Common App Expenses Variable Expenses Commission to distribution platforms (Apple App Store/Google Play) Fixed Expenses Server hosting when app requires data storage Developer Program fee to sell apps (Apple App Store) Advertising for the app Salary for someone to troubleshoot, maintain, and update app Web domain name & hosting (name.com) Startup Expenses App software development & design (howmuchtomakeanapp.com) Software Database cloud setup Registration fee to sell app (Google Play)

APP REVENUE GENERATION STRATEGIES

The “US” Model

Paid App Users pay 1x to download app Pay commission goes to a distribution platform (i.e., Apple App Store, host on server ,etc)

Your app sessions are short Paid App Use When: Your content is unique Your app sessions are short Must increase users to increase revenue Will users understand the benefit of your app?

Paid App

Ad-Supported App Distribute your app for free partner with an ad network – like AdMob, InMobi, or BuzzCity

Long or frequent session times Ad-Supported App Use When: Long or frequent session times Native advertising embedded in the app itself Easy to build traffic Traffic must be high to earn revenue ($1 CPM) How often will users open your app in a year?

Ad-Supported App

Virtual Good (Freemium) App Distribute a free copy of the application Premium service/features offered (or ad removal)

Virtual Good (Freemium) App Separate App Freemium Free trial Unlock all app features Free can have ads, premium = ad-free Ex. 3 levels available in free version, pay to unlock all other levels In-App Freemium Additional features or content purchased while using app Ex. 3 levels available in free version, pay per additional level

Product delivers increased value over time Freemium App Use When: Product delivers increased value over time Product is viral Is there a single moment of desire in using your app?

Virtual Good (Freemium) App Separate App Freemium In-App Freemium Free $5.99

Freemium App

Subscription App Paying for service, not app Recurring (monthly) payments

Users have reason to keep paying Subscription App Use when: Users have reason to keep paying Users are willing to pay up front Is your app providing consistent new content or service?

Subscription Apps

SUBSCRIPTION APP ParenTV ParenTV is an app Carlos developed toThis app allows customers to remotely access the TV parent control panel from their smartphone. This app costs $2.99 / month. Carlos plans to sell this app through the Apple App Store, which takes 30% commission. Additionally, Apple charges a $99 yearly fee for developers to sell apps on their distribution platform. Carlos will take a salary of $100/month for maintaining and troubleshooting the app. He will only advertise his app on free platforms and personally in his neighborhood. SUBSCRIPTION APP

ParenTV 1 Month access to ParenTV control panel $2.99 $0 $0 30% App store commission $0.90 $0.90 $0.90 $2.09

SkateParQ SkateParQ is an app Kate developed to allow customers to find the nearest skate park. This app costs $6.99 to download. Additionally, once a week, customers will receive an in-depth look at a skateboard-related topic (i.e., skateboard designs, clothing, famous skateboarders, etc). Kate will be selling this app on her website. The credit card billing partner takes 2% of the app cost. Kate will take a salary of $200/month for maintaining the app and curating the content. She will need a server to host her app – the server will cost $1400 / month. She will advertise the app online ad networks – this will run her about $300 / month. PAID APP

SkateParQ 1 App Download $6.99 $0 $0 30% App store commission $0.14 $6.85

RBP-Relationship Building Program AD-SUPPORTED APP RBP – Relationship Building Program is an app that broadcasts podcasts relating to interests and concerns of teenagers across the country. Made by teenagers and ran by teenagers, Jack and Jill, will be hosting the program and distributing the app for free. They already have a substantial following because of their radio show and in-person talk shows through partnerships with community centers such as the Boys & Girls Club and 92 Street Y. They will have 1 banner ad on their app and will be paid by the advertising network a price of $1.50 CPM. This app will be available on Google Play, which takes 30% commission on paid apps and in-app purchases.

No commission on free apps RBP 1,000 Ad Impressions $1.50 $0 $0 No commission on free apps $0 $0 $0 $1.50

FREEMIUM APP FamiliesCool FamiliesCool is an app Jaimie developed to serve as a social network for families. The app is productive and fun and will offer structures for schedule sharing, communication, assigning tasks while promoting a family-friendly vibe for users of all ages. The app will be distributed for free, but there will be several premium services offered – for example, a subscription for full access to a more functional app, virtual gifts, and games. In the launch of the product, FamiliesCool will focus on family games that will cost $1.49 each. FREEMIUM APP

FamiliesCool 1 Unlocked Family Game $1.49 $0 $0 30% App store commission $0.45 $0.45 $0.45 $1.04