Image by Cristiano Betta
Introduction
How much should you price your mobile app? Setting the price for your mobile app depends on what you intend your mobile app to do for you. If your mobile app’s purpose is to be an extension of your website for mobile phones, generate ad revenue, or promote your brand in general, then obviously you want your app to be free to ensure the most downloads. However, if your app is a utility, productivity, game, entertainment, news, or other type of app which provides more value to the person downloading than to you, then you probably want to charge for it. The question is, when do you want to offer your app for free?
When to Offer Your App for Free
We already touched on the fact that if your app’s main purpose is to be an extension of your website or to promote your brand in general that it should be free. For instance, Facebook, Twitter, Netflix, Hulu, Yelp, StumbleUpon, MovieFone, etc. all offer free apps. Why? Because they want their users to be able to use their service and/or participate from their mobile device. In the case of Netflix and Hulu, offering the mobile app adds value for their paid subscribers. The other mobile apps are getting increased user participation for the service–which is important to advertisers–by offering their mobile app for free.
One of the main methods for generating revenue through your mobile app is to include ads. If you plan to have ads, your app should be free–I have yet to run into a paid app which has ads. Moreover, apps like Angry Birds have been able to generate word of mouth and pop culture relevance, in addition to ad revenue, by offering a Free version of their mobile app. Angry Birds was even mentioned in an episode of 30 Rock this season. No matter what you decide to price your app, getting positive reviews and generating positive word of mouth must be your main goal if you are looking to have your mobile app be a serious source of revenue.
Having said all this, there are four basic reasons why you would want to offer your mobile app for free: (1) you figure you can charge for your mobile app after people try it out, word spreads, and it accumulates good reviews; (2) you are offering the mobile app for free, but you will be charging for content (comic book apps charge for issues, games charge for extra levels, etc.); (3) you think enough people will download your app that ads alone will generate you enough revenue to justify the creation of your mobile app; or (4) similar to the first reason, you figure you can charge for your mobile app after people try it out and like it, but are annoyed by the ads and want an ad free version.
I mentioned Netflix and Hulu offering mobile apps for their subscribers and I want to go into that a bit further. Requiring a subscription for the use of your mobile app can be the best method of generating revenue through your mobile app. This strategy mainly pertains to mobile apps that are providing valuable fresh content on a regular basis. More and more news services have begun charging users subscriptions to access their content. In addition to having the store within your mobile app sell past issues, extra game levels, etc., consider charging users a monthly fee to access or use your mobile app.
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