Behind the scenes in the mobile app subscription store

Picking up from Monday in discussing aspects of Opera’s Mobile App Subscription Store, it is appropriate to delve into its value for developers of premium mobile apps. Why is this something you would want to get into? How can it really improve your revenue vs. single copy sales?  You can talk to a member of our support team if you already know Opera’s Mobile Subscription Store is something you want to investigate further.

Behind the scenes – Mobile Carriers as “Mobile App Retailers”

If you were to visit any traditional brick-n-mortar business, you would see that there is a lot going on behind the storefront, itself. For large supermarkets like Walmart, you will find many large warehouses, lots of people receiving and stocking products. You will find a fleet of trucks delivering pallets of goods to each store. There are all manner of other costs involved – costs of the buildings, the fuel, the insurance, etc.

In the mobile world, the closest things to brick-n-mortar businesses are the mobile carriers themselves. They have the license to operate in a particular country or region; they have the towers; arrangements with local mobile phone dealers to sell phone cards or arrange long-term subscription plans; plus their own marketing and advertising personnel and budgets. These are multi-million, sometimes multi-billion dollar businesses in their own right.

Payment methods

There are two major obstacles to overcome as relates to international sales 1) affordability, does the customer have enough money to buy your product?, and 2) payment method, is the customer able to pay in an acceptable format?

The majority of the world, outside of Europe and North America, do not have credit cards or Paypal accounts. Does that mean they don’t have money? Does that mean they don’t buy stuff? No, it just means there is a gap between their ability to pay and your ability to collect payment.

The Subscription format resolves the first. Opera Mobile Store’s expertise along with the in-market specialization of each Mobile Carrier identifies the “happy point” at which customers are willing to pay for mobile apps. This completely offsets the need for developers to apply to price segmentation or concerns that someone from Europe might pick up what you are offering in Southeast Asia on a bargain basis. Most large scale businesses do apply to price segmentation because the Purchasing Power of a Dollar in Ukraine, India or Brazil is not the same as in the United States, Italy or Japan.

Mobile billing takes care of the second. Customers are able to buy time for their mobile phones. That “time” basically is money. The mobile carrier collects payments on behalf of the customer and processes those funds to Opera Mobile Store in a format that can be paid to you – the developer.

Economy of Scale

Together, between the 1) logistics, 2) financial systems, and 3) market penetration, working with Mobile Carriers in the sale and distribution of premium apps makes it much easier to achieve Economy of Scale, per Wikipedia

In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Enterprises.  Do you think of your mobile app development company as an enterprise?  If not, maybe you should – as if you produce quality apps worthy of a premium price tag, the subscription store can help really give your efforts the kind of boost they deserve!

Low Revenue per Unit vs. Offset of Your Advertising Costs

The only downside to the subscription store sales model is that you, as the developer, will make less per individual copy than a traditional premium app sale. At the same time, however, you are paying ZERO ADVERTISING unless you choose to supplement the Mobile Carrier’s marketing and advertising efforts with your own.

This is not a guarantee that your app will be heavily promoted by the mobile carrier, only that if your app is in their mobile app catalog that it will be available to all of that carrier’s mobile subscribers. The mobile carrier is also seeking to maximize their revenue. That means that your place in the catalog will go through a number of rotations, relative to the time that your app is in the catalog, and where with reasonable notice, you can withdraw your app from it.

These points are worthy of much, much deeper discussion as they also figure into the structure of your marketing strategy. During the initial release of your app, you may not have a large advertising budget. So, what better way is there to get free advertising and substantially boost your short-term revenue to boost your own marketing and advertising budget?

Let’s talk about your app!

Another factor that deserves note is the simple ability for you to be able to say that your app is available through “Big Company Name/s.” This can be very useful for start-ups and independent developers, alike.

Historically, getting products accepted by a large-scale retailer is a lengthy, expensive process. Under Opera’s Mobile App Subscription Store – the process is free, and relatively fast. With it, you can go from single copy sales to a mass distribution environment.

Contact our support team now to begin the process of getting your app seen by millions of mobile subscribers in promising mobile app markets.

Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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