App business models
BLN Money in Mobile
Ilja Laurs, London, June 2011
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Dominant app business models
Other
Virtual
goods
2012: $17.5b
Paid
Virtual
Goods
Other
Ads
Paid
2009: $4.1b
Source: Sizing up the global mobile apps market / Chetan Sharma 2010
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Ads
Utility
The “US” model
Virtual goods /
subscription
Paid
high utility
low stickiness
moderate user value
1 2
4 3
low/no user value
high utility
high stickiness
high user value
Ads
low utility
high stickiness
moderate user value
Stickiness
Source: Sizing up the global mobile apps market / Chetan Sharma 2010
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Difficult
and/or
low payout
Easy
Billing
and/or
high payout
Billing conversion
Paid, Virtual goods, Subscription
billing is easy /
payouts are high
Ads
billing is difficult /
payouts are low
Source: Sizing up the global mobile apps market / Chetan Sharma 2010
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Marketability
Free, Freemium
Scale
(Ads, Virtual goods)
Paid
Marketing
Source: Sizing up the global mobile apps market / Chetan Sharma 2010
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Maximize overall revenue
• Revenue = ƒ(Scale, User Value)
try to maximize user value and scale
• Scale = ƒ (Marketing, Marketability)
maximize user value to increase marketing, choose the
right business model to maximize marketability
• User Value = ƒ(Stickiness, Utility, Billing conversion)
work on the product to maximize stickiness and utility to
maximize user value
Source: Sizing up the global mobile apps market / Chetan Sharma 2010
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