"Monetizing Apps: Lessons from Photo App Developers" by Hans Hartman, President, Suite 48 Analytics
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Transcript of "Monetizing Apps: Lessons from Photo App Developers" by Hans Hartman, President, Suite 48 Analytics
Monetizing apps – lessons from photo app developers Hans Hartman President Suite 48 Analytics Chair Mobile Photo Connect November 13, 2013 Suite48Analytics
Sources � Monetization interviews for RPI ◦ Photo app developers use diverse
monetization models; open to experiment
� Monetization panel at Mobile Photo Connect conference ◦ Scalability determines monetization options
� Photo/Video Apps Market Analysis ◦ With category maturing, successful apps
adopt higher prices and in-app purchasing
� Ad hoc discussions with developers
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Monetization options popular among photo app developers � Charge for app
� In-app purchasing (IAP)
� Advertisements
� Selling third party products
� Pay-out later: at exit
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Charge for app – trend � Trend: more top selling photo/
video apps charge higher prices
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0%
5%
10%
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20%
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30%
35%
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45%
Pricing over time
$0.99
$1.00-1.99
>$1.99
Suite 48 Analytics Photo/Video Apps Market Analysis, November 2013
Charge for app – considerations � How high are your user acquisition
costs? � How viral is your paid version vs. a
free alternative? � How high are your support costs? � Is a free super lite version with IAP
an alternative (de facto trial version)? � Can revenues from paid apps scale
enough? 5 Suite48Analytics
In-app purchasing – trend � Trend: IAP is still growing among
top selling photo/video apps
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IAP on iOS over time
0%
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iPhone free (n= 50)
iPhone paid (n= 50)
Android free (n= 50)
Android paid (n= 50)
IAP by OS/payment
Suite 48 Analytics Photo/Video Apps Market Analysis, November 2013
Suite 48 Analytics Photo/Video Apps Market Analysis, November 2013
In-app purchasing – considerations � IAP was the buzz 6-12 months ago,
inspired by the games world � IAP is only scalable per user if many
options, often refreshed inventory � IAP poses tradeoff challenges:
“in your face” vs. user-friendly
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Advertising � Methods: ◦ Generic ads – low revenues, often not
relevant to user ◦ Targeted ads – leverage user data (content
categories, geo data, hashtags, etc.) ◦ UCG-integrated “ads” – promotions,
contests, brand mixed with UCG integration, sponsorships: today’s buzz
� Scale matters ◦ Ad networks vs. in-house sales ◦ UCG-integrated “ads” require large base
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Selling third party products � Products offered through APIs: ◦ Physical products, e.g. photo products ◦ Third party functionality, e.g. photo filters
� Considerations: ◦ How many different APIs can you
realistically support? ◦ What happens if you stop offering third
party products?
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Payout later – at exit � No monetization yet – build a viral,
loyal user base that has long term monetization potential and is attractive for acquirers or IPO
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Takeaways photo app market � Scalable user base – produces most
monetization options long term � Ads – the more scalable & targeted the
user base, the higher the revenues/user � IAP – hard to scale, safe interim solution � Paid – viable option up to a certain
scale; challenge is to devise “consumable” products or services
� Be clear about your revenue goals – they might limit your monetization options
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