Free or paid? It’s a question that has plagued Android developers almost since the platform has been introduced. For developers looking to make money off their apps, it seems like going the paid app route would be the best way to monetize your app: if it’s useful enough, people will be more than willing to pay a dollar or two to pick it up and use it. In reality, however, the choice between paid and free isn’t so cut and dry. In real life studies and examinations, it’s coming to light that advertisements on free apps can monetize perhaps as well or better than a paid app without ads.
The secret when it comes to monetization is that, quite simply, people seem to be reluctant to download apps that they have to pay up front for. Cambridge University has recently performed a study that found out that a price tag starts to seriously cut down on app downloads: they found out that 73% of apps in the Android marketplace are free, and they’re downloaded very often: 20% of them are downloaded more than 10000 times, and of those 73% of apps 80% of them rely on advertising as their main way of making revenue and monetizing the apps. On the flip side, however, paid apps seem to be in a much less rosy area. Of the remaining 27% of apps that are paid, only 20% of them are even downloaded more than 100 times, and only 0.2% of them are downloaded more than 10000 times. For a paid app developer, that seems like a rather dismal number, and from those statistics it seems fairly clear that advertising is the way to go for monetizing your apps.
Numbers, however, can be deceiving, and there are a few ways to monetize a paid app- including a hybrid model that combines both free and paid apps. The major problem of paid apps are the lack of incentive to download them. People don’t want to pay the upfront cost of the app because they’re often price sensitive- however, there are others who tend to want to pay the full price for apps that don’t have ads. Developers can often have two apps- ones that are ad-supported and ones that are paid, and with very little effort you can monetize both types of app users fairly easily. Sometimes you’ll even get crossover from the free apps- many users of free apps will get used to the features of the app and want to unlock the full features or remove the ads, and they’ll pay the price of the paid app to do so.
Monetizing your apps doesn’t always have to be a black and white decision based on the numbers- it can be something that you combine to maximize your monetization. If you just want to make a free app with advertisements, you’ll certainly be likely to fare better on the outset than someone who goes a paid only route. If you hybridize your app model, however, you can bring in the paid model to supplement the free model and maximize the profits you’ll get from your app development!
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