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As a person who just launched their first two Android Applications this was an excellent read. My biggest question is do you think its best for applications to

by thezach 13y ago

As a person who just launched their first two Android Applications this was an excellent read. My biggest question is do you think its best for applications to charge a one time large fee or a monthly smaller fee?

aaronbrethorst 13y ago
What kind of fees are we talking about? Recurring revenue is the best revenue in my opinion, but if you were talking about a $1000 one-time fee vs. $5/month, it's pretty clear which avenue you should take. Also, if you're talking about offering a service, you're going to have ongoing operational expenses. If your customers pay you only once there will come a time when the profit you've derived from them is exceeded by their ongoing cost.
destraynor 13y ago
It depends on how often you deliver value and what costs you have. If you have recurring costs that increase in size with your user base, then charge a proportionate recurring fee. If it's a game that someone buys, plays for a week and moves on to the next, a subscription won't work, because there's no continuous value. So you charge up front, deliver all your value up front, and get busy working on your second game. If you're thinking big applications (e.g. Photoshop) then your question becomes about things like distribution, retention, sales channels, competitors etc. Bluntly You can take $2k every 2-3 years assuming people upgrade to your latest release, or you can take $50 per month every month assuming people stay. Both work out similar. The advantage of the $2k model is that you get big money up front which you can re-invest in more customer acquisition (or your next release). The drawback is that $2k isn't a "no-brainer" sale, it needs approval, you need a good brand, and you're limiting your addressable market a good bit. The advantage of the $49 per month is that it's a zero risk try-out, people will convert far far easier. The disadvantage is retention. Product to product I'd give different advice, but in general, recurring is easier to plan a business on.

by thezach 13y ago

aaronbrethorst 13y ago

What kind of fees are we talking about? Recurring revenue is the best revenue in my opinion, but if you were talking about a $1000 one-time fee vs. $5/month, it's pretty clear which avenue you should take. Also, if you're talking about offering a service, you're going to have ongoing operational expenses. If your customers pay you only once there will come a time when the profit you've derived from them is exceeded by their ongoing cost.

destraynor 13y ago

It depends on how often you deliver value and what costs you have. If you have recurring costs that increase in size with your user base, then charge a proportionate recurring fee. If it's a game that someone buys, plays for a week and moves on to the next, a subscription won't work, because there's no continuous value. So you charge up front, deliver all your value up front, and get busy working on your second game. If you're thinking big applications (e.g. Photoshop) then your question becomes about things like distribution, retention, sales channels, competitors etc. Bluntly You can take $2k every 2-3 years assuming people upgrade to your latest release, or you can take $50 per month every month assuming people stay. Both work out similar. The advantage of the $2k model is that you get big money up front which you can re-invest in more customer acquisition (or your next release). The drawback is that $2k isn't a "no-brainer" sale, it needs approval, you need a good brand, and you're limiting your addressable market a good bit. The advantage of the $49 per month is that it's a zero risk try-out, people will convert far far easier. The disadvantage is retention. Product to product I'd give different advice, but in general, recurring is easier to plan a business on.