Media companies hope to build solid revenue streams by betting on user payment on mobile platforms. But a look at Apple’s top grossing lists for iPhone and iPad sends a warning signal.
I was involved in launching a paid recipe app for iPhone in the Norwegian market at couple of weeks ago -and that made me follow closely the top grossing lists for iPhone and iPad.
Apple provides three different top charts for apps: Top free apps, Top paid apps and Top grossing. While the first two rank how many apps are downloaded, the third ranks how much money the apps bring in at any time. The top apps on this list may not necessarily be the ones downloaded the most, but they still succeed in bringing in money for the developers.
What types of apps dominate the top grossing list?
To find out I went through the top 25 grossing lists for both iPhone and iPad in the Norwegian market as they were ranked in the evening on Sunday, June 12th. All apps were assigned to one of four categories:
- Usefulness. Apps that primarily help people perform a specific task
- Entertainment. Primarily games.
- Media/content. Apps that primarily are designed for consumption of news or other types of media content.
- Social. Apps that primarily are built on people connecting to each other
Top grossing iPhone apps
Two of the 25 apps were categorized as “social”.
However, the two dominating categories were “Entertainment” (13 apps) and “Usefulness” (10 apps).
I noted another interesting aspect: Only one of the ten most grossing iPhone apps were priced “normally”. That was the Hipstamatic app priced at NOK 11 (USD 2). All the rest at the top 10 carried either an extremely high price tag (4 navigation apps priced at USD 75 and above) or were free (games apps that made money on in-app purchases).
Almost all the rest of the top 25 list followed the same pattern: Either they were userpaid apps helping people achieve a specific task, like finding the owner of a car or creating music, or they were free or almost-free games apps.
Conclusion so far: To succeed in bringing in money on iPhone apps you should either try to be extremely useful or succeed in creating compelling entertainment for your users.
Here is the top grossing list for iPhone apps:
[table id=2 /]
Top grossing iPad apps
The top grossing list for iPad apps in the Norwegian shows a slightly different pattern, yet more or less the same conclusions can be drawn.
12 of the top 25 grossing apps are within the “Usefulness” category, while 11 belong to “Entertainment”. Also for iPad we see some highly priced navigation apps quite high on the list. In the “Entertainment” category the main difference from the iPhone market was that only very few of the top grossing apps were free.
Two apps in the “Media/content” category made it to the top 25 grossing list.
The first was already in the third place on the list: ”Lillesøster”, a children’s book specially designed for the iPad format and with a price tag of 5 USD.
On ninth place was Aftenposten, the news app from Norway’s largest newspaper. (Disclaimer: I work for Media Norge, the owner company of Aftenposten).
Aftenposten’s news app is free to download and could also be used for free for the first weeks after it was launched on March 31st. This has led about 40.000 people to download the app. However, since June 7th Aftenposten has required users to pay. Access is available only as a subscription and can be bought both from within App Store and from Aftenposten’s web site. There are also bundled products which include the iPad subscription. These can only be bought from Aftenposten’s web site.
It is obviously too early to say how Aftenposten’s iPad app will rank on the top grossing list in the long term. The ranking is also complicated by the fact that parts of Aftenposten’s income on the app is not reflected in App Store’s grossing list.
Conclusion for iPad: To succeed in bringing in money on iPad apps your chances seem to be much higher if you bet on meeting people’s need for usefulness or entertainment. But looking further down the top grossing list media/content apps seem to do much better on iPad than on iPhone.
Here is the top grossing list for iPad apps:
[table id=3 /]
What does this mean for media companies?
Is it hopeless to charge for media content on iPhone and iPad? Of course not. But the top grossing lists give some clear hints to what in particular drive people to pay on these new platforms. Publishers are smart to study this to see if some of the elements can be introduced in news apps as well. For instance: How do you use your media product to help people achieve their goals? What can you do to make it really useful in people’s life? Is there any way to gamify the news experience – or to use in-app purchases creatively?
The Apple’s top grossing lists for Norway will, however, not give the full picture of how media apps will do when it comes to user payment:
- Few media companies have so far tried user payment extensively. Aftenposten is the first major news company in Norway to put its iPad app behind a paywall.
- Many media companies have so far kept most or all of their user paid revenues out of App Store. Typically the users will pay for the product at the media company’s web site – and then get access for free on iPad by entering login information. As we all know, Apple is now tightening the rules for how this can be done, but so far most revenues on media apps have been kept outside the App Store statistics.