Wanna see what a full blown network effect looks like, kidos — check out Netflix earnings.
More Subscribers ⤵️
More Revenue ⤵️
More $$ for Original Content and Licensing ⤵️
More bids won against networks ⤵️
More content on Netflix ⤵️
More Subscribers
Network effects occur when usage increases the value of the product, as with Google or Facebook. With Netflix, usage does not increase value. It instead creates more revenue, enabling Netflix to invest in fixed costs, creating scale economies.
To illustrate, if Netflix were boundlessly funded in their early days, they could create a product that's just as valuable as it is today, even though they had no customers, and therefore no network effects.
The one caveat is that friends talking about shows with each other does create real network effects, but not what you're describing here.
A couple of years back I hacked together something similar and put it on github http://nkrode.com/article/autopilot
Most people seemed to want a lot more features than just easy publishing.
I'm the guy who runs Two Dollar Tuesday (I'm also a Mac App Developer):
A few reasons why you wouldn't necessarily do it every day:
At $1.99, he would have to sell more than twice as many copies as he is selling now to make the same revenue. Plus, he'd have more support requests to deal with. $1.99 may not be the optimal price point.
The reason to participate in any "bundle" like Two Dollar Tuesday:
- Mailing list: TDT has a mailing list of thousands of Mac users who've asked to receive the deals each Tuesday. We have a phenomenal open rate (last week was over 80%). MacUpdate, MacZot, etc., all have the same kind of thing going. Thousands of Mac users eager for discounted apps.
- Cross promotion. Someone looking for a discount on a different app might discover your app through TDT.
- The "limited-time effect" -- people are more likely to pay $1.99 for something if they know they only get one day to get it at that price. Were the price always at $1.99, you lose the sale/impulse buy effect.
Well, we could, but $4.99 is the price point we're comfortable with. We're trying this promotion as an experiment — TwoDollarTuesday helps get the word out, so hopefully, we'll end up selling enough extra copies to compensate for the temporary price reduction.
To add to @tinylittlefish's reply here, it might also have to do with perceived value. To the user, it feels like she will be getting an app within the quality range usually associated with $5 apps, but is able to get it for only 2 bucks. Something like that.
More Subscribers ⤵️ More Revenue ⤵️ More $$ for Original Content and Licensing ⤵️ More bids won against networks ⤵️ More content on Netflix ⤵️ More Subscribers