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."

Comments

I fail to see why there is any controversy

[brokeninside]

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.

Re:I fail to see why there is any controversy

[Anonymous Coward]

Bullshit. This may be true for large corporations like Adobe or Microsoft, but what we're talking about here is small developers. These are typically one-man shops that rely on these sales for a living. Piracy does hurt them. If their software isn't selling due to piracy, they're forced to go out of business, meaning the people who did pay are now screwed, as there will be no support, no upgrades, nothing. All because someone decided that it "hurt no one". You, my friend, are a fuckwit.

Re:I fail to see why there is any controversy

[bluephone]

I'm not sure if this is poor sarcasm, or if you're real. If you're real, you are the posterboy for software piracy. Small software shops of one or a few people are significantly hurt by software piracy. Granted, MS isn't going to wind up laying off 25% of it's workforce if a million copies of Vista are pirated, but a small shop that sells their ware for $25 a pop is missing out on $1,250,000 if only 50,000 people get a copy of Widget 3.0 via bittorrent, and that's more than enough lost revenue to go out of business. Now, I know, you're going to say "They still have the software to sell! They lose nothing!" But if even HALF those people were going to buy it, but decided not to because, meh, it's already here... That's $625,000 that they DO lose.

I'm not going to be stupid and say software piracy support terrorism or drug use, but to say it hurts no one is a fallacy.

If the individual developers have agreed.....

[chevman]

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....

Re:If the individual developers have agreed.....

[John Nowak]

Exactly.

1. MacHeist makes a lot of money. They obviously win.
2. The developers agreed to participate because they thought it was a good deal. They win too.
3. Customers are buying this package like crazy. They also win.

What's the problem exactly? Yes, it could be "more fair", but as it stands now, all participants are voluntary (in a true sense) which certainly makes it fair in my book.

Re:If the individual developers have agreed.....

[dr.badass]

what's all the rucus about?

The ruckus is that MacHeist's professed goal is to help the Mac shareware community, but in the end MacHeist is taking a far larger share of the profits than the participants, and due to the structure of the deal, the greater the sales, the larger the discrepancy becomes.

Re:If the individual developers have agreed.....

[Thenomain]

It's newsworthy because people who aren't involved are trying to be heard. MacHeist claimed to be promoting Mac Independent Developers, so really they stuck their foot into it with this line. Gruber (and others) are saying that MacHeist has no interest in the general state of Mac Independent Developers (and/or asks MacHeist to prove it). MacHeist claims that these people are sour-grapes for not being invited and are riding on the coat-tails of Mac Heist's success, plus that any popularity is good for everyone so quit yer bitchin'. It became a pissing match on a grand scale, and that's only half of what makes it newsworthy.

Of all this, only two things are really known:
1. MacHeist bundled a bunch of apps, made a bunch of hype, paid out a flat fee to developers, and gets to keep everything else.
2. Some people are very vocal that this is a bad model to follow.

Most of the Pro-MacHeist defense comes to, "Who loses?" I think this is disingenuous because the best answer is, "We don't entirely know yet." This is not a reason to stop talking about it. In fact, that's a only a good reason to continue talking about it.

And that's the other half of what makes this newsworthy.

Re:If the individual developers have agreed.....

[Anonymous Coward]

That's what the involved developers say also; and yet...

I've read most of the articles and threads about the controversy and I think it's great. Yeah, I think the controversy is great, not the 'success' of MacHeist. I think it's great because many of the purchasers are now aware of how poorly the developers were compensated, and (while defending their purchase) will demand more equitable compensation for the creators next time.

Many people who bought the bundle initially felt good about supporting independent Mac developers. Now the feeling is that the promoter pulled a fast one.

Re:If the individual developers have agreed.....

[clifyt]

"Who has been wronged, exactly?"

Just because someone makes a stupid decision, all of free will, doesn't mean they have not been wronged.

I co-owned a company that does the occasional software development that got involved (not of my doing) of something entirely similar to this. All in all, the partners thought it was a GREAT idea and pulled enough votes to get past my normal roadblock. Ended up devaluing the software to the point folks felt it was only worth a couple bucks and then the piracy rates went up (thats another story). Ended up just licensing the stuff wholesale to someone else and cutting the losses. Come to think about it, I think that was why the business went under.

As for folks being wronged, from what I get, the developers were told they were all getting exactly the same deal -- yet were told not to discuss the details with anyone else. Turns out, they were all getting different 'equal' deals...or so some of the developers have hinted. Sounds a bit like fraud to me if this is true.

Having said this, I picked up a bundle. Sounds like crap to the developers, but you know what -- their ain't no law to stop people from making bad deals (nor should there be).

Re:If the individual developers have agreed.....

[Paradise Pete]

What's the problem exactly?

It hurts the industry. For one, it reveals how much those developers who participated really value their work. I was rather disappointed to see TextMate in there. It is an extraordinary editor, and the "retail" price of it is higher than the price of the entire bundle. I bought it before this bundle. It was pricey, but eventually I accepted that the developer really thought it was worth that much. OK, so I paid.

And now I see that he really doesn't think it's worth all that much. I can't see it as being promotional - I think pretty much anybody in his target audience is already aware of it.

And the developers who chose not to participate - who think their product is worth more - will be hurt. I will be a lot more hesitant to pay full price for something else. Because I will remember the foolish feeling of having paid full price when I saw this bundle.

I think basically it says that shareware is not really worth what people are asking. And shareware is in a funny position. It's not simply fighting "should I pay or do without," but it also struggles against "should I pay or should I find a serial number." The greater the "overpriced" perception, the more like people are to choose the latter.

Re:If the individual developers have agreed.....

[nettdata]

And how have they NOT helped the shareware community?

I bought one of these, and now have copies of software I've never even heard of before.

When it comes time to update to the next version, who's getting the cash? Macheist? No.

People are just pissed off that they aren't sharing the profits as a percentage of the gross income. That's stupid and short-sighted.

Maybe it was the simplest arrangement to deal with in the long term? Maybe there was no guarantee that they would sell ANY of these packages, but still had to pay the devs the cash, regardless? Maybe they took all the risk for the sales/marketing? Maybe they didn't want to deal with the headaches of any future royalty payments for upgrades, etc?

How about the fact that the developers entered into the agreement and THEY seem to be happy with it, so everyone else mind their own business and quit making a stink where there isn't one?

Re:If the individual developers have agreed.....

[pebs]

The Macheist version of Textmate doesn't include the upgrade to the upcoming Leopard version, whereas if you buy it direct it does. I noticed in a few cases, Macheist is basically the developers giving out their current version before a new version comes out.

Re:If the individual developers have agreed.....

[dangitman]

It hurts the industry.

That's a pretty strong statement, that really requires some proof.

For one, it reveals how much those developers who participated really value their work. I was rather disappointed to see TextMate in there. It is an extraordinary editor, and the "retail" price of it is higher than the price of the entire bundle.

Why? The value of something, and its price of it are not related. This would mean that all F/OSS and freeware is worthless, and that Microsoft products are the pinnacle of software quality. I would suggest you are the one devaluing the software, if you only think of it as a price tag, and can't appreciate the developers' work independent of how much it costs.

And the developers who chose not to participate - who think their product is worth more - will be hurt. I will be a lot more hesitant to pay full price for something else. Because I will remember the foolish feeling of having paid full price when I saw this bundle.

That doesn't make much sense. Why would getting this cheap stop you from paying full price elsewhere? To my way of thinking, it gives me more money to spend on other shareware. Example: when downloading one of applications from the Macheist bundle, I saw a link for an interesting product (from a different developer) on their website, - so I went and bought that as well. That developer happened to be Boinx, and I have been thinking about getting their iStopmotion product for quite a while - and getting a copy of Fotomagico in the bundle makes me think more of them, so I will probably go and buy iStopmotion as a gift for someone.

Basically, this is the beginning of a shareware spending spree for me. I probably would be buying Playstation games and gaming accessories otherwise, but I decided to spend that money on shareware this week.

but it also struggles against "should I pay or should I find a serial number." The greater the "overpriced" perception, the more like people are to choose the latter.

And this reduces the "overpriced" suggestion by selling for very reasonable prices. So, people are more likely to buy this than steal a serial number, than they normally would. Let's face it, quite a few shareware titles are overpriced. Software developers aren't a charity, they need to compete in the real world with real economics, just like users do.

MacHeist made me spend money

[Anonymous Coward]

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.

Re:MacHeist made me spend money

[Foerstner]

I hate using crippleware. I don't think crippleware (unpaid for shareware)

Your terminology needs help.

Freeware: "Here's a program."
Shareware: "Here's a program. If you like it, pay me."
Sponsorware*: "Here's a program. It wants you to buy a new Lexus."
Postcardware: "Here's a program. If you like it, send me a postcard from your home town/state/province/country".
Crippleware: "Here's half a program. Pay me and I"ll give you the other half."
Nagware: "Here's a program. Pay me. Pay me. Pay me now. Have you paid me yet? If you pay me I'l shut up."
Expireware: "Here's a program. If you don't pay me, I'll take it back in a week."

Now, true shareware is virtually extinct; most of it is now nagware, crippleware, or expireware. But please don't confuse the issue any more than it already is.

*This used to be "adware," but "adware" has mutated since then.

Compared to retail sales it's likely very fair

[topham]

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.

John Gruber/Daring Fireball to blame

[cshbell]

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?

20% of lots or 100% of nothing

[EmbeddedJanitor]

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.

Re:20% of lots or 100% of nothing

[mmeister]

You guys are high.. it's not 20%, in fact it gets down to around 2-3%. If ONLY it were a 20% cut.

As a developer, I know that there are costs associated with the marketing and sales of my software, but I think 95%+ of the profits is too high a price. It is effectively worse than the mechanism that RIAA uses. I don't believe that RIAA does flat fee contracts for artists music. It may be a tiny percentage, but at least it's a percentage. The difference is that with flat fee, each additional copy sold means the price per copy goes down more and more.

Wil Shipley is probably doing it because DL 1 has been out for quite some time and he's soon to release Delicious Library 2. So this becomes a promo giveaway of the last version, with the hope of some of them upgrading to DL 2. I doubt he would be giving away Delicious Library 2 in this ordeal.

Re:Users too

[shepmaster]

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?

regarding the schism

[dangitman]

I, for one, denounce the Catholic Church overlords.

Just one thought comes into mind

[3.5 stripes]

Slap fight.

Re:GPL

[Hektor_Troy]

Problem is, what if your application is made well enough, that you hardly ever get any support requests? Yes, it happens - especially when the application comes with well made and thurough documentation.

Then it still costs a fortune to make, but we're not supposed to charge for that.
Still costs next to nothing to make copies of (disregarding the cost and time of burning to a media or traffic for downloads)
Still costs next to nothing to support.

Where are we supposed to make money?

If our application costs $100,000 to develop, implement and document, and we expect 10,000 users, and expect maybe one percent of our users requirering our support, are we supposed to charge them $1,000 for support, just to break even? Or should we be allowed to charge $20 per copy/licence to make some money?

Charging for support can be profitable I suppose, but I believe it also breeds an artificial need for bad documentation and buggy software. After all, if the documentation is perfect and the software hardly in need of support, where are you supposed to make your money?

I'll call the WAAAAHbulance.

[The Monster]

Differential pricing eh? $40 for me, $1 for someone else so you can get an extra $1? Just doesn't sit right with me.

Was the software worth what you paid for it? If so, you made a good decision. What someone else paid is Ear Elephant. Most products are sold at different prices at different times (ever hear of a SALE?), for volume discounts, or even humanitarian reasons (drug companies routinely charge much more for their products in the US than they do in Africa, where the patients can't afford to pay as much.

Business as usual. get over it.

Re:How many..

[zaxus]

We don't speak out against MacHeist because they're not treating paying customers like criminals.

Noooo, that wasn't the crime

[goldcd]

Their crime was to take on upfront risk against a potentional profit - and succeeding.

Re:How many..

[symbolic]

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.

Re:Motivations. Pure and Otherwise.

[mmeister]

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?