TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Manton Reece thinks allowing fully free applications on the App Store, and exclusive distribution on the App Store, are forcing Apple to pursue subscriptions, in-app purchase, et al:

Free apps and the problem of exclusive distribution are linked. Get rid of free apps, and the store can support itself naturally. Get rid of exclusive distribution, and Apple can be more creative about charging developers who do want to participate in the App Store. If Amazon isn’t happy with Apple’s terms, users can install the Kindle app outside the store and it doesn’t cost Apple anything to maintain.

Apple, want to charge 30%? Go for it. Want to make the submission rules more strict? Fine. Want to adjust how you run the App Store to reflect what’s happening in the market? No problem. Just give developers an out. We are going to be back here year after year with the latest controversy until exclusive app distribution is fixed.

(Via Brent Simmons.)

Read the full piece; it’s a very interesting explanation for why Apple’s pushed these policies so heavily, and absolutely possible.

I don’t think, though, that (1) disallowing free applications and (2) allowing app distribution outside the App Store will solve the problem.

The first objection Apple would make is that the App Store exists not just so Apple can generate more revenue, but because it makes for a simpler platform. Users don’t need to hunt through the Internet to find an application they want—they just search for it in the App Store. All applications available for an iOS device are available only in the App Store, and that’s a much simpler concept for a new user.

That’s good for everyone, of course. It’s good for users, because it’s a better user experience, and it’s good for developers, because not only are their applications easier to find, but it means regular users are downloading more applications, and there are thus more potential users for their applications than there would be otherwise. When everyone from a small child to the elderly can easily find and purchase new applications, and enjoy doing it, there’s a big market that’s opened up that never existed before. And that’s only possible to that extent because of exclusive distribution on the App Store.

There’s also good reason not to get rid of free applications on the store. Free applications act very similarly to loss-leaders in retail—they’re what get people through the doors, but quite often they end up buying other, higher margin products.

It works the same way on the App Store; users know it is full of really good, free applications, and after downloading a few, seeing how easy it is, and how much they enjoy them, at some point purchasing applications becomes a no-brainer, too. 99¢? Fine. That’s powerful: people that wouldn’t consider purchasing applications before are drawn in by free applications, and through that experience are much more likely to purchase them, too.

Neither of these effects would exist if the App Store was not the exclusive point for distribution and free applications were not allowed. Perhaps the App Store could become decently profitable for Apple, but it would be, I think, at the expense of the platform and developers.