JV BONUS #6: App Monetization Cheat Sheet

💎

Paid App

One-Time Purchase

Typical Price Range $0.99 - $9.99

Apple's Cut 15-30%

Conversion Rate 1-3%

Revenue Type One-Time

Pros

Immediate revenue
Simple to implement
No ongoing features needed

Cons

Harder to get downloads
No recurring revenue
Higher user expectations

Best For: Utility apps, tools, games with clear value proposition

🎁

Freemium

Free + Premium Upgrade

Typical Premium Price $2.99 - $14.99

Free to Paid Conversion 2-5%

User Acquisition Easiest

Revenue Type One-Time/Mixed

Pros

Easy to get downloads
Users try before buying
Viral potential

Cons

Most users never pay
Need compelling premium features
Balancing free vs paid tricky

Best For: Productivity apps, trackers, journals, any app that improves with use

🔄

Subscription

Recurring Revenue

Typical Price Range $2.99 - $14.99/mo

Apple's Cut (Year 1) 30%

Apple's Cut (Year 2+) 15%

Trial Conversion 30-50%

Pros

Recurring revenue 💰
Predictable income
Higher lifetime value

Cons

Need ongoing value delivery
Higher churn rate
Users subscription-fatigued

Best For: Content apps, fitness, meditation, any app with ongoing value

📺

Advertising

Ad-Supported Free

Banner CPM $0.20 - $2.00

Interstitial CPM $2.00 - $10.00

Rewarded Video CPM $10 - $50+

Users Needed 10,000+

Pros

App stays free
Scale = more revenue
Works with other models

Cons

Need massive user base
Hurts user experience
Low revenue per user

Best For: Games, entertainment apps, high-volume utility apps

🛒

In-App Purchases

Consumables & Add-ons

Typical IAP Price $0.99 - $99.99

Payer Conversion 1-5%

ARPPU (Avg Rev/Payer) $5 - $50+

Apple's Cut 15-30%

Pros

Unlimited revenue potential
Whales can spend big
Flexible pricing

Cons

Complex to implement well
Can feel "pay to win"
Requires careful balancing

Best For: Games, creative apps (filters, templates), content packs

🔀

Hybrid Model

Multiple Revenue Streams

Revenue Streams 2-3

Revenue Increase 50-200%

Complexity Medium-High

User Satisfaction Varies

Common Combinations

Freemium + Ads (remove ads = premium)
Subscription + IAP (extras)
Free + Ads + Premium tier

Best For: Established apps looking to maximize revenue from existing users

📊 Revenue Calculation Formulas

Monthly Revenue = Downloads × Conversion Rate × Price × (1 - Apple's Cut)

Use this for one-time purchases and freemium apps

Subscription MRR = Active Subscribers × Monthly Price × 0.70

Monthly Recurring Revenue (after Apple's 30% cut, 15% after year 1)

Ad Revenue = (DAU × Sessions × Impressions) × CPM ÷ 1000

Daily Active Users × Ad impressions per session × CPM rate

💡 Real-World Examples

📱 Paid App Example

500 downloads/mo × $4.99 × 0.70

$1,746/mo

🎁 Freemium Example

10,000 downloads × 3% convert × $9.99 × 0.70

$2,097/mo

🔄 Subscription Example

1,000 subscribers × $4.99/mo × 0.70

$3,493/mo

📺 Ad Revenue Example

5,000 DAU × 3 sessions × 2 ads × $5 CPM

$150/day = $4,500/mo

🏆 Monetization Pro Tips

💰 Price Anchoring

Show annual price as "just $X.XX/month" to make it seem cheaper. "$49.99/year" → "Only $4.17/month!"

🎯 Free Trial Sweet Spot

7-day trials convert better than 3-day (too short) or 14-day (users forget). 7 days is perfect.

📍 Paywall Timing

Show paywall AFTER user gets value, not before. Let them experience the "aha moment" first.

🔢 Magic Price Points

$X.99 still works. $2.99 feels much cheaper than $3.00. $9.99 feels premium but accessible.

📈 Annual Discount

Offer 40-50% off for annual plans. Users commit longer, you reduce churn, everyone wins.

🎁 Remove Ads Upsell

If using ads, "Remove Ads" is the easiest premium feature to sell. Users hate ads!

App Monetization Cheat Sheet

💰 The 5 Ways to Make Money With Apps

Paid App

Pros

Cons

Freemium

Pros

Cons

Subscription

Pros

Cons

Advertising

Pros

Cons

In-App Purchases

Pros

Cons

Hybrid Model

Common Combinations

💰 Pricing Sweet Spots by App Category

📊 Revenue Calculation Formulas

💡 Real-World Examples

📱 Paid App Example

🎁 Freemium Example

🔄 Subscription Example

📺 Ad Revenue Example

🏆 Monetization Pro Tips

💰 Price Anchoring

🎯 Free Trial Sweet Spot

📍 Paywall Timing

🔢 Magic Price Points

📈 Annual Discount

🎁 Remove Ads Upsell