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A thumb rule for the Developer Dilemna: Free or Paid apps?

Posted in Applications and User Interfaces by Manas Ganguly on April 28, 2011

Should Mobile App Developers Focus on Free or Paid Mobile Applications – With so much Demand for Mobile Applications, Does it make a Difference? (A Linked in Discussion thread with my answer)

As a rule i believe, that the more progressively an app is oriented to a niche and focussed usage, the greater the capability of the app to monetize. An example here would be of a health care app which could bring certain benefits in terms of monitoring health or medication for the user. Monetizing such an app, which is deeper in scope of its objective would be relatively easier. Compare it against a weather app, and the ability of the app to monetize would diminish, though the target group would be a much larger section.

Secondly within its objective/ambit/usage, the more holistic (end to end) an app is in terms of resolving its objective, the monetization opportunity would be that much greater.The challenge here is not so much making the app as its discover-ability. But then, marketing the app rightly to the influencers in that niche can be an interesting way to make the app popular. In reference to the health care app example provided earlier, doctors or physicians are the ones who the app needs to market itself.

Secondly, as a pointer, the current app eco-system with its free, paid and freemium models will not possibly be the best in terms of monetization. Developers would make money when their apps are channels or media for advertisers to engage their customers better (and i am not talking advertising here). Refer here for details on apps as media channels.

New Monetization paradigms sought to support Profusion of App stores

Posted in Applications and User Interfaces by Manas Ganguly on March 10, 2011

The Profusion..

The count of application stores in September 2010 was 95 and I expect it to have crossed 150 as more and more “independent app stores” stores crop up. The latest in this count includes MDLE Alliance, Opera and Allview Mobile, each making their store announcements on consecutive days.

App store downloads and usage has seen huge growths. The first phase of growth has been a feature of in-device apps stores: Apple, Android, Ovi, Blackberry have dominated this era. Consider calling this “Apps as a support to device differentiation era”. In an earlier post, I had mentioned this as the 1st Gen App stores. The 2nd Gen App stores are the Operator apps stores. Essentially, these are white labeled independent app stores which the operators customize to themselves in the hope of differentiating themselves from the other. The revenue models in both these app stores is basis data downloads (for operators) apart from app subscription, in-app purchases and ad revenue.

The current profusion of App stores mostly independent ones, with no device integration and no short-cuts to discovery could thus be attributed as an “app bubble”. Having a few thousand applications in a web-based server, does-not guarantee anything for the app stores as long as there is no traffic. After traffic comes the question of monetization, which would be a far shot for most of the mushrooming apps stores.

Where’s the Money?

The point that I make here is that independent app stores would not be successful if they follow the 1st Gen App store model of monetization through App downloads and purchases. Thus these App stores would need to go beyond the current revenue and monetization paradigms.

Relook at Monetization Paradigm

The answer to this conundrum is provided for by the 3rd Gen App store model, where apps are a channel for brands to engage consumers. This differs from the ad being served up by the likes of Admob and inMobi and instead reaches out to much deeper levels of consumer interaction via APIs. What causes this shift is the fact that more and more of user behaviour is shifting “online” and Apps which assist this behaviour are likely to find “user stickiness”. Apps thus are the next gen internet delivery medium for the user delivering relevant targetted content and context to the users.

For instance, if my Facebook page shows that I am a “fan” of a brand, next time, I am in a mall which has the brand, there could be push communication asking me to visit the outlet to check out the latest offerings et all. This is a complicated process and would require a lot of APIs and Engines tracking consumer behavior and offering brand-relevant messaging at the right times. In essence, apps would thus be re-defined from “a stand alone app to augment the phone functionality” to a “active media channel which would be used to engage users and consumers by those who intend to do so”. That would be the next evolution in app-terms.

What would also be important in this context is that the app store is able to trace the user across different interfaces: Mobile, Web, TV and Car. The ability of an Apps store to combine these interfaces would give it the unique ability to profile target campaigns according to relevant audiences. How much money is there for taking? Lets just begin by saying this would be a substitute to TV advertising: far more focussed and relevant.

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