The History of App Pricing, And Why Most Apps Are Free →
Interesting data from Flurry, but I think their mobile-advertising business is influencing their conclusion a bit too much:
In light of that, it seems that the conversation about whether apps should have ads is largely over. Developers of some specialized apps may be able to monetize through paid downloads, and game apps sometimes generate significant revenue through in-app purchases, but since consumers are unwilling to pay for most apps, and most app developers need to make money somehow, it seems clear that ads in apps are a sure thing for the foreseeable future.
Compared to traditional web-browser ads, mobile-app ads so far have been much more intrusive to users, less effective for advertisers, and less profitable for developers. And despite ads being the norm for both low- and high-quality websites, apps with ads are perceived as profoundly cheap and low-quality.
I don’t think this “conversation” is over at all. If we had to declare a conclusion today, I wouldn’t bet on mobile ads being the clear “winner” over in-app purchase. And it would be a miserable outcome for all three interested parties — users, developers, and advertisers — if ads do end up being the de facto way for apps to make money.