It’s back to school time and class is now in session. Welcome to the GeekGamerGuy School of App Prosperity where you will learn the ins and outs of app development and how to successfully launch and optimize your app.

See the full introduction here.

Monetization 101: To Premium or not to Premium?

A Premium app charges up front for its download and is a model closer to an app as a product on the continuum of sales models than free applications which lean closer to apps as services.

The premium model in mobile is the closest to traditional console and PC downloadable model of going to a store, buying a cd or cartridge and bringing it home to play. In this modern world the store and media is all virtual and has its own advantages and disadvantages.

There are pros and cons to the premium model so let’s explore them now.

Pro Premium Model Points

  • The premium model has the advantage of immediate cash flow. The user has to pay to experience the app so you know every download is immediately in the plus column as income.
  • Premium apps driven by intellectual property have a high chance of success. Users are still willing to pay for names they recognize in the app store and with a quality app behind it can be very successful. Example: Ice Age Movie Storybook
  • The premium model can be very successful on small scales if they appeal to a very specific audience. Enterprise apps that appeal to a small, specific need can be quite lucrative. Example: 1Password

The number of Premium apps being downloaded is shrinking drastically in the face of free apps but there is still plenty of money in the premium space. The average user will download 1 premium app for every 11 free apps according to Distimo*.

Con Premium Model Points

  • The expectation for quality on premium apps is extremely high. If the app is not perfected a paying user is more likely to leave a negative review and drive your app down the charts very quickly.

Is premium for me?

The decision to ask users for money up front for your app is a difficult proposition and there is no one way to determine the answer but there are some questions you can ask yourself to help you with this conundrum.

  • Does my app have a recognized IP? If it does you’ll reduce the risk of being premium.
  • Is my app unique and new in the space?
  • Is my app of equal or higher production value of similar apps in the space?

Answering these questions will give you a good idea of whether or not you should be offering your app as a premium or a free app. We’ll take a look at the alternatives to premium in the next installment.

* http://www.insidemobileapps.com/2012/09/18/distimo-u-s-consumers-download-15-free-apps-for-every-paid-app-purchased-in-the-iphone-app-store/

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