Let's take a look at the most common monetization models currently in use.
Freemium model
The freemium model is that the app is free to download, but certain features or services are only available to users who purchase the premium version. This model is popular for apps that want to attract as many users as possible and then convert some of them into paying customers.
An example of such an app is Spotify, which you can use for free with advertising, or pay to listen without ads and restrictions. The freemium model is one of the most widely used today and is suitable for a very wide range of mobile apps.
Subscription
With a subscription model, users pay a recurring fee (for example, monthly, semi-annually or annually) for access to the app or some of its features. This model is often used for apps that provide regular content or services that have high added value.
An example would be Netflix. You subscribe to the service and have access to constantly updated content. The disadvantage of this model, compared to freemium, can be slower growth of the customer base. The user has to pay for the service before they can use it. Often, however, the user is offered some sort of trial period during which the app is free. This way the user base can grow better. The advantage of this model is predictable financial planning and the fact that the user is more likely to use the service.
In-app purchases
This model is similar to the freemium model, but instead of paying for the premium version of the app, users can purchase specific features, content or virtual goods directly within the app. You simply use the app and pay extra for premium features. This is a very popular payment model that was originally only used for games where you could pay for a special feature, character or avatar change.
Typical apps that use this model today are dating sites. The basic profile is free, but through paying extra you can get better positions or have a larger selection of more attractive profiles.
In-app advertising
In this case, users are shown ads for which mobile app owners collect money. This model is ideal for apps with very high traffic.
This is the principle on which most media work today, but also search engines and social networks such as Facebook, etc. In recent years, it has become standard to pay in the app to turn off advertising. In this way, operators try to accommodate users who do not want to see ads and at the same time diversify their revenue sources.
Combination of different models
Many successful apps combine several monetization models at once. For example, they may offer a freemium model with a subscription option while also including in-app purchases and ads. In this way, they maximize their revenue potential and diversify the risks associated with relying on advertisers.
Crowdfunding and donations
Some apps rely on crowdfunding or voluntary contributions from users. This model is less common but can be successful for specific types of apps or communities.
Blockchain and cryptocurrencies
With the rise in popularity of cryptocurrencies, some applications are starting to move towards models that incorporate blockchain technology. These apps can allow users to make microtransactions or earn cryptocurrency for using the app.
In conclusion, the way mobile apps make money depends on the type of app, the target audience and the business strategy of the developer. Most successful apps combine several different models to maximize their revenue and offer users a valuable experience.
Thinking about a business model in your own mobile app? We'd be happy to discuss it with you.
Freemium model
The freemium model is that the app is free to download, but certain features or services are only available to users who purchase the premium version. This model is popular for apps that want to attract as many users as possible and then convert some of them into paying customers.
An example of such an app is Spotify, which you can use for free with advertising, or pay to listen without ads and restrictions. The freemium model is one of the most widely used today and is suitable for a very wide range of mobile apps.
Subscription
With a subscription model, users pay a recurring fee (for example, monthly, semi-annually or annually) for access to the app or some of its features. This model is often used for apps that provide regular content or services that have high added value.
An example would be Netflix. You subscribe to the service and have access to constantly updated content. The disadvantage of this model, compared to freemium, can be slower growth of the customer base. The user has to pay for the service before they can use it. Often, however, the user is offered some sort of trial period during which the app is free. This way the user base can grow better. The advantage of this model is predictable financial planning and the fact that the user is more likely to use the service.
In-app purchases
This model is similar to the freemium model, but instead of paying for the premium version of the app, users can purchase specific features, content or virtual goods directly within the app. You simply use the app and pay extra for premium features. This is a very popular payment model that was originally only used for games where you could pay for a special feature, character or avatar change.
Typical apps that use this model today are dating sites. The basic profile is free, but through paying extra you can get better positions or have a larger selection of more attractive profiles.
In-app advertising
In this case, users are shown ads for which mobile app owners collect money. This model is ideal for apps with very high traffic.
This is the principle on which most media work today, but also search engines and social networks such as Facebook, etc. In recent years, it has become standard to pay in the app to turn off advertising. In this way, operators try to accommodate users who do not want to see ads and at the same time diversify their revenue sources.
Combination of different models
Many successful apps combine several monetization models at once. For example, they may offer a freemium model with a subscription option while also including in-app purchases and ads. In this way, they maximize their revenue potential and diversify the risks associated with relying on advertisers.
Crowdfunding and donations
Some apps rely on crowdfunding or voluntary contributions from users. This model is less common but can be successful for specific types of apps or communities.
Blockchain and cryptocurrencies
With the rise in popularity of cryptocurrencies, some applications are starting to move towards models that incorporate blockchain technology. These apps can allow users to make microtransactions or earn cryptocurrency for using the app.
In conclusion, the way mobile apps make money depends on the type of app, the target audience and the business strategy of the developer. Most successful apps combine several different models to maximize their revenue and offer users a valuable experience.
Thinking about a business model in your own mobile app? We'd be happy to discuss it with you.
