A little while back, Scott Stern and I wrote a paper that asked “Is there a market for ideas?” The paper has since been published but is also available here. The paper noted that while many ideas are traded there do not appear to be organised markets to facilitate such trading. For patents, there have been attempts such as OceanTomo but these are few and far between and where they exist, they suffer from thinness in trades.
With that in mind I read with interest reports that an app developer was going to try and auction his ‘Flashlight’ app on a platform called Apptopia. The reserve price was $1 million but what interested me was the platform. Apptopia have some funding behind them and aim to become a marketplace for apps. While the Flashlight developer is looking to cash in what amounts to a risky asset with a solid revenue stream to funnel into current developments, the platform is supposed to provide opportunities for app developers to sell their apps to larger corporation — perhaps those who want to brand an app someway.
Looking at the site there are plenty of apps for sale but few seem to be ‘doing well.’ Of course, that is the point. You basically want the apps to transfer ownership to someone who can improve them. It sounds like a useful platform.
But in looking at the site, I could only find one that had even a bid on it. It was a flight search app. The site has been going for some months so that suggested that thinness was emerging on this platform too. Nonetheless, it seems that 65 apps have been sold so there is some activity. If you are an app developer and your app seems to be struggling, it may be worth giving this a shot.
Some of the issues involved were revealed in this blog post. Put simply, Apple does not make transferring easy. Want to transfer ownership? It pushes towards pulling an app and relisting it. That is fine for apps that weren’t doing well but for ones with good ratings that is costly. A business can also purchase the developer account. Again that is fine if you have one app to sell but what if you were just selling one of many. Basically, Apple haven’t got with the program here.
What is interesting though is that the listings bring with them disclosures as to how apps are doing. For instance, the Flashlight listing showed a healthy amount of revenue per month despite the fact that the app had not been updated for 2 years. It was cycling downward but not that quickly. And what is interesting is that it still did well as a $0.99 app despite seemingly hundreds of free options available in the App Store. This is what a solid set of 5 star ratings gets you.