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Posted by at 5 August , 2014

How do we justify paying for services that we expect for free on the Appstore?

So let’s get this out of the way first…Everyone likes FREE stuff! Think about it for a second. We get giddy when we receive anything for free. Think of the free sample you got while strolling around at the mall today. How did it make you feel?

It’s basic human nature to get a happy when we get stuff for free. But the same rules do not apply to Apps and Software.

This all stems from the fact that we’ve been spoiled for the last few years by many App developers who can afford to give away their applications for free. It’s created a marketplace that is highly unstable to create any real working software businesses that don’t rely on Venture Capital to get them up and running. The mentality has been that all developers can give away their Apps for free.

The truth is they cannot afford to do so!

Here is a snapshot of the top apps in the App Store today as of July 31st, 2014:

What sticks out to you? If you look at the middle column in the Free Category you will see it’s either games that offer In-App purchases models or established companies like Skype, Google, Netflix and even Apple that can afford to give away products for free.

Facebook alone is trying to take over your phone screen by separating out their apps from the core social media product . There are two great articles to read. One by Tero Kuittinen on Forbes.com aptly titled “Paid App Market Is Shrinking With Stunning Speed“, the other a use case study on App Annie on Mobile App Advertising and Monetization Trends 2012-2017: The Economics of Free which is very telling about where all app monetization plans will be heading and how consumers will be affected in the coming years.

“Mobile Apps Capture More Eyes… and More Advertising Budget… Mobile device install base worldwide is skyrocketing, with a 49% jump in key countries from 2012 to 2013.” – App Annie

So what does this all mean to you as the consumer?

The Era of Free Apps is coming to an end!

If it’s any indication we will start to see the end of free apps sooner rather than later. It’s just not a sustainable business model. Future app business models will more than likely look like this: 1) Up front pricing with a One Year software license 2) A recurring in-app purchase subscription on a monthly basis or 3) Free apps with Ads built in to make up the revenue.

As developers look for ways to create sustainable sources of revenue many will look towards the in-app purchase model. This article on why Kim Kardashian: Hollywood is raking in $700,000 a day  is a perfect example albeit exaggerated on how developers can generate more revenue by adding in-app features to a product. This points to the larger picture of how many Apps are offering the In-App purchasing option.

Changing the Users Mentality

We’ll end this post by saying a few words of encouragement. App Developers are  people too. These apps help you in your daily life and they have become our go to sources to organize our digital lives and escape for few minutes a day. Support the developers that create Apps that you feel add value to your life and work with them through feedback (We appreciate feedback!).

Think about how much you spend on a cup a coffee a day? $2.50 a day? That comes out to about $70 a month on coffee alone. Sometimes these apps cost you less than 5 cents a day and they add tremendous value to your mobile product.

Support the developers and be part of the new App ecosystem.

 

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