There is a school of thought which states that Apps can be costly to develop. Yes, it could be costly but the interesting fact is that the Return on Investment (ROI) could be quite high too. And once the initial investment is covered using one or more revenue streams within an App which I will be highlighting in this article, the additional income would be all net profits.

Nowadays it is a common practice by most App owners to make their App available on either App Store or on Google Play free of charge so that the user-base for the App could be enhanced rather quickly. It is interesting to note that more than 25% of IOS App owners earn more than $5,000 per month and with the Android user-base increasing daily, more than 16% Android App owners too enjoy an earning over $5,000 per month.

So, if most of the leading Apps are available free of cost for users to download, how do the owners make money?

Apart from making the App available at a cost on App Store or on Google Play, mentioned below are few methods where Apps could generate revenue.




This method is popular in Apps where there is online content. Users could view certain content free of charge but in order to view the restricted content or the additional content, users will have to subscribe thus paying a fee. An example of this would be on the where the users could view and read a set number of news articles free of charge but to read more content, the users need to subscribe and make a payment.

Here’s a link to The Age’s subscription.

Furthermore, another example would be ‘WhatsApp, where the user enjoys the service free of charge during the first year but has to pay $0.99 for continued service from there onwards.


In-App Purchases



This method of revenue generation is commonly seen in Gaming Apps. Users can play up to a certain level in a game app free of charge but for them to proceed, the users will have to purchase other levels in the Game. This is a great way to increase the user-base of the App and once the users are engaged to the content in the App, the probability is high that the users will make the In-App purchases and will continue using the App.


Third Party Advertising



This method works well too in generating an income for the App owner but needs a sizeable amount of user traffic in order to make the process worthwhile. The main two (2) ad networks iAds an Admob could be used and other Apps and Websites are advertised within your App to generate user traffic to those Apps or Websites. There are three (3) sub-sections under this where revenue could be generated. 1) When a person just views the ad (CPM). 2) When a person clicks the ad. 3) When a person downloads the App. Out of these three, highest probability is associated to the viewing option and for example, if the advertised Ad generates 1000 views, you could gain $1 as an additional income and there are some Apps which generate approx. $120 per day, therefore, it is important that suitable and correct ads are advertised within your App to generate the additional revenue.

Link to AdMob Monetisation


Sponsorships / Internal Advertisements

The other main avenue to earn revenue through an App is to find sponsors who are willing to advertise within your App. This could be a cost-effective method for advertisers since they could attract the attention of many users without having to invest unlike they might do so on electronic and press media platforms. And even if they invest on press and electronic media to advertise, it is not guaranteed that the target users will view the advertisements since many people switch television or radio channels when the advertisements are being played. But however, when it comes to advertising within an App, the advertisers are guaranteed that the users of the App will see the App since the advertisement will be displayed within the App screen (mobile phone screen). However, in order to approach potential advertisers, it is best that a sizeable user – base is built beforehand so that they will be attracted to sponsor within the App.

Taking the above factors into consideration, investing in a Mobile Phone App which has a competitive edge would be a smart way to retire early while securing a continuous income.

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