Most app developers aren't even breaking even, but still keep going

Summary:The arrival of mobile computing hasn't altered the laws of economics for developers, a new survey confirms.

First, the bad news: most app developers aren't seeing a dime from their creations. Now, the slightly better news: with some marketing and reaching out to advertisers, there are revenues to be made.

iPad photo by Joe McKendrick 5-2013
Photo credit: Joe McKendrick

App Promo (who, as their name suggests, is in the business of helping software authors bring in revenues from their apps) recently conducted a survey of 365 app developers and came up with a bunch of sobering findings, displayed in their infographic, below.

Things are getting tougher out there in the app world. The survey finds that the majority of respondents (67%) indicate that they are not yet breaking even with the revenue they are generating with their app compared to the costs of operating it. This is up from 59% in a similar survey conducted a year ago at this time.

In addition, 68% of survey respondents indicated their app has earned less than a $1,000 since launch, with 29% of the respondents indicating that their app has yet to generate any income at all.

It appears that the direct-payment model for apps is collapsing as well. There has also been a huge shift away from attempting to collect revenues directly from users. Sixty-three percent say they are providing their apps for free, up from 35% a year ago. 

It probably shouldn't be too surprising that many app developers are struggling -- the market is glutted, and app stores are bulging at the seams with hundreds of thousands of look-alike apps. A few years ago, anyone that came up with a simple app (such as turning an iPhone into a flashlight) stood out. Now, it's almost impossible to be original, and then to be heard above the ruckus. In fact, the survey shows half the developers complain that it's a challenge just to make their apps discoverable.

The survey's authors also identified some very successful app developers in the bunch as well. What do they have in common? Most have been in this game for three or more years; and most have some type of marketing budget, usually about $1,000 a month. And they're more likely to be iOS app developers versus Android (68% versus 45%). Oh, and some have earned more than $500,000 in total revenues over this multi-year span.

The takeaway here is the arrival of mobile hasn't altered the laws of economics when it comes to software publishing. As developers have learned over the decades, you can have the most sophisticated and elegant application ever created, but if it isn't publicized and marketed, it will remain on the shelf. 

TheLittleAppDeveloperThatCould_51adc9ca326b5

Design+Illustration: Menk Andemicael

Studio: Nicole Chiala

Topics: Apps, Mobile OS

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

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