With 211% Revenue Growth In 2013, Freemium Apps Consistently Surpassing Every Other App Monetisation Models [REPORT]

Must Read

Can CBD Gummies Be Beneficial For College Students?

College students often feel more pressure than they have ever—or will ever—feel in their entire lives. Many...

Will Google’s Move To Delete 2,500 YouTube Channels Add Fuel To The Fire With China?

The US-China trade war has started rearing its ugly head. Both sides are now turning to extreme...

India Enterprise IT Spending To Reach Rs. 1,910 Billion In 2012: Manufacturing And communication Industry To Drive The Growth

Manufacturing and Communication Industry is expected to drive the overall growth in the years to come. Sectors like Education,...

Apple Inc. (NASDAQ:AAPL) changed the world of smartphones about 7 years ago with the launch of iPhone and then with a highly successful App Store platform. Mobile Apps have since consistently outpaced mobile and PC browser based ads in terms of revenue growth. Mobile revenue is growing at the rate of 73% compared to PC advertising. Understanding the importance of apps and monetization opportunities surrounding it, every smartphone platform had their own version of App Stores up and running.

Worldwide Online Advertisement & Mobile App Revenue 2012 vs 2013

Back then, there were only two kinds of apps; paid or free. Soon, in-app advertisement supported apps and games made their entry in to the app stores. But now, freemium apps and games have overtaken every other kind of app in terms of volume as well as revenue share.

Freemium Apps Have Become Developers’ Favourite Monetization Strategy

A recent report, titled Mobile AppAdvertising and Monetization Trends 2012 – 2017, from AppAnnie and IDC took top 1000 apps from Apple App Store and Google Inc. (NASDAQ:GOOGL) Play Store into consideration revealing some staggering facts. According to the report, 83% of those apps have adopted the freemium monetization model as the revenue source. Moreover, freemium apps generate over 92% of the total app revenue. On the other hand, paid apps have experienced 29% decline in app revenue in 2013 when compared to the previous year.

Advertisements

Mobile App Revenue Growth 2012 vs 2013

Wondering what ‘freemium’ apps are? These are the apps/games which are free to download and use. But there is a catch. Some of the functionalities are locked down which can be accessed only after a user pays for them. Functionality lock down can be of various types. Apps like WhatsApp and Solid Explorer are free to use for a limited amount of time only. It’s not only about functionality lockdown though. Certain apps like SoundHound have in-game advertisements which can be slightly irritating at times to the users reducing the overall user experience. These ads can be removed by paying a certain amount of money. Other apps like LINE and Viber provide a bunch of extra goodies and add-on contents with in-app payments.

Over 50% of the freemium apps use functionality lock down to force the user to pay. Freemium games are extremely popular where users get extra powers or new levels can be unlocked only after paying. Popular freemium apps can make over $100K per month through in-app advertisements. Developer of instant hit game Flappy Bird made over $50K every day.

Key Apps & Games Enjoyed Increased Success By Switching To Freemium Strategy

App Revenue Composition 2013

Freemium monetization model became so popular that a lot of paid apps/games pivoted to the freemium model in the past couple of years. WhatsApp, which was a paid app when it was released for the iPhone, turned to freemium model when it was released for Android devices. WhatsApp grew by leaps and bounds after adopting the freemium monetization strategy, so much so that WhatsApp messages sent everyday surpassed the total number of SMS sent and received throughout the world everyday. Even though the popular gaming title FIFA 13 was the best-selling paid app of 2013, EA (NASDAQ:EA) still decided to move to freemium model when they released the FIFA 14 which achieved even larger success. The reason why freemium apps are such a huge success is that it provides developers with a much wider range of audience. The users who like the service would pay for functionalities while the other users might pay in the long run.

By 2017, India Will Experience Highest App Revenue Growth Driven By Freemium Apps

Proportion Of App-Related Revenue Contributed By In-App Advertising By 2017

Selecting the best monetisation model is of utmost importance as the general user behaviour changes across regions. While 68% Indian users like to use free apps with in-app advertising, nearly 77% of users in Russia lean towards in-app purchases. According to IDC, in-app advertising will be the most successful way of app monetisation growing nearly 3.8x by 2017. US will stay as the top source of revenue for mobile apps but with 90% of freemium apps, India will surpass everyone in terms of revenue growth by 2017.

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Advertisements

Latest News

OYO Introduces New Initiatives to Increase Employee Satisfaction

With work from home having become the new norm for most Indian startups due to mandatory social...

Amid Acquisition Talks, TikTok Gearing Up For A Legal Battle!

Desperate times call for extreme measures. The popular short-form video app TikTok has been facing unprecedented amounts of backlash from Uncle Sam...

PAN-Aadhaar link: 32.71 Crore Indians Can Now Reap the Benefits

The agenda to link every citizen's Aadhaar card with their PAN card has been on the Indian Government's radar ever since 2017....

When A City Had To Pay Ransom To Cyber Criminals!

While the rapid advancement in technology surely did gift us with newer and more powerful devices, be it smartphones or iPads, it...

Can Twitter’s New Feature Really Make You Feel Safe?

Twitter has been on what seems like a campaign to make the site a place for more meaningful conversations among users. Ever...

TikTok Acquisition: Not A Cake Walk for Microsoft

After President Trump announced an order banning US companies' transactions with Chinese businesses, which is set to come into effect 45 days...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This