App development is bigger business than ever in 2015, but the key to App Store success is in the pricing…
Many developers choose to cut their teeth with mobile Apps because of its relative ease compared to a fully-fledged desktop suite. Another factor, however, is the massive amount of money to be made when that App Store perfect storm hits and your IP goes viral beyond your wildest dreams. Apple announced that in 2014 they paid out an incredibly $10 billion to developers in 2014, and have paid a total of $25 billion since their App Store’s launch in 2008; and that’s just one platform. The main ingredient that separates one app from another (and not all are created equal), aside from their function, is the pricing – and it can be a kiss of death to go down the wrong avenue when it comes to taking your app to market. Different apps can flourish using different tactics, and it’s this secret-sauce decision that we’re going to guide you through here.
The Four Modes Of Payment
Within each platform’s App Store, there are four main ways of approaching getting paid for your product. To say one has held more success than the other would be to wildly mislead you, as each has brought with it both success and bottom-of-the-search-rankings obscurity. The key point to focus on is where does your money come from, is it the users or external revenue? Taste and preference will help you draw your line in the sand, but a rundown of your choices never hurts.
Should your app be free?
Should your app be free?

1. App Store Purchase
A one off purchase that straight away casts that premium glaze over your app, it brings with it mystique that just begs a curiosity purchase. By and large, App Store customers of all creeds are reluctant to open their wallets for apps, however a recent study shows that Android users are even more so. The findings are admittedly flimsy due to the Google Play Store being the only android App Store put under the microscope.
2. Freemium
This is a model based upon an initially free to purchase app being limited in its feature set until a paywall has been broken. Once users become a fan of the base content they’re much more likely to pay for additional content. Although it’s a much more guaranteed way of seeing revenue, said revenue will take longer to get to you through its very nature.
3. Ad Supported
Now this can be the sole market strategy for your app, or an addendum to any one of the other methods discussed here. If Emarketer’s still recent projections continue to ring true, then it will ever more be a sure fire way of drawing revenue from your developments (with projections taking mobile ad spending to $94 billion by 2018). Ads, when implemented tastefully can build affinity with other desirable brands – or they can strip it off all class. If your app is meant to fly the flag for a brand or business with specific values, approach with caution.
4. Subscription
Apps such as Spotify have managed to marginalise the entire music industry and make its catalogue a feature of the app. This is all down to the success that can be had when providing your audience with something of true value and pricing it accordingly. Supply-In-Demand is a big counterpoint to this, if your app offers a feature set similar to that of other successful apps and you’re without a USP then this should be considered a warning sign rather than an invitation to compete.
Promotion vs. Product vs. Service
Ultimately, your choice of strategy when monetising should be stripped down to categorising your app. If your app is a promotional tool for a business or band, then there is a lot to be said for absorbing the development costs in to your marketing budget; and filling your promotional tools with ads that are essentially other brands’ promotional tools could bring about app-ception.
Categorising your app as a product or a service can lead you either way; if your app is a tangible product then paid for app store downloads could lead you to immeasurable success. Although shoppers are keen to investigate free apps; when word gets round that your product is of true value, the sky’s the limit. Pixelmator are a true success story: 500,000 downloads/updates in a single week despite being at a premium price point. If your app offers a service, rather than a stand-alone functional product – then, again, quality can lead your decision here. A second tier app can have success by being ad-supported, whilst offering a free subscription model; however if the quality speaks for itself then it’s worth mentioning again that consumers truly do get behind an app that stands head and shoulders above the rest in both value of service, as well as quality of product.
There’s no one-size-fits-all model for app downloads, but consider the minefield of app pricing somewhat cleared for you after reading this article.
Pixelmator
Pixelmator
