How Did Apps Become So Rich When I Am Using Them For Free?

Free? Not really. Look at some of the unconventional, hidden ways your favorite apps and games make money. These revenue streams might even help you if you have your own blog or online business and want to monetize it.

1. The Freemium Model : This is similar to the Premium Pass at amusement parks or the V.I.P. pass at concerts. People who buy these are entitled to perks regular ticket holders don’t get.

There are 4 types under the freemium model:

#1. Classic Feature Limited Freemium: This has two versions for users: A free version with basic features and a paid version for people who want to access its exclusive features.

Example: Skype. Everyone can use Skype’s video calling feature for free, but if you want its premium features like no ads, group screen sharing, unlimited free calls to landlines and mobile phones then you need to pay for it.

#2. In-App purchases:S4RwTGx-Imgur 

This is basically a free game/app that everyone can use. But they come with an ‘in-app store’ where you can buy lives, power ups, weapons etc. Buying items from these stores are called as in-app purchases.

Example: Candy Crush. Once you get used to an app/game you feel so loyal to it that you wouldn’t mind spending on their in-app purchases. At that moment it may seem like you are only spending a few bucks but people have spent over $ 200 only on candy crush and that’s just one person imagine that multiplied into the crazy fan following that candy crush enjoys.

#3. Free Trial Period: Before buying a car you’re allowed to take a test drive, in this model too you can test drive the app/game before actually purchasing it.

Example: Netflix & Hotstar. These are free for a month and then if you like it you can subscribe to their plans.

#4. Ads and Sponsored Content: These are just like any other ad you see on billboards or on T.V., the only difference here is that these ads are online.

Example: Facebook. Was your Facebook page spammed with ads of a bag you purchased off Jabong? After having a conversation about a particular dress on Whatsapp did you see the dress all over your Facebook page? However creepy that may sound, that’s just how Facebook makes money. Facebook shows you ads based on the data it has about you. Other social networking apps and websites also make use of this method to make money.

2. Sponsorship Model: If an app or website indirectly helps someone specially the government then they will get sponsored by an institution/organization/individual.

Example: Khan Academy, a non-profit educational app is sponsored by the government because of how resourceful it is.

Selling it to a venture capitalist or a big giant funny-picture-facebook-whatsapp-funny-comics

When an app finds it difficult to make money, their only way out is to sell the app.

Example: Whatsapp is a free service and that’s why we love it. So making money through advertisements was a big NO NO from their side. In spite of it being so popular it was making a loss meanwhile Facebook was losing its mojo. So Facebook decided to buy Whatsapp for $19 billion! Similarly, many free apps, websites and blogs eventually have to sell their service to someone simply because they can no longer afford it.

Rumour has it: Facebook wanted to buy Snapchat for $3 Billion and Snapchat said:

Not Going to Happen.gif

3. Affiliate Model: In this model two blogs/websites/app share content across each others platforms to benefit from their respective followers. It works like this, if your friend posts your picture on her wall and you post hers on yours she will get likes from your friends and you from hers. Similarly if a brand posts their information on your blog and get sales through your blog, you will get a percentage of that sale. A lot of blogs follow this method.

Example: Buzzfeed & Cosmopolitan makes use of this model.

4. Selling Data:  A lot of times you are asked to enter your email address, social media handles and other contact info.  Apps and website users sell this data to make money. However this isn’t a very common or ethical way of making money. It could be an invasion of privacy.

These were few unique ways  apps and websites make money. People are constantly innovating and coming up with new ideas to monetize a service. If you have a blog/website/app that is free for users, share your story and tell us how you make money.

 


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