Why Are Most Mobile Apps Free?
Why are most mobile apps free or priced extremely low? With thousands of apps added to the mix each month and billions of apps downloaded each year, that is a good question. Based on numbers alone you would expect some diversity with developers opting to try various price points like people do in retail in an attempt to generate maximum profit.
Yet that doesn’t seem to happen.
So what is the cause of this phenomenon?
People are cheap
In general most people are willing to put up with what is considered minor inconveniences rather than pay for something. Of course, that is a general assumption. Certain demographics such as kids, teens and young adults of the current generation seem to have less of an appreciation for the value of money and by in large are more willing to part with funds with less of a thought.
Of course those demographics aren’t always using funds of their own so they are not the most reliable in terms of markets.
There have been a multitude of studies done that have shown that this frugal consciousness is front and center for app purchases for most adults 18 and over. One recent study in the U.S. showed that 60% of people preferred free apps with ads over paid apps. Within that same survey almost 50% of the people said they would not even download an app if they had to pay.
Now to be fair, that is a rather general survey that did not delve deeply into the demographics involved, however it still shows that the general preference is for free rather than paid.
Let’s look at another statistical category – actual downloads. Based on a statistical review of downloaded apps from the Google Play store broken down from free up to $10+ can you guess which category predominately had the lowest number of sub 500 total downloads and greatest number of over 50,000 downloads?
If you guessed the free apps then you are correct.
Now to be fair, the numbers are skewed for the simple fact that there are more free apps than every other type, but you can still see trends. About 50% of all free apps downloaded were downloaded less than 500 times. At other price points, from less than $1, $1 to $2.5, $2.5 to $5, $5 to $10, and over $10 the next closest category is $2 to $5 apps at 81%.
About 8% of all the free apps are downloaded over 50,000 times. At every other price point only 1-2% apps were downloaded over 50,000. What this shows us is that hit apps predominately are free.
The bottom line
The bottom line is that people simply do not feel the need to pay for apps. With the thousands of available apps out there, users almost always will have a few free options compared to a paid option when they search the store. Given that, and how used to in-app ads we have become, it makes sense why the free option is so desirable.
Unlike some retail businesses, it’s not like you can return the app if it doesn’t perform like you want or expect. Since there are so many apps out there and a large percentage of users have tried apps that they either didn’t use long term or didn’t like, it makes a lot of sense.
If you feel that you need to utilize a cost-model, the Freemium model is your best bet. That way a user gets a basic, usable version of the app for free with the payment coming for a more advanced version later. This allows a developer to hook a user and demonstrate how well an app works and the value they will get from it.
Otherwise, given a choice the reason why most mobile apps are free is because users simply aren’t in a mood to pay for the cow when they can get the milk for free from somewhere else especially if you aren’t sure how good the milk is.