75% of Developers Don’t Make Money from Their Apps

Sites include Apple.com , appsfire.com , canalys.com . Published on December 6th, 2012. Written by Anthony West.

Applications development was supposed to be digital gold for anyone who had a modicum of coding skills but in the end this has proved to be the biggest weakness in an opportunity that now employs thousands. Thanks to Apple and its iTunes store, developers were able to make small applications that do mundane things like creating birthday alerts, to more complex tasks like picking stock. In the intervening years other app stores have sprung up—most notably Google Play and the number of apps available to users now span in the millions.

But this plethora of apps hasn’t translated into lots of income for most developers. According to insights and analytics company Canalys, only 25% of developers make a serious income from applications. Across the various app stores, the 25% account for more than half of the revenues paid to developers. Canalys looked at paid-for downloads and in-app purchases over a 20 day period and found that more than $60 million paid out when to a small portion of developers.

Games developers seem to be the biggest winners and small functional apps that have dominated modern tech use all seem to have a free element to them. The only notable exception in the list of big-earning developers was Pandora who has a streaming radio app. Zynga, EA, Kabam, Disney and others all dominate the space.

This is how Canalys broke down the presence of games on the top selling charts of both Apple and Google’s app stores: “During the same period, games accounted for 145 on average of the top 300 paid apps in the Apple App Store and 116 of Google Play’s top 300 paid apps. Games also accounted for 94 of the top 300 listed free apps for Apple and 110 for Google Play.”

Money sells more apps

It should be obvious looking on that the developers who have the strongest financial backing get more eyeballs and thus more downloads. Disney for instance has tremendous resources and mindshare so pretty much any app it develops will be marketed just right. Small scale developers haven’t got this luxury and in many cases they don’t get the chance to showcase their developed applications. Apple estimates that more than 60% of the apps in its iTunes store have never been downloaded. This means that across all application stores, there are literally millions of apps that are not being seen by the consumer. Indeed, services like Appsfire were created to meet this very need and without it many app developers would have to go back to the day job.

One can hardly blame the app store themselves because in most cases compensation is even across the board. Create an app, sell it and we’ll split the profits; that is pretty much how all apps ecosystems are set up. The challenge for developers then will be sussing out the most effective way to create and market apps that gain traction quickly—copycatting won’t do in this instance.

The skewed distribution of app development income is yet more evidence that in a crowded space, differentiation is your friend, not your enemy.