: "...developers a flat fee in exchange for an unlimited number of licenses tilt grossly in the favor of the MacHeist team" is OBVIOUSLY wrong. _Perhaps_ the AMOUNT of the flat fee was too low... But $1,000,000 would still be a flat fee, and no one is claiming that would've been unfair to the developers. This deal is structured how it should be: The developers have no differential say in the success or failure of the sales numbers. Their contribution is static (existing software) and unchanging. But everyone wants MacHeist to have a strong incentive to sell a lot of copies. SO MacHeist should get the vast majority of the value from the Nth copy sold as N approaches a high number, to make them make maximum marketing effort to get to high numbers.
Entire TFA is based on the idea that MacHeist being really successful makes them evil. Profitable marketing and distribution engines without heavy developer investment are EXACTLY what shareware needs. The more profit they can make without costing the devs, the better.
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How many of you who say there isn't a problem here, but speak out against the RIAA when it comes to music? I don't see any difference.
Business as usual. get over it.
[100% ISO 646 Compliant]
SVM, ERGO MONSTRO.
We don't speak out against MacHeist because they're not treating paying customers like criminals.
/. zen: Imagine a Beowulf cluster of Beowulf clusters...
Also, with software there are a LOT of costs in QA and support that simply don't exist for music. I'm sure there is someone somewhere that you can call that will tell you which side of the CD goes down in the CD player but for the most part once a disk is sold, the RIAA is done with it (unless you try to copy it...).
I would venture to say that software companies have significantly higher costs than the RIAA, at least in those regions where they havnt forced themselves to have higher costs (such as paying people to play your music, paying lawyers to sue your fans, etc).
Bottles.
Their crime was to take on upfront risk against a potentional profit - and succeeding.
QA and support don't apply here - these apps already exist, have already been in distribution, and have already won awards and whatnot. Any support and/or QA issues are the sole responsibility of the developer- the one getting only 25%. It's not like MacHeist has any distribution costs, either, as the software is downloaded, and licenses are acquired through email.
This is WHY we have record companies that pay for big marketing and why artist perfectly capable of putting their own stuff on iTunes still want to be part of a "label". I don't have a new mac yet, but I'm almost curious to buy this while it lasts! I've thought the small companies should band together like this for a while. After all, the one turn-off of the Mac shareware scene for me is that there are so many little companies that want $39.95 for little utility apps... not that I'd mind paying, but tracking all those little charges from year-to-year and version-to-version would be a real PITA over time! In the online world it would make sense for a website to act as "publisher" and collect a bundle up for a better price, and give a cut to the developers. After all, a $39.95 app probably costs most developers $10 to $15 just to invoice and bill you.. even online.. after credit card fees and labor charges to have somebody monitor it. If they drop the cost in the bundle, and let somebody else pick up the cost of invoicing they probably end up ahead. Perhaps the MacHeist people accidentally stumbled upon a better way to get developers PAID for their work!!!
I'm fine with business is business, as long as it is represented honestly.
The MacHeist folks were pushing this bundle as being much more beneficial to the independent developers than it really was. Case in point, several folks have said "Hey, I wouldn't normally buy this -- so they got an extra sale from me and I feel better about supporting the developer." The reality is that independent developer got maybe a $1 (if they're lucky) from the guy and can only pray that they won't have to answer a single support call.
While I don't agree with the terms of the bundle (and would decline the offer myself), I don't have an issue with them making the deal. I *DO* have an issue with them marketing it as benefiting the small independent developers. If they would have left that out -- I think it wouldn't be the issue that it currently is in the community.
Business is business and being dishonest about your motives is being dishonest about your motives. But of course, the whole point of their "Week of the Independent Developer" was to take advantage of the belief that buying this bundle was a way to support the efforts of the developers involved. The facts thus far seem to question whether this is actually the case.
It's not unlike a charity that claims to help some disadvantaged kids/group and it turns out only 5% or less of the contributions ever makes it to those kids/group. Would you be as willing to partake in that charity if you knew that 95% of it went to pay for lofty salaries, corporate perks, and what not?
I see a few significant differences:
:)
1) the developers participated willingly in this promotion ( I believe... sorry, didn't RT full FA. )
2) this was an INCREMENTAL distribution channel to what the developers already have in place
3) there is nothing preventing the developers from continuing to sell the software elsewhere, or do other promotions in the future with the SAME content.
4) The developers still own the content and all rights to it.
Try that with anything a musician records on an RIAA-controlled recording contract.
MadCow.
I used to have a sig, but I set it free and it never came back.
Correct me if I'm wrong, but my understanding is that this situation is about a group of developers that sold resale rights for a fixed sum and then some had seller's remorse after they saw how much product the reseller moved. No piracy there. That isn't much different than a former employer of mine selling their vertical application I helped develop for tens of millions of dollars per license and while paying us grunts in the trenches tens of thousands.