Monetization CS 4720 – Mobile Application Development CS 4720
Making Money • Let’s stipulate that working for a company to build custom apps (either for that company or as a consultant) is the “safest” way to make money building apps • Plenty of developers head to the app store hoping to strike it rich with the next Flappy Bird • Let’s consider this for a moment CS 4720 2
Making Money • Let’s look at some facts: – There are hundreds of thousands of apps in each store – The platform holders take up to 30% of your revenue – Most of the software costs for mobile apps is up front, i.e before people have paid you CS 4720 3
Making Money • How are you going to get noticed? • How are you going to earn enough to make the next app? • How do you get the money to make the first app? CS 4720 4
Monetization Strategies • Paid Apps – Users pay up front to download and use the app – Picking the right price point is key – Updates to this particular app are free • Challenge – Generating enough downloads to be profitable CS 4720 5
Monetization Strategies • Ad Supported – Give away the app for free – Incorporate a supported ad framework, like AdMob or AppleAds • Challenge – Ads take up real estate – You have to plan around where things will be on screen – Bandwidth / resources to process ads CS 4720 6
Monetization Strategies • Free-to-Play (games only) – Give away the game for free – Incorporate a gameplay mechanic that encourages players to spend money – This could gain a game resource, reduce a timer, add cosmetic elements, etc. • Challenge – A good game mechanic built around this without frustrating the user is difficult to find CS 4720 7
Monetization Strategies • In-App Purchases – Give away the app for free (or at a low cost) – Only have some of the functionality available or offer more complex options for a fee – Users can “custom build” the experience they want to pay for • Challenge – Making the app useful enough to download the first time and still enticing people to pay money CS 4720 8
A Lesson from Games • The challenges of pricing – How can you do an effective sale to drive download when your price is $1.99? – Race to the bottom of pricing • Free-to-play dominates the app stores – Highest grossing paid game? Minecraft – Game of War makes 45 times what Minecraft makes (est. $1.46M per day in 2013) CS 4720 9
A Lesson from Games • A $1.99 app makes the developer roughly $1.40 per download • The app needs 8,407 downloads per year for a solo developer to hit the 2015 US poverty line ($11,770 per year) • This does not include: – Other devs – Tools and resources – Equipment CS 4720 10
Let’s Do It! • Make an LLC (Limited Liability Corporation) • In case your app does something really, really bad, an LLC will protect your personal assets in case you are sued • Also nice for tax purposes CS 4720 11
Which Platform? • We’ve discussed this! • Where are the users you want to target? • How much do you plan to charge? • How much do you want to invest? • Where do people expect a premium experience? CS 4720 12
Which Platform? • Some thoughts: – iOS users spend roughly 3x more than Android users on apps – Android has the larger market share – Android is more the choice of businesses CS 4720 13
Marketing • Getting noticed makes all the difference • Getting on the landing page for the store makes a HUGE difference • Limited opportunity to get noticed CS 4720 14
Marketing Strategies • Physical (fliers) w/ QR codes • Google AdWords (or other search engine optimization) • Have a website! • Partner with another app • Social networks • Review sites CS 4720 15
Investment • Looking for money to get started? • Well… don’t count on it • #1 request CS profs get from non-CS students at UVa? – “I have this totally sweet idea for an app/website. I just need CS students to build it for me.” – It’s usually a reskin of Facebook… • Sometimes you have to take the plunge CS 4720 16
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