So how much money can you earn with an app? Let’s start with some interesting figures. Business Insider predicts that global app revenue will increase by 18% between 2017 and 2020. We’re looking at an app economy that is worth $6.3 billion by 2022.
We use mobile applications every day for very different reasons - to stay in contact with friends, order food, listen to music, shop online, search and navigate the web. If there is a task in people’s life you can be sure that there is an app to make doing this task easier and more enjoyable.
The constant usage of mobile apps attracts a lot of companies looking to make a profit from our attachments to mobile devices. On average US citizens reported being using apps for 3 hours 35 min per day, which shows great potential for the market that keeps growing every year.
I know what you’re thinking. Why aren’t you getting rich yet?
The truth is not all apps are profitable, and the success of your app is dependent on many factors from product design to marketing to even the market itself. Apps that have no place in people’s lives are an automatic flop.
How much money can you make?
In order to give a concrete answer to the question, let’s consider the two primary app platforms.
Over 25% of application developers on the Apple store generate over $5,000 a month. For Android, the number is around 17%.
It’s worth noting that gaming apps do the best, by far. Thanks to monetization strategies like in-app purchases. Bandai Namco Entertainment’s Dragon Ball Z Dokkan Battle makes an estimated $2 million per day in revenue.
So in short, you can make quite a bit of money.
App Monetization Methods
It is important to choose the right way of monetization to provide a balanced revenue stream without impairing user experience. A combination of several methods is a good way to ensure that you don’t overload users with a certain monetization method, driving them away from using your application.
First and the most obvious revenue stream for applications are mobile ads that are either placed as banners on the active screen or pop-up when a certain action happens. If we take a gaming app as an example, you may be seeing an obligatory 10-second ad every time you lose. Mobile ad networks connect advertisers with app owners and provide a wide selection of topics and forms of advertisement.
While ads can be very annoying, some apps offer users to pay a small one-time or monthly fee to remove them. The fee is usually too small for the user to care and ad-free space greatly improves user experience.
A more native method of generating revenue from an app is in-app purchases. Basically, these are paid add-ons that take using the app to the next level. It is great paired with freemium strategy when users are offered a basic version of the application for free so that they get a taste of what is in it.
After they grow to like the app there is an option to purchase additional items or a premium version of the product. In the gaming apps, these could be extra lives or items, in a music app, it could be a background player, in a food delivery app it could be an extra fast delivery - the possibilities are limitless.
When joining an affiliate program you get paid every time you refer users to other businesses. The payout depends on the payment model you choose and the action that users have to perform - make a purchase, download app, pass a few first levels in the game, etc.
As mentioned above, some businesses choose to offer the basic version of their application for free to attract more users. Unlike in-app purchases that can be limited to buying separate items and continuing using the rest of the application for free, premium subscription requires the purchase of access to the app on a weekly, monthly or yearly basis. It is safe to say that the apps offer premium subscription usually match the quality of the features with the price.
Outside of Mobile
Apps have found their way into other ecosystems such as Smart TVs and video game consoles.
Take Netflix for example, their app is almost ubiquitous. Being a subscription service they are able to generate billions of dollars by integrating with devices other than smartphones.
In the end, your idea and its usefulness will be the ultimate judge of success. Making the next chart-topping app is not an easy feat. As the app store gets oversaturated, it can be difficult to compete effectively in existing categories.