The Macintosh community site MacHeist offered a bundle of 10 Mac shareware apps last week for the bargain price of $49. Purchased separately, the total cost of all the apps would have been more than $350.
Consumers recognized the fact that the MacHeist bundle was an excellent deal, and the reaction was massive. MacHeist sold 16,821 bundles -- quite possibly the largest, most successful commercial distribution of Mac shareware ever -- and raked in an estimated $800,000.
But the promotion is causing some Mac bloggers to cry foul: MacHeist stands accused of ripping off the shareware programmers and making a massive profit for the promoters.
MacHeist is the brainchild of Phill Ryu, an 18-year-old entrepreneur who previously created and hosted My Dream App, and John Casasanta, developer of iClip, an application included in the bundle.
"We weren't expecting the kind of sales we ended up with," says Ryu. "We told the developers we were expecting somewhere around 5,000 sales."
When the six-week promotion closed at the end of last week, the final numbers put MacHeist sales at more than triple the initial forecast.
"John came to me with the idea of a bundle sale, something similar to macZot," says Ryu, referencing the popular shareware-distribution site. "We started brainstorming about how to make it more fun than just another Mac bundle sale."
The great public interest may have been fueled by MacHeist's promise to donate 25 percent of the profits to charities, including United Way and the World Wildlife Fund. But Ryu concedes that some of the sales may also have come about because of controversy surrounding the event.
How does a sales event that triples its expectations and donates an estimated $200,000 to charity become controversial? The promotion was wildly profitable for Ryu and his partners, but shafted the developers, who were paid relatively low fees for participating.
According to several sources, the shareware developers were paid a flat fee ranging from $5,000 to $15,000 for their shareware apps -- approximately $100,000 total -- leaving an estimated $400,000 to $500,000 for Ryu and his partners after costs.
Ryu declines to give exact figures or comment on the estimates, saying only that MacHeist offered customers discounts on volume purchases, which may skew the numbers.
John Gruber, a prominent blogger, criticizes the project on his site, Daring Fireball, in a post entitled, "The Iniquities of the Selfish."
"Respectable agents or managers take no more than a 15 percent cut of their clients' revenue, and usually not more than 10 percent," Gruber writes. "That's true in sports, it's true for authors and it's true for entertainers."
However, Ryu says that developer feedback has been positive, with nine of the 10 developers saying they are "very happy" with the bundled sale. The 10th developer, who did not want to be identified, said he was disappointed the project focused on the charities and the low price of the bundle rather than the quality of the shareware.
"I feel like (MacHeist) brought a lot of focus to Mac shareware," Ryu counters. "We had a lot of feedback from customers who said they had never even heard of shareware, let alone bought it."
Because sales wildly exceeded expectations, Ryu says MacHeist paid bonuses to all the developers.
"We've given pretty substantial bonuses, which work out to about double the money of the original agreements," he says.
"MacHeist made a killing," says Wil Shipley, creator of the MacHeist app Delicious Library. "The bundle was enormously successful, more than any of us had ever thought. I guess I could whine about this, but such is the nature of gambles -- they assumed more of the risk, and as such they got the bigger payoff when the jackpot hit. Plus, MacHeist actually decided to double what they are paying us developers after it hit so big."
"I don't care how much money the MacHeist guys make," writes Oliver Breidenbach, who licensed FotoMagico to MacHeist, in a blog post. "I care about how much my company makes and how the Heist brings us forward towards our goals."
If you missed out on the bundle, don't fret. Though he won't give a date, Ryu says MacHeist will offer another shareware bundle in 2007.