Freemium applications, those that can be downloaded and installed for free but which then require purchases to unlock their full potential, get a bad rap. One that I feel they don’t deserve. In this post I will endeavour to explain why, whilst also providing a few ideas on how to implement In-App Purchases or the Freemium business model in your applications.
Why does freemium have a bad reputation?
In the early days of In-App Purchases (IAPs) and the freemium business model, some developers and companies took things a bit too far. Many games were built around the idea of starting you off free and easy, but quickly escalating in difficulty or time between actions so that you would be forced to spend money to complete levels or finish the game before you expired. Some of these games cost thousands of dollars to complete, or would take a decade or more of casual play to finish.
These “Free to play, pay to complete” games gave IAPs a bad reputation, filling the news with horror stories of children spending thousands of dollars on their parents’ credit cards, just so that they could get to the next level or build a new building in their Smurf village.
In short, the few ruined it for the many.
Freemium is a good thing
Some early developers and studios may have damaged the reputation of freemium and the use of In-App Purchases, but I believe they are still a good thing - if used correctly. Below are three methods that can be used by applications - in varying ways - to start off free and make revenue as the application is used.
None of these models are, in themselves, bad. All of them require, just like any piece of marketing or product decision, some thought. So, let’s take a look.
The Patronage Model
For some, the “Patronage Model” will be a viable business model for their application. This works by distributing the application for free, but then asking users to donate an amount through the use of an In-App Purchase. Sometimes this is dressed as supporting the application and sometimes it is dressed as buying the developer a coffee as a thank you or their hard work. Either way, it’s a direct payment from an app consumer to the app creator (through Apple’s IAP service).
Truly best use of in-app purchases I've seen. Insta-bought (I hardly ever do) (Psychology is remarkable, isn't it?) pic.twitter.com/pNG2TccLGL— Dan (@OhMDee) October 22, 2015
This model works for applications that have an enthusiastic or large user base. Or where the developer has built up social credit and respect within the community.
Pay for Premium Features or Customisation
We don’t all use every feature an application provides. For example, some may only want the pencil tool from a drawing application, whilst others may require more “pro” or “premium” features. Whilst I would use a drawing app just for scribbling, and would be happy with that, my friend Baker2D would require a lot more from it — such as different pens and brushes, a vast array of colours, and the ability to export as a vector.
Some applications have built their business model on this. They provide a basic set of features to all users, whilst allowing those who need more advanced or granular tools to pay to access them. By doing this, they’re able to distribute their application to a large number of people, whilst letting those who want to or can pay to finance the development and marketing of the application.
Some games have started to use this model for customisation. Shooty Skies, a recent vertical shooter from the team behind Crossy Road, is totally free to play. You can play as many times as you like for as long as you like, without ever paying a penny. But, if you’d like to purchase a specific special character, because you like the way they look, you can pay a nominal fee (£0.79 in the UK) to unlock that character. When you purchase, you sometimes get some free in-game coins to spend in the claw machine to unlock further characters.
Pay to Expedite
Despite the stigma around games demanding your money, many games still use In-App Purchases and the freemium model as their way of making money. This has led to success for companies like King.com (a client of mine), who are able to make a decent business from their suite of gaming apps. The key here is, and always has been for sustainability, balance.
All of King.com’s games can be completed without spending any money. I know a few people who have done so. But, if you’re stuck on a level or would like to get through more quickly, you can pay to unlock boosters to help you progress. It’s the old adage of “time is money” made literal. You can spend more time and progress through the game for free, or you can spend money and progress more quickly.
As I’ve said above, freemium and IAP aren’t inherently bad. If used correctly and respectively, they’re a good way to strike a balance between the money developers and designers need to make to continue creating great applications, and the price that a lot of people want to pay for an application - nothing.
By appealing to your customer’s kind nature, offering them added value when they need it, or helping them when they’re short of time, you’re able to create a great application that can be used by all, enjoyed by many, and is potentially profitable for you and your business.
What are your thoughts on this subject? Do you have any examples of applications where this has worked particularly well or has failed stupendously? Let me know! I’m @Smutchings on Twitter.