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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5%

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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

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In-app purchasing – trend � Trend: IAP is still growing among

top selling photo/video apps

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May

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Jun-

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IAP on iOS over time

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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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Thank You

Hans@suite48A.com Suite48A.com

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