Taking a page from Amazon’s book, independent app store GetJar is giving away premium Android apps for free. But unlike Amazon, GetJar isn’t just using its new GetJar Gold service as a promotional campaign. Instead it’s turning premium apps into free apps permanently, shifting its business model away from paid downloads to advertising.
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GetJar will be offering an initial catalog of 34 free premium apps that normally retail between $1 and $5 on other app stores, but it plans to add more gaming, entertainment and productivity applications as it strikes more deals with developers. Some of the initial Gold launch apps are Age of Zombies, TuneIn Radio Pro, Solo, Paper Glider and Splashtop Remote Desktop. GetJar is compensating each developer for the download—though the rates may be lower than their normal percentage cuts from a download—but is making up the loss through in-app advertising.
“The apps will stay free—this isn’t a daily free app deal and these won’t be ‘lite’ versions,” a spokesperson for GetJar said. “GetJar is paying the developer, but there will be an opportunity for them to make more money on advertising.
The new model follows the approach that Rovio adopted for its enormously popular game Angry Birds. The game started out as a paid download on the iPhone, but when Rovio began selling an Android version of the software for the Android Market and GetJar’s store, it shifted to a free distribution model, making its revenues through in-app advertising. The shift in business model caused Angry Birds’ already significant popularity to soar, making it the most downloaded app to date (Unfiltered: Is Angry Birds Android’s ‘tipping point’ app? [1] )
Angry Birds still makes plenty of money through paid downloads in the iTunes App Store and over other platforms, but few other apps can claim the enormous mindshare of the iconic game. GetJar CEO said one of the principle benefits of this shift to an ad-supported business model will be much more exposure for relatively unknown apps. GetJar estimates that free apps are downloaded 10 to 20 times more often than paid apps. That increase in penetration equates more ad revenues as a larger install base generates more impressions.
The move definitely adds a new wrinkle to GetJar’s already unique business model (CP: GetJar: Operators have lost the consumer ). Developers are free to submit apps to and distribute in the GetJar using whatever payment method they choose. GetJar makes its money through app discovery, taking a percentage from any sponsored download customer searches produce. At least, that was the business model until the launch of GetJar Gold. The new ad-supported format gives GetJar a steady revenue stream from apps originating from its stores, rather than just a one-off fee per sponsored download.
Though GetJar isn’t viewing Gold as a loss-leader, it could enjoy substantial promotional benefits from the program. It essentially will be offering apps for free that Android Market and the Amazon App Store offer at premium rates. Once word gets around, that could drive millions of new customers to its catalogs. GetJar already claims to have 30 million active monthly users and an international reach far beyond the U.S. focus of Android Market.
Of course, the Holy Grail for GetJar would be to tap into the iOS ecosystem, but so far Apple has resisted any attempt at independent distribution of apps for the iPhone and iPad. GetJar’s chances of winning Apple’s blessing are likely nil, given the two are in a high-profile fight over GetJar’s use of the term “App Store” (CP: Apple tells GetJar to quit using the term ‘App Store’ ).
In GetJar’s press release announcing Gold, the company founder and CEO Ilja Laurs couldn’t help taking a swipe at Apple:
“We are able to develop programs like GetJar Gold because of our open and free business model. We regret that at this time we cannot extend our program to iPhone users, as Apple runs a closed ecosystem that does not allow for competing app distributors like GetJar. Unfortunately, iPhone users will have to continue paying for the very same apps that their Android counterparts enjoy for free.”
Links
- ^ Is Angry Birds Android’s ‘tipping point’ app? (blog.connectedplanetonline.com)
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