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There are many ways to make money with an app — it all depends on the specific industry and the target audience. Before ordering mobile app development services, you need to think about app monetization strategy and how to make money from free apps. Let's have a look at the experience of successful brands and figure out how to create mobile apps and make money from free apps.
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The app that can be downloaded for free. Users don’t have to pay money to use this app and can delete it at any moment if they don’t like it without losing a cent. Free apps aim to decrease customer acquisition costs and increase user engagement.
Free apps have higher download rates and there is no surprise — most users want to test the app before opening their wallets for more. No payment upfront means it’s easier to start using the app and gradually warm to the idea of paying money.
However, ‘free’ doesn’t mean you can’t make money from free apps 😉 Let’s talk about all the best app monetization strategies.
Talking about common monetization strategies we should mention the freemium model of monetization. Freemium apps can be downloaded free of charge. However, some of the finer premium features are unavailable and locked behind the paywall. So, for an additional charge users can unlock those premium features. Hence the name: free + premium.
Freemium apps have more downloads and attract more users because people don’t like to pay money blindly. Consequently, paid apps with no trial period have fewer downloads.
Also, the market is full of free apps. In these circumstances, users might think that a paid app must deliver an experience that is self-evidently superior to free apps. That’s a high bar to pass and user’s disappointment might be harmful to otherwise fine products. Showing the essential features of your app freely will clear up the confusion and motivate customers to buy.
According to Statista research in 2024, the best monetization strategy is advertising. But while advertising is the most popular app monetization model, it is, by no means, the only one. It is not even the best solution sometimes. Let’s consider other free app monetization options except different kinds of advertising, including video ads.
This app monetization strategy is based on paying to use the app. A person is asked to subscribe after installing the app. Often the app offers a trial period — several days of free access to the app so that customers understand what value the app brings to them. The experience of mobile app development in various industries shows that the model is effective.
👍 Paid subscriptions are especially suitable for startups in education and entertainment:
The mobile app of Netflix, one of the largest streaming services, works on a paid subscription model. With this model, a customer gets access to all content on the platform. The price depends on the subscription period if the user pays for a longer period, they receive a discount.
Also, the subscription model is implemented in dating apps like Tinder, Bumble, and Hinge. By subscribing, users can get profile boosts, unlimited likes, advanced filters, and so on. Check out our article to learn more about dating app development and its monetization strategies.
Another example of how free apps make money with a subscription is EWA, a service for learning foreign languages that has a free three-day trial. The subscription allows choosing only one language to learn: English or Spanish. Subscribed users get access to movies, books, and other tools to expand their vocabulary.
Like Netflix, the subscription model price varies depending on the number of months. This motivates people to use the product longer. Businesses, in their turn, get money upfront, can engage in long-term planning, and don’t spend additional resources on subscriber retention.
In general, subscription is one of the easiest ways of monetization. However, people pay their money only when they understand the value of the product. Massive advertising or a collaboration with a major brand might help.
We have experience in developing apps with subscriptions, and we will tell you about two of them — Contentplace and IPTV app.
Contentplace
A service for selling video content called Contentplace is a hybrid of Vimeo and Shutterstock. Here, registered users pay for a subscription and download a limited number of videos for personal and commercial purposes.
Initially, the client wanted to offer about 30 different plans, but we proposed 3 to make the choice easier.
Users can choose between monthly and annual subscriptions
When the service launched, it turned out that we made the right decision, three subscription plans were exactly what users needed.
IPTV app
The customer wanted to build an application that would combine dozens of streaming services and TV channels into one application. The user could purchase a personalized playlist from a reseller and upload the file to the app.
We developed an IPTV application that streams content over the Internet. These applications operate in an isolated ecosystem, so users can upload links the content.
The product has two versions — mobile and TV app
The application combines 2 types of monetization, subscription and advertising. Advertisements in the free version of the application appear in the form of banners and videos. And if the user wants to use the application without ads, they can buy a premium subscription. The payment is one-time.
Often apps make money by having a paid and a free version. Users have free access to basic features but can pay if they want advanced tools It can be a one-time in-app purchase like buying a particular movie or lecture in the app. Sometimes, features are available after paying for the subscription. For example, the photo editor may charge an additional fee for individual filters.
👍 One can make money on mobile applications by in-app purchases of digital products in these cases:
One example of how free apps make money this way is the corporate messenger Slack, which is actively used around the world. There is a completely free version that is enough for small projects. You can store 10,000 messages in your correspondence history and 5GB of attachments, as well as make one-on-one voice and video calls for free. If you need to store more information, make video conferences, and integrate other applications, there are several paid plans with advanced features.
Many corporate services work in a similar way: Trello, Asana, and Jira.
The Workout Trainer fitness app works similarly. The free version has photos, voice instructions, and a workout timer. For an additional fee, you can do video workouts and get a comprehensive program for several weeks.
The biggest risk for mobile app development using this business model is that the free version will be enough for users. Then the paid products will not be in demand. To avoid that, it is important to carefully engage in analytics — find out what exactly the target audience is ready to pay for. If you offer relevant paid services, the app will make money without ads.
We also know how to work with this monetization model, and our portfolio has projects involving the purchase of digital products.
Dosis
We made the design of a streaming platform for watching movies and series. The client wanted to combine 3 unusual features: a crypto wallet, a marketplace, and donations to creators.
The marketplace section with movies and other products from creators
Since not everyone can buy cryptocurrency, the client suggested adding tasks for rewards. With ROLY cryptocurrency, users can buy NFT and merchandise from creators and movies/series they want to watch.
Lead generation service
The client had a database of 60 million contacts and wanted to develop a service that would help companies find leads.
For easy search, we implemented a search engine that would provide results as you entered your query. We also developed a contact verification system so that the platform could automatically delete dead and broken emails.
Users can choose the number of emails they want to verify and buy one of 4 verification packages.
Socially important nonprofit projects also have their own digital products. In many cases, these apps make money without ads. In order to make the project profitable, they often have sponsors or engage in crowdfunding.
👍 Here are some company examples that can work with this mobile app monetization method:
Crowdfunding supports the work of the “Life Gift“ fund app. The service helps to coordinate people willing to cooperate with the foundation. You can become a volunteer, a blood donor, or donate any amount of money. The earned money goes to help those in need, as well as to support the resources of the foundation itself, in particular, the app.
One more example is the World Wildlife Fund. It is one of the largest independent environmental organizations. It has many mobile applications. One of the most popular is an educational one called WWF Amazing Planet. Informative and entertaining news from the world of wildlife is available in the form of articles, videos, and photos. WWF projects have many major sponsors, both individuals and corporations. The Foundation earns money via donations of any size from anyone as well.
The nonprofit segment is quite limited, so this monetization method is quite rare. But if you have a socially important initiative that needs the development of a mobile app, you can try to earn money from the community or find a big sponsor.️
Using service fees is another answer to how free apps make money without ads. This is relevant to digital products that mediate between people or organizations.
👍 Service fees will be suitable for:
Look at these top-grossing apps: Upwork and Revolut.
The professional marketplace Upwork works with service fees. The platform charges a 3% commission on customer payments. Freelancers are charged 5%, 10%, or 20% depending on the project budget.
This business model works very well in such applications. Marketplaces make finding clients and freelancers more convenient, and people are ready to pay a commission fee.
Often banking apps make money on service fees. Revolut is a good example. The app charges a transaction fee, for example, for international transfers or cryptocurrency purchases and sales. Since the commission is small and the app is simple and user-friendly, users don’t mind the service fee. The app has been successful for several years.
Want to learn more about mobile banking trends? Follow the link below ⬇️
Mobile app monetization with service fees is becoming increasingly popular. In 2022, the delivery service Delivery Club began charging customers a commission despite the fact that the company charges restaurants too.
Having introduced the fee, the company faced discontent from the users. Representatives of the company commented on the situation, according to their words, the fees charged to restaurants go to the marketing needs, and the charges from customers are for product improvements.
A service charge is a good idea if it’s not too big and the app is really user-friendly. People are willing to pay for a digital product to save time and effort. This means that such apps make money without ads quite easily.
At Purrweb, we once developed an app that makes money on service fees. It was a freelance photographer marketplace. You can read about the development process and how we dealt with the “ready-made” design in our business case.
According to 2024 stats, 60% of apps share user data with third parties. This is a legitimate practice — the data is encrypted. It is impersonal, and one can only extract general statistics from it. Basically, this information helps marketers choose the audience for their products and show more relevant ads. A lot of entrepreneurs make money from free apps without using extensive advertising — they probably make money from free apps with the help of user data.
👍 Such a model will suit you if you have:
For example, there’s a completely free messenger with no advertising WhatsApp. The company can provide unlimited communication services for free because it collects and transmits user data to Facebook. Information about the country of residence, type of device, and time of access to the network can then be used on other platforms.
Many apps make money from user data by combining it with other business models. The dating service Tinder also makes money from users’ data, in addition to paid premium accounts.
In case an app makes money from users’ data, the product can be made completely free. This is good for app development for the widest possible audience. That said, it’s important to carefully monitor security systems to avoid leaks. You should also write a clear and transparent user agreement to inform people in advance about the use of their data.
Free apps have several ways to get monetized. But sometimes, product owners don’t know all the pitfalls of monetization strategies. We collected common mistakes a product owner should avoid to make their app successful.
Mistake 1. No market research.
If you don’t define and research your market niche, then, you don’t know your potential audience. And sometimes the market is oversaturated with apps of the same niche. Analyze your potential users to make money from free apps.
Mistake 2. Stopping at in-app referral ads.
Messages, video ads, and pop-ups are just an aspect of digital affiliate marketing. You can find other channels that would be effective at reaching users. Use at least one digital marketing channel to announce updates — it can include social media, push notifications, or email.
Mistake 3. Going in without a monetization strategy.
While creating free mobile apps, a product owner should think about the free app monetization strategy beforehand to earn revenue. It’s possible to combine different monetization strategies and then choose the profitable one. Integrate a way to earn money from the free app as smoothly as possible.
How do free apps make money without ads? This article hopefully gives you plenty of options to choose from. Make your choice based on your startup field, marketing strategy, and your target audience. There are no universal solutions, but here are our recommendations:
If you’ve already identified the model with which your app makes money, it’s time to move to development. If you haven’t decided on the option model yet, we will advise and help you find the best one. Don’t worry, there’s always an answer to ‘How do free apps make money without ads?’
The Purrweb team has been helping startups develop MVPs and bring them to market for 10 years already. We will be glad to advise you on mobile app development services! Fill in the form below and we’ll get back to you within 24 hours.
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There are several ways for free apps to make money without ads: paid subscription, purchase of digital products in the app, sponsorship and crowdfunding, service fees, and making money from user data.
The average profit of a free app can range from $5,000 to $500,000 per month. But only 20% of apps bring a high profit because of their quality and 75-80% of apps are not needed.
If the app has high quality and users can download it for free, you have every chance of success. It might be useful for your project to use different app monetization strategies and decide which is better. About 24% of users would better use free apps with in-app purchases rather than paid apps — free apps can certainly help entrepreneurs make money.
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