Everything Jared Sinclair did with his mobile app was on the money. It just didn't make him enough money.
The creator of Unread, an RSS reader app that allows consumers to discover and follow their favorite writers, attracted considerable attention recently with a blog post that goes into great detail about the financial results of his efforts around development, marketing and paid downloads. To some extent, the news isn't surprising: like many developers, Sinclair has discovered that very few people will hand over money up front for even the most popular apps. However, even with what you might consider considerable success--Unread made a combined total of $42,000 in App Store sales--his after-tax take-home pay was really $21,000.
His conclusion? You'll never make a living at app development without in-app purchasing (IAPs, which is becoming a controversial tactic) or subscriptions:
I have grave doubts that any solo developer would have the capacity to ship and maintain either kind of business working alone. She would probably have to consolidate her business with other indie developers in the same position. The marketing budgets of the major competitors makes me doubt that even a consolidation strategy is tenable.
As depressing as his blog post may be, Sinclair should be applauded for offering the kind of dirty details that tend to get generalized in the industry research around app monetization. That said, the financial prospects of Unread, and scores of apps like it, might not be as bad as all that. This was a look at an app's first year. Over time, it's possible an app like Unread could contribute a growth path which, coupled with IAPs, video ads or other strategies, could double or triple that $21,000.
This is also the story of one app, not a handful of apps which become part of a portfolio of products that generate incremental revenue over a period of time. That said, Sinclair was working at this full-time, and there is obviously a limit to how much time a solo indie developer can spend on the marketing and promotion of a particular app. The extent to which developers can juggle multiple projects--particularly more lucrative work in enterprise apps--might ultimately determine who survives and who doesn't.
The first few years of any business are challenging. Our recent coverage of Vision Mobile's Developer Economics Report shows that, far from being a monetary failure, Unread is above what Vision Mobile calls the "app poverty line." For an app that cost $4.99, his results could be considered a resounding success. I hope Sinclair can stick with it and provide a more positive update a year from now. Unread doesn't have to be a cautionary tale because the future of the app economy is still largely unwritten.--Shane