distimo publication january 2012

8/2/2019 Distimo Publication January 2012

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Distimo was founded to solve the challenges created by a widely fragmented app store marketplace filled

with equally fragmented information and statistics.

Distimo was launched shortly after the introduction of the first app store. App stores have clearly shown

since that time that they are the way forward for content distribution. The app store model offers an

enormous opportunity for developers to get their content out and dramatically improves content discovery

by consumers. However, the mobile market has long been characterized by fragmentation, which is

also displayed in the wide range of mobile application stores that were launched from 2009 on.

Distimo is a privately held company based in Utrecht, The Netherlands. Learn more: www.distimo.com

The impact of app discounts and the impact of being a featured appDistimo Publication January 2012

By Gert Jan Spriensma, Analyst at Distimo

Distimo 2012, some rights reserved

Apple App Store for iPad

Apple App Store for iPhone

Google Android Market

IPAD

IPHONE
http://www.distimo.com/http://www.distimo.com/


2/12

Distimo Publication - January 2012

Distimo 2012, some rights reserved.All trademarks are the property of their respective owners.

This report gives an overview of the effects when an application is featured in the Apple

App Store for iPhone, Apple App Store for iPad and Google Android Market. Moreover,

this report shows the effects that occur when applications are put on sale. We conclude

with data about the average prices of the highest grossing applications and an overview

of the types of applications that generate the most revenue. All data covers the Apple

App Store for iPhone, Apple App Store for iPad and Google Android Market during the

period October December 2011 in the United States, unless otherwise noted.

The major findings are:

One of the ways publishers try to attract attention to an application is to put the app

on sale. The average revenue rose by 41% in the Apple App Store for iPhone when

looking at those applications that were already among the 100 highest grossing

applications in any category, on the first day of the sale. Moreover, the revenueduring the whole sale increased by 22%. In the Apple App Store for iPad those

figures were +52% and +19%, respectively. In the Google Android Market on the first

day the revenue increased by 7%, and during the whole sale increased by 29%.

30% to 50% of the applications on sale experienced a decrease in revenue even

though on average the revenue increased in all three stores for the total group of

applications on sale. Our research found that it is important to offer a significant

price reduction to actually earn more revenue when putting an application on sale.

In general, we noticed that the optimum sales occurred when the price was cut in

half or the application was offered in tier 1 ($0.99) or tier 2 ($1.99).

Another way to attract attention is by getting featured in one of the app stores. When

looking at those applications that were already ranked among the top 100 most

popular applications, the average gain in the first three days after getting featured

was highest in Google Android Market (+42 ranks), followed by Apple App Store for

iPad (+27 ranks), and Apple App Store for iPhone (+15). Looking at the whole period

these applications were featured (seven days), the rank gains were more or less

equal to the three days average in both Apple stores, but were even higher in the

Google Android Market (+65 ranks).

There were also significant effects after an application was featured. In the five days

after the featured period ended, the gain was still +145% in the Apple App Store

for iPad, +75% in the Apple App Store for iPhone, and +828% in the Google Android

Market. +828% exemplifies a rank change from 8 to 1 or 100 to 12 in the Google

Android Market.

NEW AND NOTEWORTHY


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INTRODUCTION

Being featured by one of the top app stores means more visibility for the developer

of the app and more downloads. Developers are able to see when they are featured

to explain unexpected spikes in the download volume using Distimo Monitor. Manydevelopers aim to be featured in one of the app stores, however the mechanism behind

this is largely unknown. Many developers would like to know the gains before putting

a lot of effort into the process. Therefore, the question To what extent does being

featured increase downloads? is highly relevant.

There are several featured categories in the Apple App Store for both iPad and iPhone,

but in this research we looked only at New and Noteworthy and Staff favorites. Another

prominent featured category, Whats Hot, is based on what is already popular and thus,

disregarded. The featured category, Staff Picks in the Google Android Market is used

to analyze the effects of being featured. The category, Editors Choice is not updatedregularly. In fact, most applications listed in that featured category have been there

since at least August 2011, and therefore this category is not used for this analysis.

EFFECTS OF BEING FEATURED

The figure below shows the average gain during the first three days after an application

is featured, and the data shows the effects are significant. In the Apple App Store for

iPhone the average jump in ranks of applications that have been featured in Q4 in the

Apple App Store for iPhone was +15. Of course, some applications gained significantly

more, while others barely see any effect from being featured. The applications that werefeatured in Q4, but were not among the top 100 most popular applications in a category

before being featured are not taken into account, as it was not possible to determine

the gain in ranks.

The same trend can be observed looking at the Apple App Store for iPad and the Google

Android Market. In fact, the gains of being featured there are much higher. In the AppleApp Store for iPad the gain was +27, while in the Google Android Market the direct

effect of being featured in Staff Picks was a gain of +42. The table below shows the

proportions of applications that gained more than 50 ranks, 25 ranks, lost ranks, or lost

more than 25 ranks, and thus did not profit from being featured.
http://monitor.distimo.com/http://monitor.distimo.com/


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In the Apple App Store for iPhone almost one-third of the applications that have been

featured over the past quarter did not gain in the first three days after being featured.

While this figure is much lower for the other two stores, it is clear that getting featured

not necessarily implies more downloads.

Not only the first few days are relevant, given that applications in general, are featured

for seven days in all three app stores. During all seven days that each application is

featured, the average gain compared to the last non-featured day, is +65 in the Google

Android Market, +15 in the Apple App Store for iPhone and +28 in the Apple App Store

for iPad.

These rank differences may seem spectacular, but a rank jump from 10 to 5 means a

substantial uptake in downloads, while a rank jump from 50 to 45 is significantly less

beneficial. Therefore, in the graph below the relative rank changes are depicted. A rank

change from three to two is presented as an increase of 50%, while the rank change from

50 to 25 equals an increase of 100%. All figures shown are seven day averages, e.g.,on a particular day in the featured period the difference can be larger. More detailed

information about rank changes can be found in our monthly featured publication.

Per the above graph, approximately 50% of the applications that have been featured

in the Google Android Market experienced an increase of more than 100%, while more

than one-third of the featured applications in the Apple App Store for iPad gained more

than 200%. Ranks in the Apple App Store for iPad increased by 252%, in the Google

Android Market by 172% and in the Apple App Store for iPhone by 137% on average over

the seven-day period.
http://report.distimo.com/featured-reports/http://report.distimo.com/featured-reports/


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Finally, what is interesting is what the effects are after the featured period ends. We

chose to use the average of the next five days, and found that being featured has a

positive effect on the performance in the long run as well. On average the gains in the

five days after being featured were still +145%, +75% and +828% in the Apple App Store

for iPad, Apple App Store for iPhone and the Google Android Market, respectively.

Please note that in this analysis we only used those applications that were already

among the 100 most popular applications in any category before getting featured.

Looking at the store differences, we see that being featured in the Google Android

Market has significantly more effects on the ranking than in the other two stores. Even

more interesting are the long-term effects. In the Apple App Stores the effect of being

featured fades, but in the Google Android Market the average gain in ranks increases

to 828%! This can partly be explained by the number of days taken into account to

determine the ranking, e.g., the Apple ranking algorithm takes less days into account

compared to Googles. However, this is only a part of the story; getting featured inGoogle is very beneficial for publishers!

EFFECTS OF PUTTING YOUR APP ON SALE

Although the stores have a monopoly on the shelf space in the app store, there is a

way to get your own app in the picture without ad campaigns. Applications that are on

sale tend to get a lot more attention and downloads than when they are not on sale.

However, this comes at a cost as well; you have to sell your application for less. On the

other hand, when the surge in downloads makes up for the loss in price, an application

can also make more money while on sale. And observed in the figure below, thats

exactly what happens in all three stores. Based on the list of the 100 top grossing

applications in any category it is possible to measure the revenue effects per day for

applications that cut their price in the United States.

On the first day of the sale, the average revenue increased by +41% in the Apple App

Store for iPhone. Moreover, the revenue during the whole sale (we looked at a maximum

of 15 days) was up by +22%. So, on average, putting an app on sale pays-off directly in

the Apple App Store for iPhone. This trend can also be observed in the other two stores.

The first day effect is larger in the Apple App Store for iPad (+52%), and the increase

in revenue during the sale in the Google Android Market was the highest at +29% on

average.


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Not all developers enjoyed higher revenue during the sale period, however. When

looking closer at these numbers; 44% of the iPhone applications that have been on sale

lost revenue during the sale, and 23% saw a decline in revenue by more than 20%. This

can be partly explained by the chosen strategy. For example, offering a discount of one

dollar on an application that normally costs $7.99, lowers the revenue, whereas offering

a discount of three dollars on average increased the revenue by 131%. In general, we

noticed that the tipping point happened when the price was cut in half or the application

was offered in tier 1 ($0.99) or tier 2 ($1.99).

The graph below provides valuable insights to support the statement stated within this

months report. The graph utilizes the data from the table above, but now with a third

dimension the price cut. We looked at the cases where the normal listing was cut by at

least 40%, 50%, 60%, 70% and 80%. When looking at those cases in the Apple App Store

for iPad, a declining trend for the negative brackets (+50%). Moreover, the differences are quite substantial. For example, the proportion

of applications with more than 20% loss in revenue, increases from 34% (when price

cut is at least 40%) to only 19% (when price cut is at least 80%), while the proportion of

applications with more than 50% increase in revenue goes from 11% to 30%. Please note

that the data used in this graph are the averages over all days that each application was

on sale.

Concluding, despite the risk of loss of revenue, putting your app on sale once in a while

seems to pay off for the majority of applications and their developers. It is important

to offer a significant price reduction to actually earn more revenue, however. Please

note that we only used applications that were already among the 100 highest grossing

applications in any category before the sale.


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Of course, this does not say anything about individual applications. For example, in this

report we assume zero marginal costs (except the app stores cut), which will not be the

case for most developers. Moreover, we have not looked at the long term (more than

five days) effects of price cuts. However, these findings certainly indicate and point to a

trend, and developers who are keen to evaluate their pricing strategy should ensure it

is still the optimal one.

SO WHAT PRICE SHOULD I ASK?

This depends highly on the type of application you are (about to) publish, of course.

Applications that are relatively easy to make and are copied quite fast, are typically

priced lower. Applications that require a lot of work besides developing the application,

e.g. navigation apps, tend to be priced significantly higher. The graph below reveals the

average price among the top grossing applications per category in the Google Android

Market and the Apple App Store for iPhone and iPad.

But, the average price among the most grossing applications in a category doesnt

indicate how this compares to other categories. Therefore, the category breakdown

of the top overall most grossing applications is given as well in the graph above. For

some types of applications there is simply less demand and hence this analysis is less

relevant, however, for many categories it will to a large extent be a matter of pricing.

For example, the Business category is more popular by revenue and less expensive in

the Google Android Market. Distimo Monitor provides benchmarks to assess your price

better. With the pricing benchmark you can compare the price of your app with the

prices of the 100 most popular/grossing applications in the category in which your app

is published in all countries.
http://monitor.distimo.com/http://monitor.distimo.com/


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DISTIMOS PAID FEATURED DECEMBER 2011 REPORT FOR ASIA, NORTH

AMERICA AND EUROPE STARTING AT 399

Our Paid Featured December 2011 reports offer deep insights into all major

applications stores in North America, Europe and Asia. The reports will allow you to:

Gain insight into the change in the download volumes resulting from being

featured in the Apple App Store for iPhone or the Apple App Store for iPad.

Analyze the download volume generated in the Apple App Store and the Apple Mac

App Store and the revenue generated in the Apple App Store and Google Android

Market.

Identify the most successful regional applications and their publishers in each

store individually.

Analyze the share of revenue generated by apps with in-app purchases in each

region individually.
http://report.distimo.com/


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Rank Application Category Price

1Battle Nationsby Z2Live, Inc

Games-Action,Games-Role Play-ing, etc.

Free

2Infinity Blade IIby Chair Entertainment Group, LLC

Games-Action,Games-Adventure

$6.99

3Angry Birds HDby Chillingo Ltd

Games-Arcade,Games-Family

$4.99

4DragonVale

by Backflip Studios

Games-Role Play-ing, Games-Simu-lation

Free

5Smurfs' Villageby Beeline Interactive, Inc.

Games-Adventure,Games-Family

Free

6The Sims FreePlayby Electronic Arts

Games-Adventure,Games-Simulation

Free

7Modern Warby Funzio, Inc

Games-Role Play-ing, Games-Strat-egy

Free

8Grand Theft Auto 3by Rockstar Games


$2.99 - $4.99

9Poker by Zyngaby Zynga

Games-Card,Games-Casino

Free

10Card Ace: Casino HDby Self Aware Games


Free

MOST GROSSING APPLICATIONSAPPLE APP STORE FOR IPAD - UNITED STATES - DECEMBER 2012

- this application features in-app purchases


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MOST GROSSING APPLICATIONSAPPLE APP STORE FOR IPHONE - UNITED STATES - DECEMBER 2011


1Infinity Blade IIby Chair Entertainment Group, LLC


$6.99

2Grand Theft Auto 3by Rockstar Games


$2.99 - $4.99

3Poker by Zyngaby Zynga


Free

4Angry Birds

by Clickgamer.com

Games-Action,

Games-Arcade$0.99

5DragonValeby Backflip Studios


Free

6Call of Duty: Black Ops Zombiesby Activision Publishing, Inc.


$6.99

7Dream Zooby Zynga


Free

8Words With Friendsby Zynga

Games-Board,Games-Word

$0.99 - $2.99

9Modern Warby Funzio, Inc

Games-Role Play-ing, Games-Strat-egy

Free

10Batman Arkham City Lockdownby Warner Bros.


$5.99

http://clickgamer.com/http://clickgamer.com/


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MOST GROSSING APPLICATIONSGOOGLE ANDROID MARKET - UNITED STATES - DECEMBER 2011


1Defenderby DroidHen

Games-Arcade &Action

Free

2Tap Fishby Gameview Studios

Games-Casual,Games-Live Wallpa-per, etc.

Free

3Live Holdem Poker Proby Dragonplay

Games-Cards &Casino, Games-LiveWallpaper, etc.

Free

4Zynga Poker

by Zynga

Games-Cards &

CasinoFree

5Smurfs' Villageby Beeline Interactive, Inc.

Games-Casual Free

6Fashion Storyby TeamLava, LLC.

Games-Arcade &Action, Games-Casual

Free

7Paradise Islandby Cooper Media Corp.

Games-Arcade &Action

Free

8World of Gooby 2D BOY

Games-Brain &Puzzle

$2.99 - $4.99

9Life is Crimeby Red Robot Labs

Games-Casual Free

10DocumentsToGo Full Version Keyby DataViz, Inc.

Business $15,-



12/12


Distimo 2012, some rights reserved.

DISTIMO CUSTOM REPORTS

CONTACT US

ABOUT DISTIMO

Aside from this free monthly publication, Distimo produces custom reports capableof providing specific mobile application store analytics that are relevant to your

company. Custom reports are currently available for any country worldwide for the

Amazon Appstore, Apple App Store for iPhone, Apple App Store for iPad, Apple Mac

App Store, BlackBerry App World, GetJar, Google Android Market, Nokia Ovi Store,

Palm App Catalog, Windows Phone 7 Marketplace. Additional application stores will be

available in the coming months. To get a better idea of the type of data and metrics

that Distimo can provide, please visit our Report product page.

For sales enquiries, please contact Remco van den Elzen, VP Business Development at

[email protected] or call +31 30 82 00 567. For press enquiries please contact

Mindy M. Hull at [email protected] or call +31 62 504 7680 (EU) or

+1 415 889 9977 (USA).

Distimo was founded to solve the challenges created by a widely fragmented app store

marketplace filled with equally fragmented information and statistics.

Distimo was launched shortly after the introduction of the first app store. App stores

have clearly shown since that time that they are the way forward for content distribution.

The app store model offers an enormous opportunity for developers to get their content

out and dramatically improves content discovery by consumers. However, the mobile

market has long been characterized by fragmentation, which is also displayed in the

wide range of mobile application stores that were launched from 2009 on.

Distimo is a privately held company based in Utrecht, The Netherlands. Learn more:

www.distimo.com

Disclaimer

This work is licensed under Creative Commons License Attribution Noncommercial-Share Alike 3.0

Netherlands. This license is available for download at http://creativecommons.org/licenses/by-nc-sa/3.0/nl/.

This license ables you to use, copy, spread, and build upon this work non-commercially, as long as you credit

Distimo and license your new creations under the identical terms.
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