I posted this on my development company’s site LPD Interactive, but thought it was relevant here too. This question is constantly brought up by my clients. What’s your insight on free vs paid apps? Which one is better? My first response is usually “Would you rather pay for an app or get it for free?” Beyond the obvious everyone likes a deal thought, you really don’t have to look any further than the Top Grossing apps on the App Store, which shows that there are only three out of the top 50 apps that are paid. So, might simple answer is usually “go with free.”
But let’s look a bit deeper. Most are familiar with Distimo’s report last year that showed how many downloads it takes in the various app categories to reach the top 25. Now, since this report is from May 2012, we can probably assume that the numbers have increased (probably quad-fold (is that a word?). Regardless, the trend is most likely the same this year as it was last year … you get more downloads as a free app than as a paid app. So you can deduce that if you have more people playing or using your free app with in-app purchases … you’re going to make more money than have a few people buy your paid app. This is all backed up by the fact that there are only three paid apps in the Top 50 Grossing apps as I mentioned above.
A few notes / thoughts on free vs paid apps:
- Out of the top 32 overall Top Grossing apps … only one of them is paid and it’s a massively popular game (minecraft); see attached screenshot. Stretch that to top 50 and there are 3 paid apps. So the trend is definitely the freemium model.
- This freemium model has also led to the mindset that “why should I pay for the app when there is another one just like it for free” You definitely have better data/matchup deals/UI, but in a bargain shopper’s mindset … is it worth the $.99 barrier?
- If you go freemium, you always have the ability to add premium features via in-app purchases
- If you go paid, you’ll upset people if you find you’re not getting enough downloads and then make it free.
- I’ve run Ad campaigns for clients via iAds and Facebook mobile ads and they highly recommend to not run ad campaigns with paid apps as the fall of conversion to download is tremendous like it drops by 85% or something like that so you’d have to throw massive amounts of budget to see a %15 increase in downloads.
- As for numbers, check out this report from Distimo that was picked up from TechCrunch last May
- To hit top 25 in lifestyle for PAID downloads you need to hit 1k
- To hit top 25 in lifestyle for FREE downloads you need to hit 3.9k; meaning there are nearly 4x as many downloads in the free category than in the paid category.
If you look at the other categories it’s almost the same in that the free vs paid apps get more downloads so you have more people to see and potentially buy your in-app purchases. So what do you think about free vs paid apps?
Let me know if the comments below.