In our last blog post we looked at the question: Do educators expect all apps to be free? Luckily, we discovered that educators value software that helps them individualize instruction and that engages their students. Whew!
But we also know that education pricing has to be affordable for schools, especially as our schools face continued budget cuts. So how does iTunes discount for education play into the equation? Are educators aware of the 50% discount, and do they use it when purchasing apps?
First, let’s look at why this important to education companies. To build an education app that is engaging and pedagogically sound, that individualizes instruction, and that is an overall rock star in the software space is expensive. Sometimes, it is really expensive.
Just to make the math easy, let’s say an education company invests 100K creating a software app. If it prices that app at $2.99 and a school uses Education Volume Purchasing through iTunes, the educator gets a well deserved 50% discount and pays $1.50. Apple, of course, gets a 30% cut, which means the developer makes about a buck from each app sold. Just to break even, a company has to then sell a hundred thousand copies of the app.
Whether or not educators use Education Volume Purchasing through iTunes has a big impact on pricing strategy.
In the 2012 National Survey on Mobile Technology, IESD Inc.–an independent research firm in New York–asked district-level educators, “Does your district use Education Volume Purchasing through iTunes?” Educators could choose from:
Never heard of it
Don’t purchase Apple apps
Surprisingly, 31.8% of respondents (whose titles included CIO, CTO, and district instructional technology director) are aware of the discount but still responded “No”.(A detailed breakdown of responses to each choice is available in the Business Edition of the report from IESD.)