Distimo average revenue per download feb 2014

How the Most Successful
Apps Monetize Globally
By Christel Schoger, Analyst at Distimo
Publication - February 2014

Solving the App-Puzzle

Distimo ©2014, some rights reserved. All trademarks are the property of their respective owners.


How the Most Successful
Apps Monetize Globally
Analyzing top apps globally sheds light on how these apps generate revenue and make a profit. In this publication
we revisit a topic we investigated nearly a year ago in our March 2013 publication, looking at more than just
revenue and downloads. We studied mobile app revenues in relation to download volumes and will now show new
developments and identify more recent global trends. This publication includes a synthesis of the revenue share
from in-app purchases (IAP) over time and average revenue per download (ARPD) breakdowns for top apps by
country, business models, and device type.  
For part of this analysis, we joined forces with Chartboost, a games-only technology platform, which enables the
promotion of mobile games. We present some of their data on the average cost per install (CPI), to complement
our analysis of average revenues per download with a focus on mobile games. This type of analysis provides a
detailed overview of the profitability and revenue potential in different mobile app markets in the gaming sector.
All data used in this publication is directly extracted from Distimo AppIQ. The analyses in this publication mainly
focus on data for the Apple App Store, covering January 2012 through January 2014, unless otherwise noted.



Major Findings
On average, one download is worth $5.32 in Japan, validating the enormous potential of the Asian app market.
Comparing Chartboost CPI data with ARPD data for Games, the five markets that show the most revenue potential
are Japan, Australia, South Korea, United Kingdom, and the United States.
In January 2012, free apps with in-app purchases only generated 46 percent of revenue in the United States
on iOS, while in November 2013 an all-time high of 81 percent was reached.
The ARPD can fluctuate in different markets even for the same app, e.g. Jewel ManiaTM reached an ARPD of $6.65
in Australia and $1.44 in France based on aggregated iOS data for Q4 2013.
In general, the ARPD is higher on iPad devices. However, the majority of revenue is generated from iPhone devices.
Although it is known that the highest revenue share is generated from the freemium model, both business models
of paid apps bring in higher revenues per download.
Paid apps are more likely to be downloaded in the month of December.
China and Japan are leading when it comes to the largest revenue share from the freemium business model,
with a record of 94 percent in January 2014.



Revenue Share per Business Model
One of the most evident trends in 2013 was the steadily growing revenue share of the freemium business model
as analyzed in our 2013 Year in Review publication. Free apps with in-app purchases (IAP) generate the majority of
the revenue in the app stores.
The graph below presents the top 10 countries in terms of mobile app revenue in the Apple App Store in January
2014, displaying the revenue share for each business model.

Revenue Share per Business Model
Apple App Store - January 2014
China

94%

South Korea

4%

94%

Japan

5%

89%

United States

9%

79%

17%

4%

France

78%

17%

5%

Canada

78%

18%

4%

Australia

77%

20%

3%

Russia

76%

20%

4%

United Kingdom

76%

21%

3%

26%

4%

Germany

70%

0%

10%

20%

30%

Free Apps with IAP

40%

50%

60%

Paid Apps without IAP

70%

80%

90%

100%

Paid Apps with IAP

China and Japan are leading when it comes to the largest revenue share from the freemium business model,
with a record of 94 percent in January 2014. In contrast, only 70 percent of Germany’s total revenue was
generated from free apps with IAP. Larger revenue shares from the paid business models are mainly based on
apps from categories like Productivity, Navigation, or Education*. The higher popularity of these categories in
Germany explains hence the relatively higher revenue share from the paid business models.
While these high revenue shares of the freemium model are not novel, it is interesting to analyze the increasing
trend over time. For this perspective we chose the United States, demonstrating the development from January
2012 to January 2014:

Free Apps with IAP are still on the rise
Revenue share from free apps with IAP, Apple App Store, Unites States, January 2012 - January 2014
90%
80%
70%
60%
50%
40%
30%
20%
10%

*

A detailed analysis of the revenue share of business models per category, can be found in our publication: 2013 Year in Review.


n

c

Ja
4

20
1

t

v

De

No

p

Oc

Se

Au
g

n

Ju
l

Ju

ay
M

ar

b

Ap
r

M

n

Fe

c

Ja
13

t

v
No

p

Oc

Se

l
Ju

Au
g

Ju
n

r

ay
M

ar

Ap

M

De

20

20

12

Ja
n
Fe
b

0%


In January 2012, in-app purchases from free apps generated only 46 percent of revenue in the Apple App Store in
the United States. In January 2013, this share had already increased to 66 percent, and in November an all-time
high of 81 percent was reached.
Looking at the graph above, it is interesting to note the drop of in-app purchase revenue shares during the
December months. This drop may indicate that users are more willing to purchase paid apps during the holidays.
At the same time, the month of December is probably the most profitable for apps with paid business models.
This growing development is clearly demonstrating the success of the freemium business model.
In January 2014, the revenue share of free apps with IAP was at 79 percent.

Average Revenue per Download (ARPD)
The revenue shares of the different business models themselves don’t necessarily indicate how well individual
apps monetize. To gain deeper insights on this perspective, we took a look at a different metric, calculating the
average revenue relative to the download volume.
The average revenue per download (ARPD) can be an important and useful metric for developers when analyzing
the performance and monetization of their apps. The ARPD is calculated by dividing the sum of all revenue
generated by the sum of downloads of all apps. Therefore, this metric indicates monetization on an app level
and allows for a comparison of the performance of particular apps.

ARPD by Country
First, we look at the ARPDs for the top 10 revenue-generating countries in the Apple App Store.
The results below are based on a sample of the top 250 grossing apps in the Top Overall category (for each
country) in Q4 2013. Apps that were released before January 2012 are excluded from this analysis.
This ARPD calculation is based on estimates for revenue and downloads generated since January 2012,
to present an average based on a larger time frame.

ARPD by Country
Apple App Store, Top Overall, January 2012 - January 2014
$5.32

$3.60

$3.40
$2.38

$2.30

$2.29

$2.25
$1.78
$1.30

Japan

Australia

South
Korea

Canada

Germany


United
States

United
Kingdom

France

Russia

$0.92

China


The countries with the highest ARPD were concentrated in the APAC region, with Japan emerging as the leader:
On average, one download is worth $5.32 in Japan, based on the selected time period.
Australia and South Korea have the second and third highest ARPD respectively, showing the enormous potential
of these app markets. Other countries with high ARPD values were Canada, Germany, the United States and the
United Kingdom - all of which generated around $2.30 per download.
From an ARPD perspective, China seems to be an exception to the strong Asian markets, with a relatively lower
ARPD of $0.92.

ARPD by Device
Going one step further, we studied the same sample apps also by device, displaying the relative ARPD values for
iPhone and iPad separately.

ARPD - iPhone and iPad
$8
$7
$6
$5
$4
$3
$2
$1
$0

Japan

iPad

Australia

South
Korea

Canada

Germany

United
States

United
Kingdom

France

Russia

China

iPhone

When comparing the ARPD for the two iOS devices, the ARPD is relatively higher on iPad for all these 10 countries.
While in most countries this difference is clearly visible, South Korea, France, and China show almost similar values.
However, when examining the total revenue distribution between those two devices, the iPhone revenue portion
is generally higher, as presented in the following graph*:

Revenue Distribution iOS
Apple App Store, Top Overall, Q4 2013
9%

91%

Japan

iPad

19%

81%

South
Korea

27%

73%

China

37%

42%

47%

47%

48%

49%

54%

63%

58%

53%

53%

52%

51%

46%

France

Germany

Australia

Canada

United
Kingdom

United
States

Russia

iPhone

*

To present a more current device distribution for or sample, we chose the time period Q4 2013.



This difference is especially significant for Japan: e.g. for this sample in Q4 2013, only 9 percent of the revenue was
generated from iPad, whereas a whopping 91 percent of revenue came from iPhone devices. The ARPD on iPad is
with $7.19 significantly higher than the iPhone average at $5.25. For the case of Japan this data exhibits that users
who invest in iPad devices are also more likely to spend relatively more on iPad apps.
Knowing the ARPD in combination with the general revenue distribution, enables a more relative interpretation of
the ARPD: In short, while the ARPD is higher on iPad devices, the majority of revenue is still generated from iPhone
devices.

ARPD by Country for the Same App
From the previous sections we have seen that the ARPD can vary for different countries and even among devices
in the same country. Analyzing our data in more detail, we found that the ARPD can even differ largely for the
same app among different countries.
Below, we show Q4 2013 ARPD data for Jewel Mania™ by TeamLava. While one may assume a similar user behavior
for the same app, this example shows that the dollar spend per download fluctuates in different countries.
In the ten countries below the ARPD for Jewel Mania™ ranges between $1.44 in France and $6.65 in Australia
in the same time period, Q4 2013.

ARPD for Jewel ManiaTM
Apple App Store, Q4 2013

$3.52
$2.81
$2.43
United
Kingdom
$3.32

$1.57

$1.61

Canada

South
Korea

Russia

$1.44

$2.08

Germany
$1.61
United
States

France

Japan
$6.65
Italy

Jewel Mania™
TeamLava


Australia


ARPD by Business Model
Looking at our same sample, presenting the ARPD by business model, allows us to analyze the relative
monetization of particular apps on a more granular level:

ARPD by Business Model
$20
$18
$16
$14
$12
$10
$8
$6
$4
$2
$0
Japan

Australia

South
Korea

Canada


Germany

Paid Apps with IAP

United
States

United
Kingdom

France

Russia

China

Free Apps with IAP


When looking at the graph, Japan exhibits a significantly higher value for the ARPD for paid apps without IAP
compared to the other countries. To clarify, for paid apps without IAP, the ARPD is simply the price of the app.
In this sample, Japan had a very low amount of paid apps without IAP, most of which were priced around $18,
including apps like FINAL FANTASY V by SQUARE ENIX INC. Typically, most other countries included apps from this
paid business model, priced around $0.99 to $1.99, which brought the average down. This was not the case for
Japan and hence explains the higher value. Overall paid apps without IAP had the highest ARPD.
The United Kingdom was an exception from this trend, mainly based on apps as Football Manager Handheld™ 2014
by SEGA. This paid app with IAP, for example, generated more than 65 percent of its Q4 2013 revenue in the United
Kingdom and monetized relatively better per download.

Free Apps with IAP vs. Paid Apps with IAP
It may come as no surprise that the ARPD for free apps with IAP differs from the one for paid apps with IAP.
Overall, free apps exhibited a lower ARPD, as there is no upfront cost to download free apps.
An interesting conclusion from the analysis of the ARPD by business model can be drawn by separating the in-app
purchase portion from paid apps with IAP and comparing only the ARPD of this share with the ARPD for free apps
with IAP.
Mostly, this confirms the reasonable assumption that people spend more money on in-app features when the apps
are free. In some countries though, the ARPD for the free in-app portion is pretty similar to the ARPD for the paid
in-app portion, as seen in France or Russia. In China, the ARPD for the in-app portion from paid apps with IAP is
even higher than the ARPD for free apps with IAP. This indicates that Chinese users are less opposed to purchasing
further in-app features after they already paid for the initial purchase.
$6
$5
$4
$3
$2
$1
$0
Japan

Australia

South
Korea

Free Apps with IAP

Canada

Germany

United
States

IAP portion from Paid Apps with IAP


United
Kingdom

France

Russia

China


In summary, these results show that paid apps without IAP have the highest ARPD overall.
Furthermore, paid apps with IAP monetize overall better per download than free apps with IAP. Although it is
known that the highest revenue share is generated from the freemium model, both business models of paid apps
bring in higher revenues per download.

Average Revenue per Download vs. Average Cost per Install
Now that we have taken a look at how the ARPD breaks down from different perspectives, we can leverage this
knowledge to look at the user acquisition side, which is another important factor for most developers.
For this purpose, we joined forces with Chartboost, the largest games-only development platform that enables the
promotion and monetization of mobile games. This type of analysis provides a detailed view of the profitability
and revenue potential in different mobile app markets in the gaming sector.
Chartboost releases a global CPI heat map for iOS, Android, and other platforms, on a monthly basis.
For this analysis, we focus on Apple App Store data, aggregated over Q4 2013, to complement our ARPD analysis.

Average Revenue per Download vs. Average Cost per Install
Apple App Store, Games Category, Q4 2013

$2.73

$3.82

$2.42

$6.34

$2.33
$1.86
$1.98

$2.45
$2.07

$2.52

Canada
$2.17

$1.13

United Kingdom

$0.90

South Korea
$1.61 $1.47

Germany
China

$1.86

$4.50

United States
Italy

Japan
$2.59

Average Revenue per Download

Average Cost per Install

Australia

The graph presents the average cost per install (CPI) in green, based on each particular country from data
collected over the Chartboost network in Q4 2013.
In line with this, we adjusted our sample for the ARPD calculation, focusing only on revenue and download
volumes for the top 250 grossing apps in the Games category during Q4 2013. Apps that were released before
January 2012 are excluded from this analysis. The pink bars represent the calculated ARPD for this sample.



In Q4 2013, iOS CPI rates for the selected countries ranged between $0.90 in China and $2.59 in Australia.
The average CPI among all countries was $1.31.
The CPI data points provide useful insights for developers looking to understand the mobile landscape and
specifically the gaming sector. Combining these metrics with our ARPD data can provide further insight into the
revenue potential in different countries.
Comparing the ARPD with the average CPI data, the five markets that show the most revenue potential were
Japan, Australia, South Korea, United Kingdom, and the United States.
Japan promises the largest revenue potential: analyzing this sample, an ARPD of $6.34 is possible.
With an average CPI of $1.86, this results in a potential profit of $4.48 per download.
In line with our general ARPD analysis in the beginning, Japan is also leading when analyzing the Games category.
In general, the ARPD for the Games category was slightly higher than in the Top Overall category, indicating that
Games monetize better overall.*
These data points give some insights on which markets have the most potential. This can of course differ among
different categories or time frames.
Chartboost emphasizes that the presented CPI data only includes paid installs. The CPI values do not include
installs from other channels, such as community, organic, news articles, etc. When including these additional
sources of installs, the net amount paid per install will be lower, and the overall revenue potential will increase.

*

The chosen time period for this part of the analysis is Q4 2013. The ARPD values also show variations for different time frames.



Recap
The analysis about the monetization of apps on a global level provided interesting
insights from several different perspectives.
Our analysis showed that the paid business models generate a higher ARPD and
can still be a viable monetization option, despite lower download volumes.
Diverse markets and the related user behavior have an influence on the ARPD,
even when looking at the same app.
Even though the overall ARPD for the freemium business model is lower, free apps
with in-app purchases are the dominant business model and proved to be the
most profitable with the largest revenue shares.
Combining general market statistics with the more granular ARPD metric can be valuable for developers when
deciding how to market and monetize their apps.
Including additional industry metrics as, such as the CPI, can help to evaluate the best matching markets, depending
on the individual strategy for releasing a new app. With Chartboost’s data, we could identify the five markets that
show the most revenue potential: Japan, Australia, South Korea, United Kingdom, and the United States.
It makes sense for developers creating new apps to look into ARPD metrics of similar apps in terms of business
model, country, device, and time frame. Knowing these insights can help to determine the best strategy for any
individual app in order to increase revenue potential.


Christel Schoger

Webinar
If you want to know more about the analysis of ARPD values, our data and the reporting opportunities of Distimo’s
AppIQ, please register for our free webinar on Thursday, March 6th 2014 at 6:00 PM CET/9:00 AM PST.
We would like to invite you to send us your questions related to the topics covered in this publication.
We will try to include some answers in the webinar, so please send your questions in advance.

Contact us
For sales inquiries, please contact us at sales@distimo.com
or call +31 30 82 00 567
For press inquiries please contact Mindy M. Hull at mindy@mercuryglobalpartners.com
or call +31 62 504 7680 (The Netherlands) or +1 415 889 9977 (San Francisco, United States)



Distimo has a very clear objective: to make the app market transparent. Our goal is to provide the best and most
actionable app metrics for anyone who wants to compete in the mobile marketplace. Today, Distimo provides the
#1 free app analytics platform for developers, alongside the most accurate market data for any app globally, all
integrated into one intuitive, highly customizable and easy to use platform. Distimo’s passionate data team, worldclass engineers, advanced algorithms and analytics platform make it possible for us to track over 300,000 apps
worldwide and 3.8 billion downloads per quarter.

Chartboost is the world’s largest games-only technology platform and helps developers build a business around
their creations.
The company with 110 full time employees is based in San Francisco and was founded in 2011. Chartboost has
the first and only Direct Deals Marketplace with a social network for game developers to connect and negotiate
promotional deals to help get their games into the hands of more players as well as generate revenue.
Chartboost also offers the industry’s most transparent games-only network where developers can run promotional
campaigns with more than 60,000 games, identify the best-performing partners and find the best fit for Direct
Deals. Chartboost provides a free cross-promotion technology, allowing game developers to market their own
games. The company reaches 300 million unique users per month in over 150 countries, and drives more than 12
billion game sessions per month.



THE MOST ACCURATE
APP MARKET TRACKING
GLOBALLY

Amsterdam • London • New York • San Francisco • Tokyo

www.distimo.com


AppIQ
Get smarter. Get AppIQ!
• Benchmark any app’s downloads and revenue
• Identify market, store and investment opportunities
• Analyze market shares

THE MOST ACCURATE
APP MARKET
TRACKING GLOBALLY

• Plan marketing campaigns more efficiently

Distimo AppIQ allows users to:
• Track and compare app downloads and competitor app downloads: Analyze an app’s market share and compare
download figures versus a competitor’s in one chart. The chart shows the daily downloads and can also be
aggregated per week or month. Events such as price changes, featured listings and version updates are also
included, and allow the user to analyze the influence of each event on downloads.
• Analyze competing app revenues including those from in-app purchases: View daily revenues from competing
apps side-by-side with your own app and get extensive insight into the revenue generation of different business
models, revenue per country, and platform.
• Identify the most popular and upcoming new apps: The Leaderboard provides the daily, weekly, monthly and quarterly
rankings of all apps, and can be viewed by app store, country, category, device, and free/paid/gross. All of the major
app stores are supported, and for iOS and Google Play and the Amazon Appstore, the daily volumes per individual
app are also provided. AppIQ users see the daily downloads and revenue from in-app purchases and one-off fees.
Developers can also use the Leaderboard to see how many downloads are needed to achieve a certain ranking
on any given day.

Learn more about AppIQ at www.distimo.com/appiq

Apple Mac App Store and Windows Phone/Windows Store coming soon!


Disclaimer
This work is licensed under Creative Commons License “Attribution Noncommercial-Share Alike 3.0 Netherlands”. This license is available for
download at http:/
/creativecommons.org/licenses/by-nc-sa/3.0/nl/. This license ables you to use, copy, spread, and build upon this work
non-commercially, as long as you credit Distimo and license your new creations under the identical terms.

©2013,

Distimo average revenue per download feb 2014

Recommandé

Recommandé

Contenu connexe

Plus de Levi Shapiro

Plus de Levi Shapiro (20)

Dernier

Dernier (20)

Distimo average revenue per download feb 2014