Which Can Be Best Mobile App Revenue Models?

With the app market booming, it has become necessary to tap this resource and generate revenue for any application developer. With the launch of new iOS and Android devices each year, and more than a million applications available for download over various platforms, this is another way of generating revenue.

What’s in Store?

Well, a plenty! It is predicted that the revenue generated from smartphone apps will reach $40 billion in the next three to five years. Application developers can monetize using paid apps, in-app freemiums, subscriptions and with virtual currency.

The 5 Models of Earning Revenue

Basically, there are five models of generating revenue from mobile applications that include paid applications, separate app and in-app freemiums, advertisements, subscriptions and virtual currency. Any of these techniques can be employed to make money. However, the developer’s approach has to be according to the kind of application. It is essential for the developer to woo the user to spend money on the various aspects of the application. Here is a detailed account on app revenue models and how they can help developers earn money.

Best Mobile App Revenue Models

  • Paid Apps: This doesn’t seem to be a great idea unless you are very confident of getting a huge traffic. The idea of a paid application makes sense only when the app is from an amazing and popular brand or is exclusive and faces no threat from competitors. With cut throat competition in the segment, this is most risky way of earning revenue. However, if you are confident of getting a large number of downloads, this model should be your first preference.
  • In-app Purchase: This model works best with freemium apps. You provide basic app and if your users want to have extra features or content, they can buy in-app items as per their need. It may lead to better user satisfaction.
  • Virtual Currency: Addictive games like temple run, real football, and many more allow users to buy coins, unlock new levels or purchase goodies directly from the in-app store or market place. This concept is known as virtual currency and is said to be the most profitable app revenue model till date. However, a great deal of commitment and money goes into creating a great game that is capable of luring smartphone users.

Revenue Models for Mobile Apps

  • Advertisement Based Model: This app revenue has its share of pros and cons. While companies can generate a great amount of revenue by promoting brands in their application, it restricts the resources of the app developer. In-app ads can get really annoying especially when they hamper the loading speed of the application. In addition, not many developers would like to sacrifice the screen space particularly in case of apps made for smaller screens. On the other hand, a developer cannot control the content shown in the ad, which can bother many a user.
  • Subscriptions: Although this might sound appealing to application developers, this app revenue model did not find acceptance from most users. Creating and managing subscriptions is a tiring process and needs a lot more effort from both the user as well as the developer. Nevertheless, this is still a good way to making money when it comes to magazines and video content. Magazine and video content subscriptions have proven to be cost effective and have grown by leaps and bounds in the recent years.

Now, it is up to the application developer to decide which model works best for him. Of course, this will largely depend on the type of application and the kind of audience it is targeted at.


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