Monetizing Mobile Apps In India: What's The Best Strategy?

Some enthusiasts build mobile apps as a pastime. But a lot of them also build them for a living, and there is no doubt about its huge earning potential in the app market. But what is the best way to make money off mobile apps? Is there a specific strategy that works? We get the opinions of some industry experts and developers to find out!

What are key monetization strategies for mobile app developers in India?

Industry Panelists

Developers should be able to create a compelling app, which will have the quality to price itself. We all intend to make money, and when monetization happens, value in apps are unlocked. Once the value is unlocked, people make the effort to take advantage by paying for the app. I always ask my developers, “Why would somebody care that you made this app?”. One has to understand the consumer and need of that value in the market to make a compelling app. The solution to successful monetization is to put emphasis on the value construct first.

You should not rely on only one type of monetization. In-app purchases work the best for games. For example, if you're playing Angry Birds, users are likely to make purchases to proceed further in the game when it is so immersive. In the education category, the freemium model works the best. For e-commerce apps, free apps work best because additional revenue is earned from purchases. While ad-based models work best for Android, the paid model works well on iOS. I would not recommend Android from a monetization standpoint. But for Apple's App Store, users are standing with wallets open! If it has a value proposition, any app can sell. There's no reason to restrict your market to India as developers can publish it in any market, and if it is a quality app, people will pay money to buy it!

Like any market, the right monetization strategy in India depends on the type of app. Brands like Rovio, Rockstar, and Disney are dominating the top 10 in paid apps, with established, successful franchises like Angry Birds, and their spin-offs. The top 10 in free apps is a much more open field right now. If you're not a name brand, you'll have a better shot at getting established as a free app, than a paid app. In the short to medium term, Android has better earning potential in India simply because of much higher market penetration of Android phones versus iPhones. Apple currently has a 1.5% share of Indian handset market, a little less than 25% of the smartphone market.

Individual Developers

Android

A free model, with advertising, is the best model in India. Launching paid applications is a bit difficult in India, and people are not inclined to paid apps. Most people are okay with advertising in apps, but they become disinterested when they see a charge in front of the app. Android is a better platform in terms of earning because of the huge number of users in India.

Android

For my app, I currently sell banner ad space on my application, using AdMob services and I am getting revenue this way. However, the best monetization strategy would be through in-app purchases, selling items in the app itself. This is preferable to display advertising, as mobile screen space is limited, and part of it is used up by ads, making it irritating for users. Some users even switch off Wi-Fi, GPRS to offline apps to avoid the ads, so people are taking shortcuts out of it. By providing in-app purchases, the app becomes a better experience for the user and monetization occurs! Users don't see it as spending money, but as improving their experience.

Windows 8 & Android

The Indian mentality is that we don't want to spend even a single rupee for buying an app. In India, if you price-tag an app from launch, you will never be able to reach people. The best monetization strategy is to make it free initially, but offer premium or advanced services as paid services. While 60% of users may stop using after a while because of this, 30-40% of people will purchase the premium services if it's a quality app. When I published a book online and put a price tag on it, I provided a free sample of 10 pages. Most of my friends read the free 10 pages, and decided it was enough! This shows that people will only consume what is free, and this same mentality applies to the app world as well!

According to my study of the market, people use devices that are popular in the market. Android has better earning potential because even low-end devices like Karbonn phones have Android on them. Hence, a freemium model on Android would be the best monetization strategy for a new developer.

So what's the verdict?

The majority of industry stalwarts and developers we interviewed voted in favor of ad-based or freemium models to make money off apps. While iOS users do have a high tendency to pay for apps, the Indian smartphone market is dominated by Android, whose users stick with free apps. Hence, selling ad space or providing in-app purchases could provide the best route for aspiring Indian developers to earn a living. That being said, the mobile app space is ever-evolving and intensely competitive, so apps need to be top-notch to be noticed.