How much is the active user?
According to AppAnnie, almost all of the growth in application revenue over the past year was in-app purchases. But is it caused only by the fact that this business model has become very popular? Or is there a hyperconcentration of revenue from top publishers, who in the majority prefer the free-to-play model?
Probably both of these facts had their effect, but you should not forget that, along with in-apps, a fairly large revenue stream generates a subscription model.
If we exclude the developers of top applications (those who earn more than $ 50 thousand a month from an application and have more than 500 thousand active users), it turns out that attracting users and their subsequent retention was one of the most important aspects. Moreover, the average revenue per active user is rather static regardless of the monetization model.
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The graph shows the average revenue per active user by different monetization models. On the left, applications earning more than $ 50,000 are excluded. On the right, they are included, for clarity of the influence of this factor. This data is based only on those applications where analytics is embedded.
In this study, a Freemium application is meant to be limited to a free application, with a separate paid version advertised for free, or a free application with an upgrade through in-app.
In-app purchases - any virtual benefits, features or content acquired within the application. The application itself can be both paid and free.
It is worth noting that developers can use several monetization models at the same time (it happens quite often). For example, freemium application with advertising in the free version.
The average number of models used per developer in this study is 1.7. Therefore, if we take developers who use only one monetization model, in general, the picture remains almost unchanged.
For most developers, an active user costs about 4 cents per month.
If you do not have an excellent reputation or cooperation with some well-known brand that can attract a large number of paid downloads, it is best to avoid a situation where the user pays for the main function of the application.
Refusal of the paid model will lead to more downloads and significantly expand the user base.
With the Freemium model, everything is not so smooth: even if the free trial version can get a mad number of downloads, the actual number of paying users will be less than if the application were paid.
Advertising and in-app have about the same user base and revenue. The subscription model has the smallest base of active users, but brings the greatest revenue, however, such a model requires constant maintenance of the quality of content and extensions within the application, which naturally increases costs.
The picture is somewhat different if you take into account applications with high revenues. At this point, paid applications are far behind both in terms of ARPU and the total user base and revenue as a whole. This does not mean that you can not have a paid application with good revenues (Minecraft for example), just the chance to repeat this success is much less.
Subscriptions are still the most profitable model, although not so much getting ahead. Smaller ARPU for subscriptions means that top applications with this model have a very popular free part of the application.
The freemium model at this level (taking into account top applications) shows results much better than paid applications, both in terms of active users and in terms of revenue.
Finally, in-apps and ads have the largest databases of active users, providing their main functionality for free. However, a well-thought-out system of in-app purchases allows this monetization model to eliminate advertising in terms of revenue with some margin.
In addition to all this, it should be borne in mind that the average revenue per active user must significantly exceed the cost of “maintenance” of this user (and this is not to mention the cost of raising). This is especially true of developers whose applications use server technology (BaaS). For example, if the majority of developers earn 4 cents per user per month, then at an average BaaS cost per user of 3 cents, the developer will not have much profit.
PS You can find the interactive schedule in the source.
Probably both of these facts had their effect, but you should not forget that, along with in-apps, a fairly large revenue stream generates a subscription model.
If we exclude the developers of top applications (those who earn more than $ 50 thousand a month from an application and have more than 500 thousand active users), it turns out that attracting users and their subsequent retention was one of the most important aspects. Moreover, the average revenue per active user is rather static regardless of the monetization model.
')
"
The graph shows the average revenue per active user by different monetization models. On the left, applications earning more than $ 50,000 are excluded. On the right, they are included, for clarity of the influence of this factor. This data is based only on those applications where analytics is embedded.
In this study, a Freemium application is meant to be limited to a free application, with a separate paid version advertised for free, or a free application with an upgrade through in-app.
In-app purchases - any virtual benefits, features or content acquired within the application. The application itself can be both paid and free.
It is worth noting that developers can use several monetization models at the same time (it happens quite often). For example, freemium application with advertising in the free version.
The average number of models used per developer in this study is 1.7. Therefore, if we take developers who use only one monetization model, in general, the picture remains almost unchanged.
For most developers, an active user costs about 4 cents per month.
If you do not have an excellent reputation or cooperation with some well-known brand that can attract a large number of paid downloads, it is best to avoid a situation where the user pays for the main function of the application.
Refusal of the paid model will lead to more downloads and significantly expand the user base.
With the Freemium model, everything is not so smooth: even if the free trial version can get a mad number of downloads, the actual number of paying users will be less than if the application were paid.
Advertising and in-app have about the same user base and revenue. The subscription model has the smallest base of active users, but brings the greatest revenue, however, such a model requires constant maintenance of the quality of content and extensions within the application, which naturally increases costs.
The picture is somewhat different if you take into account applications with high revenues. At this point, paid applications are far behind both in terms of ARPU and the total user base and revenue as a whole. This does not mean that you can not have a paid application with good revenues (Minecraft for example), just the chance to repeat this success is much less.
Subscriptions are still the most profitable model, although not so much getting ahead. Smaller ARPU for subscriptions means that top applications with this model have a very popular free part of the application.
The freemium model at this level (taking into account top applications) shows results much better than paid applications, both in terms of active users and in terms of revenue.
Finally, in-apps and ads have the largest databases of active users, providing their main functionality for free. However, a well-thought-out system of in-app purchases allows this monetization model to eliminate advertising in terms of revenue with some margin.
In addition to all this, it should be borne in mind that the average revenue per active user must significantly exceed the cost of “maintenance” of this user (and this is not to mention the cost of raising). This is especially true of developers whose applications use server technology (BaaS). For example, if the majority of developers earn 4 cents per user per month, then at an average BaaS cost per user of 3 cents, the developer will not have much profit.
PS You can find the interactive schedule in the source.
Source: https://habr.com/ru/post/175081/
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