This week, the team at The Loadown has been investigating more about the ins and outs of iOS iPhone apps. We are constantly searching for data to teach us about the behavior of the appstore, and the differences and similarities between paid and free (including freemium) apps. Previously, we’ve talked about the split between paid and free apps across genres, but we wanted to get more specific.
This week’s burning question: Which apps get rated more and/or better: free or paid?
Overall, free apps had approximately 2.5 times more ratings across all genres (average of 146 ratings/app) compared to paid apps (average of 57 ratings/app). This makes sense given that at the price point of $0 their are significantly more users of free apps compared to paid apps, which would lead to significantly more ratings for the popular free apps. Enough ratings to increase the average rating per free app.
Games, Social Networking and Weather were the genres that received the highest average number of ratings per paid or free app. For example, a typical paid game had 241 ratings while its free counterpart had 408 ratings. Compare this to Education, the genre claiming the lowest average number of ratings, with its 12 ratings per paid app and 31 ratings per free app. Across the App Store, only the Business and News Genres had more average ratings per paid app vs free app.
So it’s clear: free apps typically get more ratings than paid apps.
However…Are free apps more likely to get rated than paid apps? To answer this question, instead of average number of ratings per app, we looked at the number of apps with a particular rating per genre (example: ) relative to the total number of paid and free apps (see graph below). We grouped apps in 3 categories based on how they were rated: low (1 and 2 stars), medium (3 stars), and high (4 and 5 stars).
From our data we can see that while 18% of all free apps actually get rated, 25% of all paid apps get rated. Another way to say this is that paid apps have a 40% higher likelihood of getting rated compared to free apps. Users that pay for an app are clearly more inclined to rate their purchase compared to those not paying for an app. There were two notable exceptions: Games and Books. For Games, this makes sense, since some of the most popular and best rated apps are free games. Books, on the other hand, is one of the smaller genres, but the only one where paid apps outnumber free apps. This particularity might account for better ratings for free apps.
The question that remains, therefore, is whether paid apps get higher ratings than free apps.
By looking at the number of apps with a high (4 and 5 stars) rating per genre relative to the total number of paid and free apps (see above graph) we find that about 10% of all paid apps are highly rated compared to approximately 9% of free apps. Paid apps are therefore more likely to be rated with 4 or 5 start than free apps. Of the 22 active genres, Business, Food & Drink and Music more highly favor paid apps in this area, while Games, Photo & Video and Books more highly favor free apps.
Conclusion…Given the $0 price tag of a free app, it is normal that free apps have more ratings on average than paid apps. But, the deeper trend that we discovered through this analysis was that, while free apps were rated more on average, paid apps were more likely to be rated and were more likely to be rated better. So for all you developers and marketers trying to figure out what business model to adopt for your app, take a second look at charging for it. If the value is there (with your app) and you are not ready to put some resources in creating a successful in-app purchase funnel, which requires providing tons of free value up-front and fine-tuning conversions ad-nauseum, then a paid app may be best for you.
Stay tuned for more wisdom from The Loadown as we answer more burning questions about mobile apps!
This week, we started digging to answer a burning question: What is the split between paid and free (including freemium) iPhone apps for every genre in the iOS appstore?
We did a detailed analysis between free and paid apps at the end of the first half of 2015 (see graph above), and found some interesting results:
- Of all the apps active during this period 27% were paid.
- The Business genre had the highest ratio of free to paid apps; out of 179,352 apps, 94% were free and 6% were paid.
- The genre with the most number of apps was Games, with a total of 362,487 apps, of which 72% were free and 28% were paid.
- Of all the genres, Books had the highest ratio of paid to free apps; out of 65,484 apps, 57% were paid and 43% were free.
In the coming weeks, we will be investigating further to see how apps within each genre behaved from month to month, or even week to week. Stay tuned for more from The Loadown!
In our quest to better understand App Store dynamics, especially when it pertains to paid apps vs free apps, we decided to analyze how much app turnover there was in Apple’s iPhone and iPad Top 400 lists (now Top 200 lists). We looked at how many apps entered (and thus exited) the Top 400 Free, Paid and Grossing lists (by category) throughout the month of May 2014. These entries/exits are important because, as they increase, they provide an indication of which business model (i.e. paid or free) or genre/category offers the best opportunity for discovery.
The two graphs below show, for May 2014, the number of iPhone and iPad apps that entered the Top 400 Free, Paid and Grossing ranks but that had not been ranked the previous day. For both iPhone and iPad apps, generally more than three quarters of Top 400 Paid and Top 400 Grossing apps remained ranked from one day to the next. For iPhone apps, the daily turnover in the Top 400 Paid list and in the Top 400 Grossing list (for both paid and free apps) was more than double that of the Top 400 Free list. For iPad apps it was nearly double, with free apps having an average of 51 new entrants a day in the Top 400 Free compared to an average of 35 new entrants a day for iPhone apps, a 46% difference.
Does this mean that a Paid app has a better chance of getting ranked and potentially getting discovered? About 1 out of every 8 apps is a paid app and therefore it is clearly easier for a paid app to get ranked. But the fact that there is more active turnover in the Top 400 for paid apps (and for paid or free Top Grossing apps) makes the competition for Top Paid and Grossing ranks far more open than for Top Free ranks.
We still believe that #PaidAppsRule
In this post, we analyze 2 closely followed companies and note various information that can be gleaned from The Loadown’s data on each of them. This shows ways analysts can effectively use this information in helping support a position around a particular company and the predictive nature of the information.
Candy Crush Saga
With the recent King.com IPO, many analysts have had their eyes on the company’s apps, trying to monitor their performance. The Loadown tracks all King.com apps daily (across all countries), and below is only data on the iPhone app in the US.
In the above chart, we are looking at the daily download estimates for the period (from January 1, 2014 – present) respectively.
Though the app’s user continue to rise, daily downloads have decreased fairly dramatically to level off recently (since the beginning of 2014) at approximately 2.5 times less than end of 2013 ranges.
These findings tie in with the recent quarterly earnings announcement from King.com (May 7, 2014), where the following was reported and concluded:
- Candy Crush Saga accounting for 67% of total first quarter 2014 gross bookings, down from 78% in the fourth quarter of 2013 (Source: King.com earnings release)
- Investors were […] worried about the company’s growth. Revenue in Q4 was down from its Q3 revenue. This quarter, as we noted, revenue is up sequentially, but it’s still not as high as it was in Q3. (Source: Business Insider)
- Up premarket after posting a Q1 EPS beat and moderate Q/Q bookings growth, King Digital (KING -8.7%) has sharply reversed course. Concerns about softening Candy Crush Saga bookings and a Q/Q drop in monthly unique payers appear to be the triggers. (Source: Seeking Alpha)
Though it should be emphasized that daily downloads are only one piece of an overall company strategy and analysis, The Loadown’s download estimates show clear evidence early into the last quarter the pattern for reduced user growth on the iOS platform. (This may in part be attributed to a reduction in the company’s large paid acquisition strategy that it used around the IPO timeframe).
This daily downloads data can have important predictive value and could be an early alert to start monitoring other strategies and indicators of the company, as new users are not being added as the same level as before.
What can that imply further for user growth, usage patterns, and company performance in general going forward into the quarter and beyond?
Twitter, another recent IPO and closely followed company, also has interesting app download behavior. The Loadown follows the Twitter app (and all other 3rd party Twitter apps). Below is data on the iPhone app in the US.
In the above chart, we again look at the daily download estimates for the period (from January 1, 2014 – present) respectively.
The daily download shows a very steady pattern of user acquisition. Outside of a small spike in downloads around the time of the last earnings report (which may have been attributed to publicity around the event), the trend line for the period is pretty much flat. Therefore, the pattern shows that the user base acquisition (through the Twitter app) is not increasing beyond previous levels.
Analysts and the press has been very consistent and laser focused on Twitter’s ability to expand its user base, which was supposed to be the basis for its growth:
- Twitter Inc. (NYSE:TWTR) likely failed to accelerate user growth in the first quarter despite major investments aimed at making the social network more attractive to new users in the U.S. and abroad, according to analysts looking ahead to Tuesday’s first-quarter earnings report. (Source: International Business Times)
- Shares in Twitter dropped 9 per cent in after market trading when the messaging platform failed to reverse a trend of slow user growth, shaking investor confidence that it could ever grow to the size of Facebook. (Source: Financial Times)
- Twitter (TWTR) may have captivated millions of insiders in the twin realms of technology and media, but its most persistent challenge can be easily characterized in less than 140 characters: “Grow the user base faster and enlist more engaged, mainstream users i.e. #BeMorelikeFacebook.” (Source: Bloomberg Businessweek)
The Loadown’s download data for Twitter shows a predictive trend that ultimately became an important issue during the current earnings quarter for the company. By monitoring app download estimates daily through The Loadown data, it becomes clear that no significant uptick was seen, when one was expected for the company. Analysts could relatively early on in the quarter begin to focus on this emerging pattern to support the prediction that Twitter user expansion could fall below expectations.
It is also interesting to note that additional analysis could be done by studying the 3rd party Twitter apps’ download patterns for this period, further providing predictive clarity around company performance.
As of today, you can sign up to our Beta directly theloadown.com/user/signup and start receiving daily updates on your mobile app competitors’ prices, versions, ranks and more…!
Check it out, it’s FREE!!!
We have been aggregating publicly available information daily for each app in iOS’s USA storefront and use our own algorithms to estimate an app’s downloads. These can be seen on any app page (search for any iOS app at theloadown.com). Today we are releasing our estimated downloads data for 3 other storefronts: UK, Japan and France.
Based on our comparative analysis with real download data, we have good directional and trend estimated download data for both paid and free apps. With regards to total estimated downloads we have been getting relatively good values on paid apps, but could still be quite a bit off for many free apps.
Please remember that these estimates are for informational purposes only.
According to new market data we released, 21% of all apps currently in Apple iTunes are priced at $0.99 while 58% are free to download. We also found that in April 2013, iOS apps in Education, Entertainment, Games, Lifestyle, and Utilities genres represented nearly 57% of new apps launched.
Our US market update highlights the variation in price distribution among the 23 primary thematic categories in iOS (See Graph 1: iOS Mobile App Pricing by Genre as of April 2013).
Most categories have a majority of free apps with some having very little paid apps, such as Newsstand with only 3% paid apps. There are notable exceptions to this bias including:
- Book genre with 73% paid apps and an average price of $3.53
- Reference genre with 58% paid apps and an average price of $2.65
- Education genre with 58% paid apps and an average price of $2.44
- Games genre with 34% of apps priced at $0.99, 51% paid apps and an average price of $1.08
Another finding from our market data highlights the continued vibrancy of the iOS mobile app marketplace. In April 2013, Games led all genres with over 16k new apps (See Graph 2: New iOS Mobile Apps Launched by Genre in April 2013). This represents nearly 22% of all new apps launched last month.