Last month we looked at the breakdown between free and paid apps at the end of the first half of 2015. This time we wanted to dig further into the data and see how the numbers have changed since 2014.
First off, It’s clear that free apps are doing great. They make up a higher proportion of all apps and of the new apps that come out every month. But, when we analyzed this number of new free and paid apps a bit deeper, we were in for a surprise.
Between March and June 2014, there was a dramatic decline in monthly new paid apps but only a slight decline in monthly new free apps. The graph below shows the number of new free and paid apps across all genres that were added to the iOS appstore each month. On average, about 38,000 new free apps and 8,000 new paid apps were added per month. But, the number of new free apps decreased at a rate of about 900 apps per month while the number of new paid apps decreased at a rate of about 2,900 apps per month, making the rate of the new paid app decline more than 3x the rate of the new free app decline.
For the same period in 2015, there seems to have been a complete reversal: the decline in new paid apps slowed, whereas the decline in new free apps became more aggressive. The graph below shows that about 52,000 free apps and 7,000 paid apps were added on a monthly basis. But as opposed to 2014, the number of new free apps decreased at a rate of about 3,300 apps per month and the number of monthly new paid apps decreased at a rate of about 1,000 apps per month, making the rate of the new paid app decline less than 1/3 the rate of the new free app decline.
Though this analysis only takes into account what happened in a four-month period during the first half of 2014 and 2015, we can see that the aggressive decline in new paid iOS apps of last year leveled earlier this year while the decline in new free apps is now significantly stronger than it was in 2014. Does this mean that the trend of abandoning the paid app model in favor of free and freemium apps is slowing down? It sure looks like it, but to be certain we will need to continue investigating throughout 2015! Stay tuned for more!
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!