The free and paid app versions model

One popular app monetization strategy is to offer both free and paid versions of your app. Developers can limit certain features in the free app to “encourage” users to upgrade to the paid app. Besides, app developers are able to monetize the free app with in-app advertising.

The benefits of this app monetization strategy are two-fold. On the one hand, it provides a free option for users to experience the app’s basic functionality at no cost. On the other hand, it also provides a growing user base for potential monetization via app upgrades or in-app advertising.

The free app with in-app purchases model

Another popular app monetization strategy is in-app purchases or IAP. The app itself, and usually the basic features of the app, are free. However, if the user would like to advance in the app faster, say get extra lives in a gaming app; or enjoy certain premium features in a dating app, then they enter the pay-to-play model.

In some cases, users can still get access to premium features or functionality without paying. If they are patient enough to wait for certain unlocked features, they can use the app for free indefinitely. In other cases, such options won’t be available. The app developers would only make a certain number of things for free, and others only obtainable through in-app purchases.

The free app with the subscription model

Some developers choose to create free apps with a subscription model. With this strategy, the app is made free to download with limited access to the content or services offered. It requires users to opt into a subscription plan to enjoy the full benefits. This app monetization strategy is commonly seen among service-oriented apps or content-centric apps such as news apps.

With this approach, the app can be easily discovered in the app stores as a free app when users search for related content. This is great to help developers build up an initial user base and cultivate that user base into paid app subscribers.

The paid app model

In some cases, developers will make their apps available only in the paid version. Usually, these apps offer unique value that’s hard to find elsewhere. This app monetization strategy is most common among productivity apps.

Note that the apps you create should provide enough value or unique functionality that meets certain user needs if you go this route. Otherwise, you will have a hard time building up the user base to generate revenue for your app.

The partnership model

If an app is very popular among a certain niche market, companies in that space may approach the app developer for sponsorship opportunities to get their brand in front of your app users.

So when you’re planning about the next app to build, you can also think about the target user base the app may attract and the type of brands that might be interested in that audience. If that user base is large enough, app monetization through brand sponsorship, partnership, or acquisition could be a good choice too.