Jeremy over at Tapity had a great post yesterday talking about the very same topic I blogged about; paid apps. Tapity makes much of its living on paid applications like Languages, Grades and Hours and they face the reality.

Yep, paid apps are dead ? Tapity.

By piecing together a few anecdotes I have heard, the top ten best-selling apps are selling roughly 25% as many copies as they did a year ago. If a #5 app sold 16,000 copies a day a year ago, #5 might only sell 4000 copies a day today. Now, that may still sound like a lot but apps are lucky to be #5 for a few days before dropping back into the abyss of obscurity. I?m not saying those statistics are by any means exact or even accurate but this is the kind of scale we are talking about. It is pretty drastic.

The volume just isn?t there anymore for paid apps. Premium apps that can sell for $5-$20 can probably continue to do well but the days of hit-based $0.99 apps are very much over.

His possible solution:

My thinking has changed quite a bit over the past few months and here is what I have come up with: we need to stop making apps and start making businesses.

Turning an app into a business? He explains it exactly as I have been telling those that will listen:

Hours is a perfect example. The old thinking goes like this: sell Hours for a few bucks, try to have a big launch. Rinse and repeat for updates. Since we?ve learned some things about launching great apps, we can probably do fairly well with this model and make, say, $100k.

That would be considered a successful app. But $100k isn?t enough to support a business like Tapity. It?s not nearly enough.

But what if we think bigger? Yes, release the app and sell a lot of copies but don?t stop there. Use that to prove to big companies that Hours is the absolute best time-tracker out there, hook into the back-ends that those companies use, and sell it to them at the corporate level for big bucks. Build some web and Mac integration. Maybe even hire a small salesforce. Make it a company.

Yes, yes and yes again?thinking out of the app box that has become warm and comfortable to making our apps into a real business with the actual app just being an integral part of it.

Jeremy, how about a nice SaaS app to collect all those entries from Hours for companies to use? ?You can charge monthly, nice recurring revenue instead of that terrible one-time app charge. ?And just think, you’re adding a ton of value.