Could the Netflix Model Boost Enterprise Software?

A recent business-model innovation by a Mac software developer suggests that companies can rethink the way niche software is sold—and that could have potential for associations and industry vendors.

When it comes to apps and tools, I’m a bit of an obsessive—I’ll try all sorts of random things, big and small, until I find something I’m truly comfortable with.

Unfortunately, the App Store economy has never been built to accommodate this sort of experimentation. You download an app, you use it once, and you just wasted three bucks. It’s a better state of affairs than we had in the shrink-wrap era—when you had to get in your car, hit the Best Buy, plunk down $100, get home, and go through a long install process before you realized you grabbed the wrong app and have to head back to the store—but it’s still pretty annoying.

But a recent player in the Mac world suggests a future path for apps that could reinvent the software space in an important way. Setapp, a platform launched earlier this year by the developer MacPaw, is a Netflix-style refresh of the App Store model that Apple might even want to take a look at.

For $9.99 per month, users can download an unlimited number of Mac apps from a selection of around 80. Some of the options are popular, but somewhat expensive, like RapidWeaver, a tool for developing nice-looking websites without any coding. Others have seemingly limited utility, like NetSpot, a tool for helping you find weak WiFi signals in your home. (MacPaw, best known for selling CleanMyMac, also heavily curates the apps, solving a problem common with the App Store—which, for all its perks, is known for repeats and low-quality apps.)

It’s a huge change from the App Store model, and in many ways it takes advantage of the fact that some developers have found Apple’s policies for its App Store to be controversial. It also feels like a great deal: If you bought these apps on your own, they’d cost thousands of dollars, and you’d have to pay for upgrades.

But I also think, more specifically relevant to the association space, that it highlights new forms of discovery for tools that would be considered niche otherwise.

Benefits for Users

From a user perspective, the platform feels like it has a good bang for the buck. For some apps that I’m interested in but I might not otherwise have paid for, like the ambitious-but-expensive text editor Ulysses, it’s a great way to kick the tires. It’s also a great way of introducing me to tools that I would have otherwise passed on but have found surprisingly useful—like TripMode, an app that controls what apps can use data when your internet access is limited.

From a discovery standpoint, the fact that I discovered TripMode at all is a point in Setapp’s favor. Because of the way TripMode works—by making changes to under-the-hood features of MacOS—I would have never found it in the Mac App Store, because Apple wouldn’t have allowed it. And I’ve found TripMode to be genuinely useful, because it allows me to turn off Dropbox when its data-hog tendencies get in the way on a slow web connection.

Benefits for Developers

Sure, it’s nice for me, but how’s it working out for developers?

The results so far suggest potential, if not dramatic growth. The Apple news outlet TidBITS reported in June that Setapp has drawn 10,000 paying users, along with 200,000 trial users—numbers that, if they hold up, represent $1.2 million in annual revenue that the Mac app ecosystem didn’t previously have. That’s not huge, but the platform has only been active since January, so it’s solid progress.

And while some developers taking part have said that the model has generated only a modest boost to their bottom line, numbers are starting to grow, and developers with niche apps are seeing some significant benefits.

“I feel I’m making more money since Setapp than before,” David Sinclair of Dejal Systems, whose server-monitoring app Simon costs $99, told TidBITS. “Some people might have purchased Simon directly instead of getting it via Setapp, but more people are discovering it via Setapp than before.”

Could Associations Learn Something Here?

Now, it’s a little early to say whether Setapp can change the app world, but it does feel like a model that associations could see benefits from in multiple places. Two ways I could see this working:

1. If vendors within your sector offer niche technology tools, they could be bundled in a similar way to Setapp, potentially creating a nondues revenue source or, alternatively, a member perk. This model offers an opportunity to create a standard kit of software tools for an industry, while giving a nod to the strategic partner relationships that keep an industry moving.

2. Vendors supporting associations could offer a subset of their tools in a subscription-style package deal, allowing for some testing and experimentation before an association pulls the trigger on a larger purchase, or perhaps using the service as a conduit to build more pluggable tools.

In some ways, the Setapp concept isn’t just the Netflix model or the Spotify model—it’s taking the software as a service (SaaS) business model a step further, and doing so in a way that benefits a broad number of companies.

Apple is gaining a lot of financial steam off its various services, but I can’t imagine they’re not giving this concept a close look. If the kinks can be worked out, it feels like the future of software distribution—especially for niche uses.

And associations are nothing if not niche.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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