The document discusses monetization strategies used by photo app developers, highlighting diverse models such as charging for apps, in-app purchasing, and advertisements. Key trends indicate a shift towards higher pricing and the growing importance of in-app purchases, while the document also emphasizes the significance of a scalable user base for long-term revenue. Additionally, it suggests that while paid apps can be viable, developers should evaluate their revenue goals to avoid limiting monetization options.

1. Monetizing apps –
lessons from photo
app developers
Hans Hartman
President Suite 48 Analytics
Chair Mobile Photo Connect
November 13, 2013
Suite48Analytics

2. Sources
— Monetization
interviews for RPI
◦ Photo app developers use diverse
monetization models; open to experiment
— Monetization
panel at Mobile Photo
Connect conference
◦ Scalability determines monetization options
— Photo/Video
Apps Market Analysis
◦ With category maturing, successful apps
adopt higher prices and in-app purchasing
— Ad
hoc discussions with developers
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3. Monetization options popular
among photo app developers
— Charge
— In-app
for app
purchasing (IAP)
— Advertisements
— Selling
— Pay-out
third party products
later: at exit
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4. Charge for app – trend
— Trend: more
top selling photo/
video apps charge higher prices
Pricing over time
45%
40%
35%
30%
25%
$0.99
20%
$1.00-1.99
15%
>$1.99
10%
5%
0%
Suite48Analytics
Suite 48 Analytics Photo/Video Apps
Market Analysis, November 2013
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5. Charge for app –
considerations
— How
high are your user acquisition
costs?
— How viral is your paid version vs. a
free alternative?
— How high are your support costs?
— Is a free super lite version with IAP
an alternative (de facto trial version)?
— Can revenues from paid apps scale
enough?
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6. In-app purchasing – trend
— Trend: IAP
is still growing among
top selling photo/video apps
60%
IAP on iOS over time
60%
50%
IAP by OS/payment
50%
40%
40%
30%
30%
20%
20%
10%
10%
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
0%
Suite 48 Analytics Photo/Video Apps
Market Analysis, November 2013
Suite48Analytics
0%
iPhone free
(n= 50)
iPhone paid
(n= 50)
Android free Android paid
(n= 50)
(n= 50)
Suite 48 Analytics Photo/Video Apps
Market Analysis, November 2013
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7. In-app purchasing –
considerations
— IAP
was the buzz 6-12 months ago,
inspired by the games world
— IAP is only scalable per user if many
options, often refreshed inventory
— IAP poses tradeoff challenges:
“in your face” vs. user-friendly
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8. Advertising
— Methods:
◦ Generic ads – low revenues, often not
relevant to user
◦ Targeted ads – leverage user data (content
categories, geo data, hashtags, etc.)
◦ UCG-integrated “ads” – promotions,
contests, brand mixed with UCG
integration, sponsorships: today’s buzz
— Scale
matters
◦ Ad networks vs. in-house sales
◦ UCG-integrated “ads” require large base
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9. Selling third party products
— Products
offered through APIs:
◦ Physical products, e.g. photo products
◦ Third party functionality, e.g. photo filters
— Considerations:
◦ How many different APIs can you
realistically support?
◦ What happens if you stop offering third
party products?
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10. Payout later – at exit
— No
monetization yet – build a viral,
loyal user base that has long term
monetization potential and is
attractive for acquirers or IPO
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11. Takeaways photo app market
— Scalable
user base – produces most
monetization options long term
— Ads – the more scalable & targeted the
user base, the higher the revenues/user
— IAP – hard to scale, safe interim solution
— Paid – viable option up to a certain
scale; challenge is to devise
“consumable” products or services
— Be clear about your revenue goals –
they might limit your monetization
options
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12. Thank You
Hans@suite48A.com
Suite48A.com
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