I'd say the barrier to entry for other startups would be the awareness and userbase that Tapzilla may manage to develop. For instance if Tapzilla can say to a

I'd say the barrier to entry for other startups would be the awareness and userbase that Tapzilla may manage to develop. For instance if Tapzilla can say to a developer that they have 20,000 users with an average 20% redemption rate then Tapzilla is going to be a lot more likely to be successful in selling their service to a developer than a new operation with only 50 users. To be able to do this successfully on a longterm basis Tapzilla will need to be able to get several case studies as evidence that, due to the freebies, a certain App went up the sales charts which then resulted in more visibility and more paid sales. Otherwise it could just be a losing proposition for developers.