Freemium App Model is Preferred Method for Devs to Monetize

March 29, 2014 - Written By Jeremiah Nelson

You can make money from apps a lot of different ways. According to a App Annie and IDC, the route most developers are taking is the freemium model. Revenue from freemium mobile apps was up 211 percent last year, so it seems that users prefer this model, too. We’ve heard that the free app model doesn’t make any money for developers, but that’s obviously not the case.

If you’re not familiar with the term, a freemium app is one that is initially free to download and use. The developer will then make additional functionality unlockable via purchase. This could be in the shape of any type of in-app purchase like buying upgrades or content. It also comes in the form of paying to get rid of ads. Some developers allow their ads to be more annoying than others, but we can all agree that fewer ads are better than more ads. Levels and new characters can be unlocked, too, and all of this adds up to revenue for app makers. Most developers prefer making additional content available for paying users. According to the App Annie report, more than 50 percent of the developers polled stated this was what they liked to do.

The study also states that 83 percent of the top apps in the Google Play Store choose to monetize using some kind of a freemium model. In fact, 92 percent of all the revenue generated by the top apps in the Play Store comes from freemium purchases. This far and away beats out the paid-only and ad-only versions of apps. It’s not easy to make a lot of money, though. Right at 80 percent of the developers polled said that less than 5 percent of users made any in-app purchase at all. The poll encompassed 2,000 game developers from both the Android and iOS sides of the fence.

The United States is the leader in app-generated revenue, but other countries are growing more quickly. The U.S. grew by 1.7 year-over-year from 2012. Japan and South Korea grew at a somewhat higher 2.2 and 2.3 times the previous year, respectively. India had low overall revenues but grew more than 3 times faster than developers had in the previous year. India and Southeast Asia are going to explode with growth and financial opportunity in the next 18-24 months.

There’s a lot more data that you can find at the App Annie  link below, if you’re interested.If you would like to get your application reviewed by Android Headlines app review service please follow the link to learn more.