If You Want to Make Money From Apps, Forget About the App Store

Considering the number of free apps that clutter the world’s many app stores and the pittance paid by mobile advertising networks to app developers, it was only natural that app makers would find other ways to make money from creating mobile software. A recent report by VisionMobile, a London-based research firm that looks specifically at developers, puts into numbers just how much developers earn in other ways—which is to say, a lot. Taken together, app stores sales and advertising together count for less than a quarter of all revenues for developers.

Only 11% of apps are paid for, a number that will decline to 7% by 2016 as more and more people in the developing world start using smartphones. Including things like in-app purchases, app-store subscriptions and normal fees to download an app, app store revenues across platforms brought in $8 billion globally. Advertising contributed another $3.8 billion. That is 15% and 7% of the $53 billion that the report calculates as the total value of apps to the global economy in 2012.

The rest of it comes from sources such as e-commerce licensing and commissioned app-making. The largest of these is app-making on contract. Just as building software for businesses made the fortunes of several older tech firms such as Oracle and SalesForce, making custom apps and maintaining them is far more lucrative for developers than appealing to frugal consumers. At $30.2 billion, commissioned apps account for 56% of revenues earned by developers worldwide, more than double what they made from app stores and ads.

Read more at Quartz. 

(Image via Sergey Nivens/Shutterstock.com)