How Do Free Apps Make Money?

Sure, it may seem like an oxymoron, but some of the highest earning apps on the mobile market today are free for the users to download! According to Tom’s Guide, some of the top downloaded, free apps include, Prisma, Face tune, Dropbox, AccuWeather, and more. common question people have when they are new to app development is how they design their free app to make money.

If you are looking to make the next top app, take a look at the list below! We have gathered 5 of the top reasons how apps can make money without charging the customer to download.

1. In-App Purchases
   • An app that uses in-app purchases is simple. The app is offered to customers as a free downloaded version. This version of the app includes additional, optional, paid features. In-app purchases are most often found in gaming apps where users are encouraged to purchase new levels, swag, and helpful items. Gaming apps with in-app purchase are some of the most profitable since these items that are purchased are consumable. Some popular games that have in app purchases are Candy Crush Saga and Fallout Shelter.
2. Selling merchandise
   • Some of the top grossing games around don’t make a lot of their money from the app itself. Take Angry Birds the game for instance. While the game is free for people to download, they have been targeting every market with merchandise. Products from pillows and blankets to backpacks and folders can be found with the little red and yellow birds on it. When it comes to making a profit, merchandise can bring home a nice payday.
3. Advertisements
   • One of the most common and frequently seen ways to make money in an app is through advertisements and sponsorship. Have you ever used an app only to have a scrolling bar in the bottom advertise to you, or in order to get to a new level or use a new tool in the app you have to watch a short video? This is how these apps are making any money! I you can find everything from fortune 500 companies to local businesses on app advertisements.
4. Subscriptions
   • A simple and common way to make money on free apps is to offer subscriptions. While the basic app may be free to download, users must pay for a monthly subscription to make the most use out of the app. Similar to buying a newspaper or magazine subscription, a monthly or yearly fee is paid to get “premium” features.
5. Sponsorship
   • Sponsors are another fabulous way to make revenue! Similar to business investors, sponsorship’s may let you use there company name as an umbrella or they might just back you the cash to design and promote your great new app. No matter the case if you have a sponsor, you can get them to the market the app for you: It’s a win-win for everyone!