"monetizing apps: lessons from photo app developers" by hans hartman, president, suite 48...
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Rebooting the EU App Economy / Fraunhofer HHI, Berlin, Germany / 13th November 2013 Hans Hartman, President, Suite 48 Analytics "Monetizing Apps: Lessons from Photo App Developers" Hans Hartman is president of Suite 48 Analytics, a market research company focused on mobile photography, and chair of Mobile Photo Connect. Previously he was chair of the Seybold PDF Conferences and conference director of Future Image Mobile Imaging Summit Europe. Hans is also a GigaOM Pro Analyst and was recently named “Mobile Power Player” by AlwaysOn.TRANSCRIPT
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%
15%
20%
25%
30%
35%
40%
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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0%
10%
20%
30%
40%
50%
60%
May
-12
Jun-
12
Jul-
12
Aug
-12
Sep
-12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb
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Mar
-13
Ap
r-13
M
ay-1
3 Ju
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Ju
l-13
A
ug-1
3 Se
p-1
3 O
ct-1
3
IAP on iOS over time
0%
10%
20%
30%
40%
50%
60%
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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