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Chronicles

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Announcing the App.net Developer Incentive Program

Two important properties of a successful software platform are:  — A financially sustainable business model that can support both the platform and 3rd-party developers.  — Aligned financial incentives between the platform, users and developers.

App.net Dalton Caldwell

Context & Ripple Effects

App.net has spent its first weeks arguing it is a business-model experiment rather than a feature copy — the case made in August by GigaOM's 'not just a Twitter clone' argument was that charging users instead of running ads changes what the platform owes the people building on it. The Developer Incentive Program is the concrete version of that claim: money from subscriptions flows back out to third-party developers rather than to advertisers.

The pickup was broad — CNET, ReadWriteWeb, GigaOM, VentureBeat, PandoDaily, TechCrunch and The Next Web all covered the announcement on the day — reflecting how charged the platform-vs-developer question was in September 2012. Whether a paid platform can fund an ecosystem is the test App.net set for itself.

First-order effects

  • Third-party developers building on App.net gain a direct revenue stream tied to the platform's subscriber base, making App.net one of the few social platforms paying client makers rather than merely tolerating them.

Second-order effects

  • Developers choosing where to build now have a financial criterion beyond audience size, pressuring ad-funded rivals like Twitter to articulate why their own developer economics justify building there.

Third-order effects

  • If subscription-funded developer payouts prove sustainable, platform competition shifts from reach alone toward incentive alignment — a structural argument that user-paid platforms can support ecosystems that ad models structurally starve.

The trend: Social platforms are beginning to compete on how they pay third-party developers, with App.net testing whether direct revenue sharing from user subscriptions can replace the ad-subsidized ecosystem model.