The archive · Consumer Apps · Product decision · 2008–2011
Marco Arment kills Instapaper Free after paid-only tests lift sales
Marco Arment pulled Instapaper Free for good after paid-only tests lifted sales — betting $4.99-only beats a free tier that never converts.
Instapaper
What the business is
Instapaper is a read-it-later service: a paid iOS app that saves web articles for offline reading, synced through Marco Arment's web service.
How it started
Instapaper launched in the fall of 2008 as a $9.99 iPhone app by solo developer Marco Arment, who cut the price to $4.99 in June 2009 and never put it on sale. A separate ad-supported Instapaper Free (iPhone-only, with a single ad from The Deck in its list screen) sat beside the paid app and was downloaded about three times more often.
What happened
Last fall Arment quietly removed Instapaper Free from the App Store for three days: sales rose incrementally and nobody seemed to notice. On March 12, 2011, knowing he was heading into very strong sales from the iPad 2 launch, he pulled Free again for a month; sales rose again, and he pushed the return date back by another month. The break went well enough that he wrote about keeping Free out indefinitely.
How it ended up
On 28 April 2011 Arment effectively discontinued Instapaper Free. His math: most Free users would never give him even $3.50 — his cut of the $4.99 price — in ad impressions, almost nobody upgraded from Free, and paid sales rose whenever the free app disappeared, so the free tier was costing more than it earned.
Background
Instapaper is a read-it-later service built by solo developer Marco Arment: a paid iOS app that saves web articles for offline reading, backed by a sync service that costs real money to operate every month. The paid app launched in fall 2008 at $9.99 and settled at $4.99 in June 2009, never going on sale.
Beside it sat Instapaper Free, an ad-supported iPhone-only version downloaded about three times more often than the paid app. When Arment quietly removed Free for three days in late 2010, sales rose incrementally and nobody noticed. In March 2011 he pulled it again for a month around the iPad 2 launch, extended the break by another month, and then explained why he might never bring it back.
His economics were blunt: Free users cost development, support and server time, yet most never upgraded — 'Free was good enough' was the most common reason he heard — and their ad impressions were worth far less than the $3.50 he kept from each $4.99 sale. The free version also defined Instapaper's image for everyone who never saw the paid features, and it collected worse reviews from customers unlikely to pay for anything.
Arment argued that when the only way to try an appealing app is to pay a small amount, enough people do — he noted that even 1% of iOS owners would mean about $5 million — and that he did not need every customer. He framed the episode as an experiment shared for the community, while warning that every app is a special case.
What has to be true
- Two quiet experiments produced the same result: sales rose and almost nobody noticed when the free app disappeared.
- Conversion from Free was close to zero — nearly all paid customers bought the full app directly, and Free users said it was 'good enough'.
- Free users cost real money in development, support and server time, while their ad revenue rarely approached the $3.50 per-sale cut of the paid app.
- The limited free version was the only Instapaper many people ever saw, so it shaped the product's image and made the paid features harder to sell.
- Arment concluded he did not need every customer: a paid-only app at $4.99 could do well even with a small share of the iOS market.
What can be applied
A free tier can be its own worst competitor: when free users rarely convert and monetize weakly, removing the free version can raise revenue and improve the customer mix — test it quietly first.
Aftermath
As of 28 April 2011 Instapaper Free had been off the App Store for nearly two months, its return date pushed back twice, and Arment said he might keep it out indefinitely. The $4.99 paid app remained the only version, and he explicitly tied the move to his stance that he was in the business of selling a product for money rather than serving every possible customer.
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