Freemium is a model of monetization that combines high possible revenues and no payment barrier between the user and the application. Free apps actually can make more money than paid ones. As long as an iOS app is free, interested people will have more motivation to try it. And if they like this application, they might have the further motivation to get premium features, additional content, in-game items, and whatever is hidden behind the veil of what’s called an in-app purchase. Many software owners use it as the main way of monetizing, and not without a reason: on average in-app purchases account for more than 70% of revenues that software owners get from their products.
In-app purchases is the only way of selling digital content, officially approved in Apple’s guidelines. Apple receives 30% of all revenues gained from in-app purchases conducted through apps. If your strategy presupposes the use of this tool, what other basic things should you know for a good start? Let’s take a look.
What can you offer through in-app purchases?
1. Functionality and services (premium features, additional game levels, etc.);
2. Digital content (books and magazines, additional packs of filters in photo apps, etc.). Please note that you cannot sell any physical items through in-app purchases;
3. In-game items (usually consumable).
What are the types of in-app purchases?
Consumable purchases can be used just once, and can be bought as many times as a users wants.
An example can be the aforementioned in-game items, which actually make up the majority of profits from the popular freemium mobile games.
Something is bought once, and, unlike consumables, it can be restored after a re-installation of the app, or its installation on another iOS device under the same Apple ID.
For example, it can be an unlocked ‘Pro’ version with additional features or content, or a versions with ads removed.
Usually this means monthly (or any other limited duration) access to digital content or services, such as additional cloud storage. When a subscription expires, it can either be automatically renewing, purchased just once until a user unsubscribes, or non-renewing, which can be purchased more than once.
Plan your monetization beforehand and choose what suits best for your future product. Apple’s IAP guidelines will help you better understand the subtleties of their use, and your own responsibilities as the owner of the future software. The rest is up to your developers who will consult you on further questions in case of need.
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