Its fairness, not greed!

I woke up this morning to news that an iPhone developer had begun voluntarily releasing their sales data. This set off a small flurry of discussion and retoric around the iPhone / macintosh part of the blogosphere. Why aren’t developers (especially small developers) more transparent?

In his post, John Casasanta theorizes the reason is that developers don’t want to provoke envy (or conversely allow others to gloat.) I disagree — the main reason is pricing fairness.

Deep inside, there is a part of everyone that wonders why software isn’t free. After all, there is zero cost to making one more copy. Our sympathies are mixed if a small-time developer  happens to write a small application that ends up making millions of dollars in sales due to popularity. Especially if we learn he already has a full-time job, and uses the extra money to play slot machines. In a pure capitalist world, you wouldn’t need to “position” price, but consumer economics works a lot differently.

“Fairness” plays a complex role in our decision to buy something, and must be handled carefully in the messaging of a product. For instance no one would buy bottled tap water, because the perception is that tap water is “free”. Companies of any size, from P&G to your local newstand have to play a game of ensuring there is a good story behind price if they want to play the marketers traditional game of cost arbitrage. For an excellent view into this process, have a look at this article about the development of Febreze.

Because software has nearly infinite economy of scale, it presents a particularly vexing form of this problem. Sales figures are typically not “on message” in establishing the right to charge a certain price — they can lead the potential or future purchaser to examine profit-motive rather than to examine quality or reputation.

Casasanta knows this well. In his MacHeist bundles, he is extremely careful to mention how much money is also being raised for charity. And his post here is brilliant in driving more awareness of these two products, creating a very sympathetic and educational tone.

I’m always open to learning something (especially given my willingness to scatter my opinion around the Internet), so let me know what you think!