Sometimes Freemium Works

Paul Brown • June 8, 2015 10:00 PM

Looking at the variety of ways to make money in the App Store is always a fascinating discussing to me. In Freemium is hard, Marco reflects on Shuveb Hussain's experiment with taking a paid app freemium:

Freemium is hard. Its effectiveness depends on where you can put that purchase barrier in your app. Many app types simply don’t have a good place for it.

I've thought about this a lot with my app. I've got one app that has been through the same two revenue models that Shuveb went through. In my situation, though, it went the opposite way.

I released Easy Grade as a paid app in July 2012. It was selling a handful of copies a per week. I think for those first 6 months it made a couple hundred bucks. I don't know what actually made me think to do this, but I decided to take a chance on a freemium model.

My app had (and still has) a feature that distinguishes it from the other EZ-Grader apps in the store - it can calculate grades based on half-points partial credit (back-story here). I decided to put an ad at the bottom, and the In-App Purchase would remove ads and enable the half-points feature. I released this in January 2013.

This new freemium app did extremely well. To give you a visual, here's the comparison:

Being free boosted downloads by an order of magnitude, and by the end of 2013, I was even seeing noticeably more In-App Purchases than paid app downloads. The scales had tipped to the point that I eventually decided to pull the paid version in January 2014.

There was one major victory in this switch that I was not expecting. My app is used by teachers to calculate grades. They set the app the way they need it and prop it next to them while they grade papers. The average Easy Grade session time is 12 minutes. This is huge for an app that uses advertisements. You can debate the ethics of using ads in apps (_David had a great discussion of this on his podcast). At least for now, I think ads are an acceptable revenue stream.

Marco is absolutely right, though. Freemium is hard, and it doesn't work in every situation. I think his execution of the freemium model in Overcast is perfect. It works for my app. But it certainly doesn't make sense for everyone.

Side-note: About a year ago, after seeing Jury's Cingleton talk, I thought it'd be fun to double the price of the In-App Purchase and see what happened. To my delight, I have seen roughly the same number of purchases, thus my IAP revenue has doubled.