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!
The Loadown was featured in a piece by Alex Konrad that appeared on forbes.com yesterday: ‘How Amazon-Style Pricing And Portfolio Tactics Can Hack The Crowded App Market.’ The article included insights on the role of pricing optimization and portfolio diversification in app discovery.
Here are some highlights:
– … for those who aren’t a Top 10 viral hit or willing to spend millions on marketing like Game Of War’s pricey Kate Upton campaign, regular price adjustments can help surface an app back from the purgatory of the App Store’s (figurative) back shelves.
– The most room to maneuver and benefit comes with apps that are priced more than $0.99 and thus have more potential to discount or boost prices incrementally. But even switching apps from periods of free sales to paid stretches can improve performance, the Loadown team says.
– In a 39-week study of about 7,6000 apps from 4,000 sellers, sellers expanding into a new category instead of launching their first app saw a 15% bump on top-grossing charts for each additional category they entered. (study by Arizona State University’s W.P. Carey School of Business)
For more information about our dynamic app pricing optimization service, to start a free pilot for your apps and get significant increases in both downloads and revenue, contact us at firstname.lastname@example.org.
We have a new white paper, “Using Version Updates and Price Changes to Improve Mobile App Discovery”, available on theloadown.com. According to US market data we collected in 2013, iOS app publishers and developers making version updates and price changes improve their positioning on iTunes’ Top Paid, Top Free and Top Grossing lists.
This is because when a paid or free app is updated to a new version, the developer can change the name, icon, description, screenshots and keywords of the app as well as force users to notice the new update. For price changes, sales get featured on an Apple RSS feed that is distributed to thousands of sites and twitter feeds focused on promoting apps that have gone on sale or have recently become free.
The Loadown’s data (see graph) indicates that free apps making version changes increased the number of days they were ranked by an average of 45% in Apple’s Top Free list and 73% in Top Grossing (19 more days), compared to apps that never updated their versions. In terms of rank, these free apps improved by about 17% in Top Paid and 21% in Top Grossing (45 rank positions).
Similarly, compared to apps that never changed their prices and never updated their versions, paid apps that did had an average increase of 36% in the number of days they were ranked in Top Paid and 96% in Top Grossing (22 more days) along with a 23% improvement in their Top Paid rank and 21% in Top Grossing (50 rank positions).
This data provides supporting evidence that active involvement by apps in their positioning on Apple’s App Store through version updates and price changes significantly improves their discoverability, downloads and sales.