So, you’re a hotshot young software developer with an awesome idea for a mobile app, you’re sure it will rock the world and have more users than Angry Birds. Perhaps you’ve already finished the app and are ready to launch in a big splash, but now the big question hits you, how exactly are you going to make money from this? Worldwide fame is all well and good but you do plan on buying a house and hopefully getting married.
This is a problem faced by many mobile application developers around the world, and as the app development sphere in Ghana and Africa grows, it’s a challenge our young developers will have to face and overcome.
On the 27th of February, Saya Mobile, launched by two local developers (products of M.E.S.T), presented its mobile chat application to an international panel of judges at the Mobile Premier Awards in Barcelona. Nominated alongside Saya were two other applications developed by African entrepreneurs. Mafuta Go, an app which helps users in Uganda locate the petrol station closest to them with the lowest price and Moraba, a mobile game which tackles the issue of gender violence in South Africa. These apps and others being developed on the continent are all exciting ideas, some already with a lot of traction, but the burning business question is ‘How are their developers going to monetize these apps?’
In general there are 4 models for monetizing your mobile application: A direct Business to Business (B2B) sales model, a ‘freemium’ model, an App Store Model and the Ad-Funded Model. Application developers can choose to use any of these models to create solid business models and monetize their applications. We’ll examine each individually:
1. Business-to-Business (B2B) Model
This model is perfect for those who are developing applications that will appeal to businesses and who are prepared to customize those applications for specific clients. Very often, selling customized apps to business clients may be a richer revenue stream than the normal Business-to-Consumer Model. To illustrate, Opera, makers of the very popular Opera Mini mobile browser, recently signed a deal with the MTN Group to push branded versions of the Opera Mini browser to MTN’s 150 million customers across Africa and the Middle East. This deal is an excellent way for Opera to monetize an application that has always existed as a free download.
2. Freemium Model
This business model has been extremely popular amongst mobile app developers. The Freemium Model basically allows a developer to distribute (for free) a basic version of their application to users. The developer may then offer extended features of the same app for a paid amount. This is an excellent method to use because it allows you to generate awareness and use of your app without the initial price barrier and hope the app impresses users enough to make them pay for extra functionality. Successful apps that have taken this approach include Angry Birds, DropBox and Evernote.
3. Ad-Funded Model
The success of Google has firmly established the fact that a software service can be delivered completely free whilst the company profits solely from advertising revenue. Targeted advertising is a billion dollar industry worldwide and as mobile phone penetration and sales explodes around Africa; targeted mobile ads to African mobile users currently are and will continue be desired by marketers. The ad-funded model would only be possible in applications that connect regularly to the Internet when operating; developers also face the challenge of designing their apps such that ads are not intrusive and do not detract from the overall user experience.
4. App Store Sales Model
The standard and most popular way a mobile application developer can quickly bring their app to the market is through an official or unofficial app store. Official App Stores include: the iPhone App Store, The Android Market, the Nokia Ovi Store and the BlackBerry App World among others. Among ‘unofficial’ app stores are: GetJar, the Opera Mini Store and operator/carrier stores. App Stores allow for (relatively) easy market entry, some amount of visibility, and a trusted revenue collection method.
As stated most apps are already delivered through an App Store, the particular business model examined here is that of full app sales from an App Store. There are, however, some drawbacks to this model. First off market entry itself may not be as easy as it seems. Apple for instance is noted for its long application review process which means it could take several months after submitting your app before it hits the market and starts making any money. On this score the Android Market or other app stores may be easier roads to market entry depending on your target market and which ecosystem your app was programmed for. As well, app developers must note that most app stores will take a percentage of sales revenue for themselves, this will need to be weighed against the benefits of presence in an App Store.
DreamOval itself will be launching an app store in the next few months for African developers of mobile applications and mobile contents to easily monetize and make their apps available for the global market.
These then are the four main methods you, or any other software developer can get some monetary reward for all those long hours of programming. The bane of software developers for many years has been that though they may excellent programmers they are often not true business men. The future of mobile application development in Africa rests in the capability of our local developers to not only develop apps that are fun to use and/or solve real problems but apps which also bring themselves and their families some much needed revenue.
Executive, Product Marketing and Media Relations.