Monetizing Apps — What is Working?

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Kevin Ford

April 8th, 2013

Distimo released a report analyzing the all-time revenues and downloads of 250 top grossing apps in February, 2013 apps released since January 2012), which shows the most lucrative models for monetizing apps.

Monetizing-Apps-Distimo

Here are the major findings (as provided by Distimo):

♦ In-app purchases generated a record 76% of all revenue in the Apple App Store for iPhone in the U.S. in February 2013 (up from 53% in January 2012). At least 90% of all revenue was generated by in-app purchases in the Asian markets, which include Hong Kong, Japan, China and South Korea.  Broken down by business model:  71% IAP Revenue from Free Apps, 24% from Paid and 5% IAP from Paid Apps.

♦ Among the top ten apps for February 2013, which were released since January 2012 in the U.S. for iPhone, the ARPD ranges from $0.37 (What’s the Word?) to $7.04 (Rage of Bahamut).

♦ Of the three various business models, freemium apps generate the least amount of revenue per download with an average of $0.93 when looking at the top 250 apps in the Apple App Store in the U.S. Ninety-two freemium apps generated less than $0.99, which is the lowest price point for paid apps. [Side note:  Due to the demand for freemium apps the number of downloads is greatly increased offsetting the lower revenue per download.]

♦ The average revenue per download (ARPD) of the top 250 apps released since January 2012 is $0.99 in the U.S. This number is significantly higher in Japan, where the average user spends more on apps, and the ARPD of the top 250 apps released since January 2012 is $3.12.

♦ Paid apps without in-app purchases generate $2.25 in the Apple App Store for iPhone in the U.S. Paid apps with in-app purchases generate even more per download, indicating that users are not put off by the fact that they also have to pay for additional features within the app, in addition to the one-off fee they initially paid for their app.

♦ The average revenue per download for paid apps is higher on iPad than on iPhone in the Apple App Store in the U.S.: $4.04 versus $2.25, respectively.

♦ The average iPad download generates more revenue with in-app purchases than on iPhone. Freemium apps have an ARPD of $2.26 on iPad versus $0.93 on iPhone.

Kevin Ford

Marketing Manager

2013-04-08

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