If everyone is thinking alike, then somebody isn’t thinking. — George S. Patton
This sort of goes against the grain, but for some developers with high quality apps, it is worth considering. Where over 90% of mobile apps are free downloads, going premium inherently makes it slightly easier to stand out.
It may be a hard call to make, but the following points should help simplify your decision.
Does your app compete with the best similar free apps out there? Now, to look at a number of MMO’s on the market that are ostensibly “free to play” – ten years ago, many would have qualified (and many were) subscription based games. Many of these games have gotten better over time, too. Likewise, many were and still are very similar in nature to Blizzard’s World of Warcraft which remains subscription based.
User engagement and surveys. If you’ve already produced a successful app, by way of number of users, their feedback, and longevity, you’ll have a better sense of whether your upcoming app can hold its own as a premium app. This is worth conducting a survey over. Offer 100 free beta trials and see what your end users think with a survey. There are numerous free online survey sites like SurveyMonkey.com.
Always remember, it is a thousand times easier to start with a high price and lower it than it is the other way around. That is not to say that you can’t temporarily or periodically offer specials. It does not prevent you from taking something that was free and trying to sell it for $10, there are instances where that can work. But you can start your new app out as a premium and later change it to free quite easily.
What will you need to breakeven? What kind of profit are you aiming for? We discussed this previously; suffice that you need to define your breakeven point. If you are looking to depend upon your app as your livelihood, you need to include the costs of your labor, at least in relation to your real cost of living. This obviously applies if you have any employees or partners. The difference between free with in app advertising and/or in app purchases vs. premium (with or without additional in app purchases) is quite significant especially when it comes to pay cycles.
The big advantage with a premium app is that you receive your money faster than waiting for your in app CPM or in app sales to take effect. This enables you to invest that much more into promoting your app faster. Your interest is to reduce the time it takes for you to be paid and initiate a new round of advertising.
Going premium means you will need to forgo most of any in app advertising revenue you might otherwise expect. Most, but not all. It does not preclude you from having a dedicated sponsor or your customer emails where you can offer special promotions offered by other companies wherein you can earn commissions. Again though, you can start out premium and switch to freemium (with in app advertising) later.
Simply though, with marketing you don’t always have to do what everyone else is doing. If you are confident about your app, have good beta user feedback, and have a good marketing sense but lack an advertising budget to match – you may be better off not doing what everyone else is doing.
Supply and demand, especially where supply exceeds demand as it does in the mobile app arena (i.e. over 90% of mobile apps available for free), requires creativity and distinction.