How to be Top Grossing on iTunes app store developing Freemium app?

In my last post I raised an open question about what indie devs and small studios should consider to invent their own cash flow. And I didn’t wait for people to turn up to me.

This post, in turn, churned out quite some revenue models that I could think of. There are free iTunes app store apps who show incongruous ads. They are the easiest to make & market, but market is full of them. You need crazy marketing to get the figures running.

Then there are paid apps who asks for user’s money upfront. While this is the best & most direct way of validating your own quality as a developer, so many factors hinder indie devs and small studios. With so many apps out there, it’s quite hard to make a quality product spottable, simply based on keyword optimization. You need to be the leader in the niche you are developing for, or you are out. The verdict? Build a Blood Pressure Monitor and have everyone’s $9.99. (Maybe, get sued tomorrow for not building something medically correct.)

And then I found the middle way – to offer something for free, and as a validation of my own unique, graceful, verified work – the user will pay me to have something extra / something forever. And I found none other than the most exploited one: The Freemium Model. Now that deserves some explanation.

How Freemium Works:

  • Offer your GOODIES to them for FREE (free iTunes app store apps)
  • Show them they are indeed GOODIES
  • Show them they can have MORE OF THOSE GOODIES / SAME GOODIES FOR MORE TIME / SAME GOODIES MORE QUICKLY – if they pay (in app purchase items)

It is not hard to see why it works – every iOS developer is either a game developer / app developer / someone writing a niche software – but is ultimately a smart shopper, and she understands very well that no one can resist the instinct of FREE STUFF.

Why Freemium is Bad?

NOW – What’s going on now? Why have I started detailing about In-app purchases suddenly? Why it’s relevant today more than ever, and what makes me write this tutorial despite the fact that it’s around since almost 8 years.

A major portion of indie community are becoming Proponents of Paid apps (the ones without In-app purchases), and more importantly, Opponents of Freemium Apps. and results are being seen at Apple too. And by no means this is a reason to dump Freemium – it’s more the reason to embrace it.

Reason? It works. And if something works, an indie dev or a small studio should not restrict themselves from setting their foothold in the app market. Freemium makes users crippled, it makes them addicted to gameplay up to a certain degree. It has potential to make hapless minors it’s victims.

Why Freemium (aka virtually free iTunes store apps)  Works:

Source: Distimo report shown on Techcrunch - Freemium takes it all

Source: Distimo report shown on Techcrunch – Freemium takes it all

But then, exploitative practices exist with credit cards too – it doesn’t obliterate its advantages from millions of people whose life is made easier. With all due respect to makers of Paid Games who love to ask it up-front, freemium model brings Store to the user – which effectively skips a step and making user’s life easier. Remember the days of Angry Bird FREE & Angry Bird? Instead of buying Complete Version from a Lite Version that will force you to launch it twice (not to mention the cursory visit to the store in-between), and maybe play same levels again – Freemium makes your life easier by availing the goodies right in front of you – all the while you are immersed in your awesome app / game experience.

User achieves what she expects the most from – instant sense of accomplishment.

Off course, exploitative practices exist everywhere, but that doesn’t mean the the model is flawed. The model is completely in line with 30-Day No Questions Asked Money Back Policy – something which is an organic stamp of user’s satisfaction. You can build walls to protect exploitative measures – like Apple did by introducing whole new category of kids apps.

No matter what they say, Freemium (read in-app purchases) are the best monetization technique ever. It’s the only window of opportunity for small guys in the garage to grow big, and inspire millions (well, let’s say thousands) like them to follow the course.

Why would you not embrace Freemium?

And yet, some reluctant indie devs who are just taking baby steps into iPhone apps & games world shy away from freemium. It’s not those opposing voices that I mentioned above. It’s something really basic – the fear. The fear of a baby stepping into A Dark Room. And while it’s not complex, it’s not a cakewalk either. The challenges range from what to sell as an additional content to how to price it right, and ultimately, how to implement it, troubleshoot it, get it approved (out of the hellhole..). As a result, being a beginner, they tread the way more traveled, go for the simplistic free vs paid approach, derive satisfaction to have something out under their name plate.

What are my biggest fears about free iTunes app Store apps?

So while there is so much noise coming from moral school of thought – only the Paid Apps and Games are Holy – there is an inherent inertia among fresh iOS developers. The natural temptation is to offer free app store apps to millions of mobile users.  And offering paid content as freemium. Fighting this temptation is this inertia – the fear of technical complexity. Complexity of integrating In-app purchases that can drive your release date out of the calendar year.

The fear of putting off something that you really want to accomplish / publish is the biggest fear any creative professional struggles with. I went through this fear.

I faced it when I developed my first ever iOS app – a free iTunes app store app – it took me nearly a month to integrate In-app purchase, but I knew I had to do it. I didn’t know I would write an article on it some day, but I knew that fear, and I wanted to overcome it. I learned it from the great iOS Dev Troy Brant – and I still credit some of my understandings about IAP to his great blog. At the same time, I wished some of the parts understood in another manner – taking better aerial view of things before diving inside. It’s really something about how your brain wants to grasp things. But I can now put pieces together better.

I learned the ropes the harder way, and now I believe it paid. (well, not yet, but I am sure it would :-)). Here is an awesome video summary of what I came up with, on amazing price, in case you have already overcome my fears.

If not, something should go out as giving back. In my forthcoming & concluding blog, I will try to fight my fear inside every indie dev who is fighting against in-app purchases.

Well, not exactly against in-app purchases, but for the freemium model. Never mind pays like hell (the image says it all).

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