Mobile applications have a vital role in the wireless industry of smart phones, tablets, and IPODS. Many app developers have found it a challenging business to be in creating a product that will find success and provide revenue out of it. But in fact, projected revenues for next year for mobile apps is whopping $13 billion. Developers can work part-time, full-time, or just as a hobby to make the next big hit. But, the real question is how are they making this money?
Ben Hanley, senior product manager at Evans Data answers with, “We expect the industry to mature, over time you will see the proportion of full-time developers grow relative to the other major profiles.” Fierce Developer The word “mature,” I think, is an appropriate word to use as a description of both the technology as well as money to be made through creativity.
With this rapidly growing industry the structure of distribution has to adjust to this newer technology. Just like with any new item on the market today there needs to be a plan for how revenue will be made, and how the item will continue in the “long-tail of things” according to Jeffrey Ulin’s Rule of Distribution.
A couple of larger companies that program apps (OneLouder, Riverman Media) have found successful routes of doing just this. OneLouder is a social mobile app developer company that offers free app downloads for the consumer. Their plan is to generate revenue through advertising within the app, and to lock-in loyal long-tail consumers they create by updating the app once a week. They launched the business by having a clear cut vision of what exactly they want, and sold the pitch to capital firms to back their operation.
As for Riverman Media, they have a different method for creating profit. They sell their apps ranging from $0.99-2.99 per downloaded 2D game. They focus on making quality games that will keep loyal consumers coming back for more. Their strategy is to create quality games at a low cost with minimum employees. They do this so they can self-support and have no outside source conflicting on programming ideas because of investments.
There are other ways in order to create money out of a “free” mobile app. Along with the upfront cost of downloads and in-game advertising there are other ways: level advancement costs, hints, special purchases, and free trials with later subscription costs. App designers need to figure out how they want to generate revenue. The Utility-Engagement Model shows the way in which one should look at constructing a game and what the goal and vision is in creating the application. For a better understanding of the model here are some bullets to make sense of it all.
•Utility, meaning how useful a person finds the app
•Engagement, meaning how often a person uses the app
•Value, meaning how much the person likes what the app provides, relative to the universe of other options
Flappy Bird as a prime example of an independent programming studio gathering the green president faced paper, we all so desire. The game was created in 2013 in a Vietnam-based developing company. The creator locked down the in-game advertising model of the game and made $50,000 per day from this.
It seems that most app creators are within a studio setting and are working full-time, but there have been some who have figured out how to make money on their own. With all the resources available online today do you think it possible to use your own imagination and create a new mobile app hit? Will the app market continue to mature and be a money maker and job maker?
– Stacey Krull