The Monetizing ‘Droids series of posts are ways of thinking about the identifying, pricing, marketing, and selling Android applications, blending what has worked in other areas with the subtle nuances that Android imposes.
Before we can understand models for making money off of Android applications, we need to first take a peek at the world of free.
At the time of this writing, Android applications are mostly free. It is certainly possible to sell Android applications, through your own site or through select markets. But the Android Market, rightly or wrongly, is the centerpiece of Android application distribution, and today, everything on there is free.
However, free does not have to mean zero revenue.
The notion of free applications, or free content more generally, has been a staple of the Internet since its inception. To figure out how to make money on free, we need to think about various business models that can use free as a component.
The best way to do that is to call upon the expertise of the Crown Prince of Free: Chris Anderson.
You may remember Mr. Anderson from his book The Long Tail, where he illustrated how the “infinite shelf space” you see on Amazon.com and Netflix may create a “long tail” of niche products, individually making little money but financially compelling in the aggregate.
Mr. Anderson is now turning his attention to the world of free, in the form of an upcoming book and posts on his blog.
Specifically, he has identified four flavors of free:
- Things that you get for free as part of purchasing something else, such as the first free oil change with the purchase of a new or used car
- Things that you get for free in exchange for viewing advertising, with the advertisers underwriting the creation and distribution of the free items
- Things that you get for free because others are paying a premium for enhanced versions of the same thing (e.g., free and “pro” versions of a piece of software)
- Things that you get for free because the giver is seeking something other than money in return: attention, reputation, contributions in kind, etc.
We can see examples of the latter three flavors of free already in Android:
- Imeem has introduced an advertising component to their popular streaming audio player for Android, with both display ads and branded stations.
- Plenty of applications are listed on the Android Market as free editions, with hints of more powerful editions to be made available sometime…presumably after the Android Market starts allowing developers to charge for applications.
- Open source Android applications are usually not seeking money, but rather are enhancing the developers’ reputations. OpenIntents, for example, gets a fair bit of attention for their free applications, which helps them promote their non-free applications and consulting services.
The first flavor of free — free bundled with something paid-for — might come to pass as well, but cannot until people are more aggressively selling Android applications.
Once the Android Market starts allowing you to charge for your applications, these models will continue to hold. Nothing is forcing you to charge for your applications, and you may find that you get better results from a for-free model than you will from a for-fee model. However, there is little doubt that many people will want to try to charge for their applications, seeing how many people made interesting money when the iPhone App Store launched.
And so, in upcoming posts in this series, we will look at how to build a business around the sale of Android applications.
