Winning Big With Long-Tail Apps

From apps that blend games and commerce to apps that encourage media consumption in the mobile moment, it's clear that the app economy is on the move. But it's also a marketplace in which competition is on the rise. Nielsen reveales--in the post "So Many Apps, So Much More Time for Entertainment"--that people are spending more time than ever on their apps, but they are also choosing to spend their time using fewer apps. In 2014's 4Q, Nielsen found that iPhone and Android smartphone users in the U.S. spend more than 37 hours with their apps each month, and they use 26.7 apps per month.

People have a growing desire to spend time on apps. But, in practice, Nielsen estimates people will only use a little more than 2 dozen apps regularly. As one observer at Statista, Inc. puts it, "[T]here's an app for every need, but there's no need for every app."

Competition to be a "chosen app" is heating up, increasing the pressure on content owners and companies to deliver apps their audience will appreciate and use frequently. Making a great app is half the battle. App companies and developers also have to make money. Fortunately, your chances of achieving that are much better than ever before.

The rapid advance of cross-platform tools and open APIs is helping companies develop more and better apps on a budget. In a marketplace in which companies can count on releasing app updates six-10 times per year just to keep pace with mobile innovation, these shortcuts can be a lifesaver.

New app market research reveals that an increasing number of developers are making more money. This seismic shift was discovered and documented in internal research produced by PRIORI DATA, a data-driven mobile app market analytics company headquartered in Berlin, and Pollen VC, a startup providing developers in countries including the U.S. and the U.K. with early access to their app store revenues and advice on ways to accelerate user acquisition. The research-which draws on app store data from September 2014 to April 2015 as well as a review of ranked apps, thus examining those apps that have been listed among the top grossing apps in the Apple App Store-is the first in the market to confirm the existence and expansion of a burgeoning middle class of independent app developers.

This "long tail" of app developers has grown significantly in both total numbers and topline monthly revenues. According to the findings, the number of publishers making between $1,000 and $5,000 monthly has increased 11% to reach 6,800 publishers, up from 6,100. Moving up into the top income brackets, publishers earning between $50,000 and $100,000 per month have increased 23% to reach 1,600, up from 1,300. Finally, the number of publishers earning between $100,000 and $500,000 per month is up 12% to reach 1,900, up from 1,700.

But it's not all good news. Opportunities are growing for independent app companies and developers to take their apps to new heights. However, as Pollen VC is quick to note, it still takes money to make money-and this is where even the best in class can miss a step.

Many independent app companies and developers lose steam while waiting to get paid for their app sales or in-app purchases from the leading app stores. In many cases, app developers can wait up to 60 days (or more) for app stores to pay out the revenues earned on app sales and in-app purchases. Pollen VC accesses the app sales information and data directly from the central billing system of an app store, and then it advances app developers 95% of the total revenue they have earned every 7 days. Companies can also choose to reinvest into paid advertising campaigns.

As Martin Macmillan, CEO and co-founder of Pollen VC, sees it, "The research signals a shift in the App Economy, from one dominated by blockbuster apps and legacy titles to one where conditions now allow a long tail of independent developers and startups to turn their apps into a serious business." But there is a catch. While the number of successful app companies may be on the rise, time and money are resources sure to stay in short supply. To wring the most value out of both, app developers are well-advised to harness the new models and analytics tools gaining traction to help them grasp the opportunities bubbling up from under the radar and across the long tail with both hands.   

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