A new report out by IHS Screen Digest suggests that freemium is quickly becoming the dominant monetization model of the mobile ecosystem. It also says the in-app purchases that fuel the freemium model will climb from 39% of all app revenue in 2011 to 64% by 2015.
“Smartphone users overwhelmingly prefer free apps to paid apps, as we estimate 96 per cent of all smartphone apps were downloaded for free in 2011,” said Jack Kent, senior analyst with IHS. “In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content. Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.”
While you may think of in-app content as relating only to games, there are a number of other examples. The app Doubletwist has a $3.99 add-on that gives you an equalizer and the ability to download album covers. Other apps, like navigation apps, have extra maps which cost money.
We here at GetJar have long been vocal proponents of the freemium model and have been predicting its success for some time, so this news comes as no surprise to us. What do you think? Do you use the freemium model? Let us know in the comments!