Consumers Less Willing to Pay for Content as Free Apps Surge

MacRumors · Jul 18, 2013

According to a new report from mobile analytics firm Flurry, free apps supported by ads and/or in-app purchases are becoming an increasingly popular choice for developers and consumers alike, with 90% of iOS apps now being offered for free. In 2012, that number was just 84%, marking a 6% increase over the past year.

Some might argue that this supports the idea that "content wants to be free". We don't see it quite that way. Instead, we simply see this as the outcome of consumer choice: people want free content more than they want to avoid ads or to have the absolute highest quality content possible.

Flurry also compared the pricing of both Android apps and iPhone and iPad apps, finding that iOS users are generally more willing to pay for content. The average Android app price as of April 2013 was $0.06, while the average iPhone app price was $0.19.

iPad apps have traditionally been more expensive with developers charging a higher premium for more screen real estate, which caused the average iPad app price to be a good deal higher than Android or iPhone apps at $0.50. iPad apps, on average, are priced 2.5 times higher than iPhone apps and eight times higher than Android apps.

Due to the uptick in free apps, Flurry suggests that consumer behavior indicates ad-supported content will continue to surge, and that ads in apps are a "sure thing for the foreseeable future."

Flurry collects its data from the more than 350,000 people that access its Flurry Analytics tools.

Article Link: Consumers Less Willing to Pay for Content as Free Apps Surge

bushido · Jul 18, 2013

my price per app limit is at 3 so im actually above average

call me surprised

nepalisherpa · Jul 18, 2013

Unfortunately, we will see more apps that are ad-supported AND with crazy numbers of in-app purchases. I would rather pay for full app or have apps that are only ad-supported (i.e. no in-app purchases). I think the concept of "in-app purchase" is getting out of hand with many applications.

gmanist1000 · Jul 18, 2013

Apps with Ads - Free
Paid Apps with no Ads - $$

The ads are very non-intrusive on most apps, so I'll take free apps all day!

Klae17 · Jul 18, 2013

Does this mean more in app purchases? That's my least favorite. Great graphic with the coins by the way!

TouchMint.com · Jul 18, 2013

Yea my avg price is $3 but I just released my first free app. I had actually heard the price of paid apps has been trending up so yea I'm surprised too.

donutbagel · Jul 18, 2013

I got Rome: Total War from Steam for $2.60. I sure like the deal, but it's scary. What are they doing, dumping?

ValSalva · Jul 18, 2013

This is just what Apple wants. Free or very cheap apps make buying an iOS device that much more attractive. Unless income can be made via advertising or some other sort of way it kind of stinks for developers.

Trik · Jul 18, 2013

If they aren't counting Freemium then these numbers are skewed for sure. Yes the initial download is free, but you often pay MORE than if you just had a chance to pay in the beginning. Yes it's nice to try an app first, but saying an app is free then offering you $99.99 for a boatload of donuts is kind of bait and switch.

ziggyonice · Jul 18, 2013

I hate this new ecosystem.

Free-to-play (more like pay-to-win) games and subscription based apps... I hate having to shell out money every time I want to continue, or pay yet another bill every month. I honestly wonder if the "free app" world is a bubble getting ready to burst. How long will it be before people realize that most of the free apps out there are just glorified Facebook games making a comeback?

Have you seen Plants vs Zombies 2? Ridiculous:

I'll gladly pay a higher price for a quality application. I want to buy it and be done, not nickeled and dimed. But in the world of DLC, free-to-play, subscriptions, online passes and always-online, I just don't have the interest in purchasing something I can't own and keep forever.

But alas, we are the minority. And they are the sheep.

anewman143 · Jul 18, 2013

Not to be a total dweeb, but it is not a 6% increase. It's 7.1% (6/84*100). You could say the percentage of free apps is 6 percentage points higher, but the increase is 7.1%

I hate myself...math goofs drive me goofy (er)

friedmud · Jul 18, 2013

I don't think the conclusion is correct. Many apps are going to a model where the App itself is "free" but you pay for content within the App. This means that on average more "free" apps will be purchased... but it doesn't mean people are spending less money on Apps.

Look at Real Racing 3... I bought RR1 and RR2... but RR3 is "free" and then you buy stuff in the game with real money. I didn't download it because it was "free" I got it because RR1 and RR2 were good games. If it would have cost money I would have bought it as well.

Personally, I'm not a fan of this model. I prefer to buy something up front instead of getting nickel and dimed... but with how popular this model is becoming it must work...

keysofanxiety · Jul 18, 2013

I may have to disagree on certain points raised. Of course, consumers are always going to go for free options where available. But I don't believe any consumers find in-app purchases to be a good thing.

When I was younger, playing old demos of Jazz Jackrabbit, Tyrian 2000, Descent 2 and countless others, they'd give you a taste of the full game for free. If you liked it, they'd tell you where to purchase it.

I may be oversimplifying a matter here, but if you simply had one app -- the game itself -- that you played, with limited features; and if you liked it enough, you could pay X amount to unlock the full version. I genuinely feel consumers would both benefit and prefer this style.

However as there aren't many apps like that out there, I can only imagine people don't really like that idea. What do you guys think?

kwikdeth · Jul 18, 2013

It just sucks that a good chunk of app developers in my experience make free apps with ads and no buy-in upgrade or paid version without ads. I simply cant stand advertising and more often than not will avoid apps with ads in them.

3282868 · Jul 18, 2013

Buyers have become more weary of purchasing app's that later didn't fulfill their needs and would rather a free app with ads. It's a shame developers cannot offer a trial mode via the App Store, forcing them to offer trial versions on their own site or two versions via the App Store, one free for trial and one paid.

sundog925 · Jul 18, 2013

If people are to cheap to spend .99 cents on a $600+ phone and probably $50/month plan, then why even have the phone?

iChrist · Jul 18, 2013

ValSalva said:
This is just what Apple wants. Free or very cheap apps make buying an iOS device that much more attractive. Unless income can be made via advertising or some other sort of way it kind of stinks for developers.

Exactly. Apple's support of their developers is becoming more and more questionable. As hardware becomes more indistinguishable, Apple should be trying to differentiate themselves with software, "Only on iOS".

Yet... the App Store primarily promotes free crapware with insane $99.99 in-app purchases. They are in a race to the bottom with Android.

Instead, they should promote quality software, that is only on iOS. The App Store has become useless as a means to find quality software. That is why consumers don't even want to pay $0.99, there's a 80% chance the app will suck.

----------

bedifferent said:
Buyers have become more weary of purchasing app's that later didn't fulfill their needs and would rather a free app with ads. It's a shame developers cannot offer a trial mode via the App Store, forcing them to offer trial versions on their own site or two versions via the App Store, one free for trial and one paid.

Agree. But that is the role that In-App purchases attempts to fill.

Unfortunately it is abused to no end.

:apple:

SockRolid · Jul 18, 2013

MacRumors said:
... with 90% of iOS apps now being offered for free.

This, of course, is playing into Apple's hands.
The iTunes Store and App Store are all value-add for Apple hardware.
Lower prices on high quality apps gives greater value-add.

And, as a side-effect, low-priced apps (and free iOS updates) hit Microsoft where it hurts.
Microsoft needs software revenue, but how can they justify high prices any more?

schenz · Jul 18, 2013

I think there are a number of possible fallacies in this report:

-) a smaller percentage (of paid apps sold this year compared to the preceding ones) doesn't mean a smaller number, which is: a lower percentage of a bigger pie can still mean bigger numbers.

-) The number of apps has little to do with the number of downloads. There might be a bigger number of free apps, but this doesn't say anything about their share in downloads. Not every app is equally often downloaded.

-) Finally it would be nice to look at the demographics. If more and more people buy iPhones it might just be that the ecosystem is now attracting people who will not spend any money on apps, too. This doesn't mean that free apps become more popular, it might just say that there are ever more people not willing to pay for apps.

Of course, I don't know. I'm just saying that a statistic can be very misleading if you don't know exactly what it measured.

thepowerofnone · Jul 18, 2013

I'm not sure these guys (either Flurry or Macrumors - one of the two or both) understand statistics very well: they are confusing causality and correlation.

The title "Consumers Less Willing to Pay for Content as Free Apps Surge" implies that there is evidence that consumers are less likely to pay for content but that's not what the research is showing. The research is showing that fewer paid apps are being downloaded, but that doesn't mean that the title is true. Its probably more from a surge in ad-supported and freemium games: Real Racing 3 and Temple Run 2 are both big name games that have gone freemium whereas 24 months ago Real Racing 2 was pricey (but excellent); Infinity Blade 1 and 2 are both excellent, expensive games which were released quite some time ago. These examples aren't exhaustive, but they do show the trend in which developers are moving, and you can only download what the developers choose to offer you. The top grossing apps are all often freemium so clearly people don't mind spending the money, its just more profitable for developers to go freemium.

That and Android's growing market share.

anewman143 · Jul 18, 2013

It's business model that is here to stay - it must be working or the developers wouldn't use it. Think about it - they give you a taste but for more you gotta pay.

That said, we have all gotten seriously selectively cheap. We pay hundreds for our phones, $50 to $50+++ per month for our plans, and we get pissy about spending $2 on a game or app?

Really? For heaven's sakes, we spend more than that on a large fries at McDonald's!

My $0.02 anyway...

nepalisherpa · Jul 18, 2013

ELMNT925 said:
If people are to cheap to spend .99 cents on a $600+ phone and probably $50/month plan, then why even have the phone?

You are not understanding the thread here. Think of it this way. Would you rather have:

A - a car that has everything that you need and pay $15,000 for it?

or

B - a car that just comes with one seat and a steering wheel for free but then you have to pay for headlights, other seats, ac, horn, etc. and after you have paid for additional things that you need, you would have ended up paying more than $15,000?

Don't look at $0.99 as your arguing number. Sure it's a small number but it adds up.

anewman143 · Jul 18, 2013

nepalisherpa said:
You are not understanding the thread here. Think of it this way. Would you rather have:

A - a car that has everything that you need and pay $15,000 for it?

or

B - a car that just comes with one seat and a steering wheel for free but then you have to pay for headlights, other seats, ac, horn, etc. and after you have paid for additional things that you need, you would have ended up paying more than $15,000?

Don't look at $0.99 as your arguing number. Sure it's a small number but it adds up.

How about option C? Don't buy the car from that company! If enough people find this business model so objectionable, don't buy the apps. The market will quickly adjust. But most folks like cheap/free apps - that way they can decide what to pay for. But I understand your point...one $0.99 purchase becomes 2, becomes 3...etc.

This model isn't unique to phones - look at all the DLC for video games...it's crazy! But you don't NEED to buy it...it's up to you to decide value

JackieInCo · Jul 18, 2013

I would rather pay for an app then have it be ad supported or have in app purchases.

I have one app where it originally came out as ad supported but I urged the the developer to offer a paid version just so I can have it without ads. An hour later he contacted me saying that he came up with the ad free version for 99 cents. I bought it instantly.

I will not pay for in app purchases.

3282868 · Jul 18, 2013

ziggyonice said:
But alas, we are the minority. And they are the sheep.

Don't give up, fight the good fight. There are many of us who agree, we need to vote with our dollars and write Apple and developers. If we don't, nothing will change.

Adobe is feeling it with their move to CC subscriptions. Torrent sites are riddled with CC app's, utilizing the same hacks as years before. It won't deter pirating, in fact there's been a rise in pirating with these new business models.

Consumers Less Willing to Pay for Content as Free Apps Surge

macrumors bot

Suspended

macrumors 68020

macrumors 68030

macrumors 65816

macrumors 68000

macrumors 6502a

macrumors 68040

macrumors 6502

macrumors 68020

macrumors regular

macrumors 65816

macrumors G3

macrumors 65816

macrumors 603

macrumors 6502a

macrumors 65816

macrumors 68000

macrumors newbie

macrumors member

macrumors regular

macrumors 68020

macrumors regular

Suspended

macrumors 603

Our Staff