What is the app economy?
Here at Music 4.5 we like looking at tech trends where investors and innovators are getting a return on investment, after all, that is our motto. During previous events we have looked at Data (the new oil?) and what video means for the music industry. For our next event we turn to one of the tech buzzwords of the day – the app economy and the in-app economy. But what does it all mean?
What is the app economy?
App economy refers to the range of economic activity surrounding mobile applications. The app economy encompasses the sale of apps, ad revenue or public relations generated by free apps, and the hardware devices on which apps are designed to run.
In 2007, virtually no mobile apps existed. As of 2011, more than 25 billion apps have been downloaded, writes Techopedia.
In 2013 we downloaded around 70bn apps, writes app developer Massimiliano Silenzi for the Guardian. That’s ten times the number of human beings on the planet. According to the article around £7bn would be spent on mobile games in 2013.
How does the app economy work?
There are of course several different kinds of apps. There are useful apps that we’re happy to pay for, like productivity apps, accounting apps, health apps, image editing software or text editing tools.
There are also less “useful” apps that are getting plenty of love in the apps stores, mainly games, some of them very addictive games. Anyone who’s spent more than fifteen minutes with Candy Crush will understand how tempting it can be to pay £0.69 to unlock a new level. And that brings us to the next point.
Wait a minute – aren’t most apps free now days?
Here we come to the so called “death of the app economy“. Which isn’t really a death at all, instead it’s more of a transformation where apps are made free and developers earn revenue from in-app purchases instead.
Even if you’re not very interested in the tech industry you will have heard about these in-app purchases, the bane of every parent with small children who somehow manage to click up a bill of several hundred pounds by making in-app purchases. These parents then go on the BBC and complain about it.
But for developers these in-app purchases can be very lucrative. And in the end they need to make a living. Competition between developers have made most apps in the App Store free.
Already a crowded field
There are over a million apps to choose between out there. So how do you make sure the one you make will rise to the top? Well it’s the same problem any creative person will face. But apps are not just another part of the entertainment industry, they’re a lucrative part of that industry. Which means there are opportunities for already established players in the field.
Lady Gaga’s latest album was released as an app. What else will we see in this field? Which other players will move into the app economy? What are the best ways of monetising apps? Find out more at the Music 4.5 In-app Economy event in February.
Image via Albert Hsieh.