Among people who really, really want to believe that there's a huge market out there for selling content directly, the iPhone App Store has recently become "Exhibit A." The thinking is that all you have to do is slap together that perfect Steve Jobsian user interface that just makes it so easy to buy, and people will start forking over their money. It was part of David Carr's argument
when we debated newspaper micropayments. Except... there really isn't that much evidence to support even the claim that the iPhone App Store really sells that much. We were a bit skeptical
of the early reports that people claimed offered "proof" that people would buy all sorts of apps. Then, earlier this year, we suggested that it was an early warning sign
that so many apps on iPhones were never used at all or were used once and abandoned. Basically, that meant that people would test stuff out when they first got the phone, but sales would likely dwindle after that. More evidence was provided by an analyst firm that figured out how little money
Apple was making from app sales (which is fine -- Apple is in it just to sell hardware, but it suggested that app sales weren't quite as amazing as people were claiming).
Newsweek is presenting some more evidence -- albeit anecdotal -- that the iPhone App Store isn't making very many people very much money at all
. There are, certainly, a few folks at the top who are doing okay, but for most people there just aren't that many sales -- or the cost of getting those sales greatly outweighs the revenue that came in from them.
This isn't to say that the iPhone App Store is a failure. In fact, I'd argue it's been a huge success in making the iPhone significantly more valuable. But as evidence that there's a huge market out there of people willing to pay for content if it's just packaged up nicely? There's just not enough there to be convincing.