Today App.Net announced that they are introducing a free tier to their previously paid-only service. This is fantastic news for developers. In my post last week about the financial realities of building an application for App.net the biggest problem developers face is the relatively small size of the customer pool. Adding in a free tier would seem to dramatically improve this situation.
In the first few hours since the tier was announced it has generated around 10x the normal sign-ups than when it was paid-only. That represents hundreds of new customers who are now looking for clients to use the service with. If I were an App.net client developer I would be looking with delight on that opportunity.
It isn’t all roses. The move to a freemium model certainly changes the dynamics of the ecosystem and creates all kinds of questions for the platforms future. The question now is whether the limits they put on free accounts will be enough to maintain the service’s revenues.
Since its inception App.net is framed itself as a user supported business. What if in 6 months when everyone’s accounts are set to renew they simply downgrade to the free tier? Or enough people do that the platform isn’t financially sustainable? I’m not sure that situation is likely but is certainly a new possibility that wasn’t there yesterday.
I’m @DavidSmith on App.net if you want to find me there.