Product updates: Attracting new consumers versus alienating existing ones

Are product updates-in terms of producers' decision to add new features "over-the-air"-an effective means in stimulating greater product demand and appeal? Our difference-in-differences analyses of a matched sample of 17,247 mobile apps in Google Play over a period of 24 weeks documents mixed consumer reactions. Whereas updates attracted new consumers, existing consumers rated an app 1.1% worse than before the update and compared to a control group of not updated apps. Why did existing consumers react negatively to updates? Our data provides little support that economic reasoning-i.e., direct costs or learning costs imposed by the update-underlies these reactions. Instead, negative reactions appear-at least to a certain degree- as a behavioral phenomenon, as consumer reviews show an increased density of affective vocabulary after an update. We conclude that updates may stimulate new demand but may alienate existing consumers.