Creatur

How to make money from an App

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angry_birds_ios

Apps are no longer just games on smartphones; apps are now everywhere… on Windows 8, Mac, Tablets, Televisions and even watches soon (iOS and Android versions currently in development for expected release this year). So there’s no denying that Apps are going to be sticking with us for a while longer. With this huge amount of devices that now support apps, there’s also a massive audience of users to follow. This vast marketplace makes for a very attractive entrance for entrepreneurs and businesses that could potentially earn mega money with a successful idea. But having a good idea is only half of the puzzle, solving the problem of how to monetise it successfully needs careful consideration.

Paid

This is the most popular route for app developers as it requires minimal thought. You simply set the price for your app and hope that you generate enough sales to reap a profit. This is all well and good, but the latest research shows that the most popular apps today are the free ones. Striking big with a paid app is very difficult with a pond of ‘bigger fishes’ whom maybe offering a better app at no cost.

Freemium

Currently this payment model offers the greatest success. The user downloads a free app, which has some restrictions such as a limited number of levels or key features removed. The user becomes hooked on the app and wants the extra features so they pay for the ‘pro version’. One of the most popular apps currently using this business model is Candy Crush.

Whilst this model can be very successful, you are betting on the fact that the users will feel the need to upgrade to the pro version. Moreover, this model requires further development time in order to implement the different versions and is therefore more expensive to begin with.

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Chart from Statista: Freemium is the No.1 Pricing Strategy in Most App Categories

Free-to-play

As the title suggests, this model is where the users are able to download a free fully functional version of the app. However, the game will offer incentives such as components to make their car faster or a power pack to make their attacks more lethal which the user can download (and pay for) at their will. These added incentives are what the game developer will profit from.

The problem with this model is that although it generates a lot of downloads, it doesn’t always turn these into sales.

Banner Advertising

This is where a full version of the app is free, but you will be presented with banner adverts around the visual interface. This payment model is popular for apps where the user will be engaged for a long time, as they will therefore be presented with a greater amount of banner adverts.

Combining the different models

Many of the most popular apps on the marketplace today combine some of these different models in their approach to monetisation. Take for example Angry Birds; this game was served as a free version that had a limited number of levels and also regular advertising banners. The user was then frequently offered to purchase the full version, which was unrestricted and was advertising free. This Freemium + Paid model obviously worked very well for them and a number of other popular apps are also using this tactic.

Let us know in the comments below which payment model you would be most inclined to use your hard earned money on, we’d love to hear your feedback.