Free vs. Paid Apps: A Monetization Summary
The mobile app market generates ...
The mobile app market is estimated to generate more than $77 billion in revenue annually. But the distribution of that massive (and growing) money pie is extremely lopsided. A small percentage of developers and mobile app companies earn the majority of mobile revenue, while most developers struggle just to break even and cover server costs.
Indie developers, startups and enterprises alike need to have a clear understanding of app monetization strategy, one of the most important aspects of mobile app marketing, in order to reach their financial goals. With various methods of app monetization available, choosing the right approach is one of the most difficult – and vitally important – decisions a developer or company will make.
It can be a tennis-match-type conversation, a back-and-forth pull between competing factors.
1. By when do you need the app to generate revenue/be profitable?
2. How much money do you need to make? What costs do you need to cover?
3. Which marketplace is more profitable for free vs. paid apps, Google Play or the App Store?
4. If I decide to use in-app advertising, will users actually click on them?
5. Do users think my app delivers enough value to pay for it up-front?
6. If I go with a free app, what are the different monetization models?
These are just some of the internal – and external – monetization questions that app developers must contemplate. Every company will come to their own conclusion based on their unique circumstances. But to provide information and resources to help make the decision, we’re kicking off a Mobile Monetization series (#monetizemobile) to cover various aspects of the conversation. Upcoming posts will cover:
1. The pros and cons of free vs. paid apps
2. 5 questions you should ask yourself before selecting a monetization model
3. Picking a price for paid apps
4. The differences between free and paid apps in the App Store vs. Google Play
5. 4 ways to make money from free apps (the freemium model)
Your method of monetization will be a huge key to your app’s success. Next Monday we’ll be discussing the pros and cons of free vs. paid apps.
Have questions about making money with your app? Want to discuss an idea with our experts?