Posts Tagged ‘shozu’

ShoZu comments on going from free to paid in the app store

Wednesday, July 29th, 2009

Last week, we wrote about ShoZu that started charging for their former free application in the Apple App Store. We had a look at the impact of this on their ranking, check out the previous post for more info.

We talked to ShoZu’s Jennifer Grenz, Vice President of Products and Marketing, who made some interesting comments on the move to go paid.

Why did ShoZu go for a paid model in the app store?

App stores are where the customers are, and where they’re going.  So it’s the perfect place to find and engage users, and get paid.

App stores allow us to better deliver our app to users, with more frequent updates than would otherwise be possible with preloads and other methods. So it’s the best place to deliver and support our users.We believe that biz models for mobile app developers will increasingly include a paid or freemium option that balances other forms of revenue (advertising, subscription, sponsorships). We believe this is where developers are headed, and that this is the winning model for developers in the long term.

Even more importantly, having a user pay for our apps compels us to further invest in our customers with innovation in technology and partnerships.  There’s an implied informal contract between us and the customers… that, since they’ve paid, we need to continue to add significant value.

What was the impact after you started charging for the app?

We have not seen a massive drop-off in iPhone downloads, and we’re happy with the transition and the level of acceptance.

We love to hear comments back from developers that are upfront trying these different business models today for mobile apps. Thanks to ShoZu for sharing this.

Recap of this week’s app store news

Saturday, July 25th, 2009
  • Microsoft’s app store will also support media players.
  • HTC is rumored to put Android of 50% of their handsets in 2010.
  • Sony is launching an app store for the PSP an the end of this year.
  • Navigon has launched turn-by-turn navigation in the US.
  • The growth of the Apple App Store is largest outside the US.
  • Going from free to paid in the Apple App Store: Shozu example.
  • Blackberry App World will go live in Europe on July 31st.

From free to paid in the Apple App Store: Shozu example

Tuesday, July 21st, 2009

Developers are trying different models to monetize their applications in app stores. There are many possibilities: one-off paid apps, subscriptions, trials, add-ons, advertising, and combinations of those. Since there are so many options, we decided to take a look at one example of an application that is trying different models.

Shozu, an application to share media, is one of the applications that went from free to a one-off paid model. At first, the application was available free of charge in the social networking category in the Apple App Store. On the 6th of June, the company decided to make the app paid and charge a one-off fee of $4.99.

To analyze the impact of this change, we made an overview of the rank Shozu had in the social networking category in both US and UK. In both countries, the app had a stable rank around 30:

Shozu rank in Apple App Store US & UK

Shozu rank in Apple App Store US & UK

Then, on the 6th of June, Shozu started to charge for the application. This is how their rank developed in the paid section from this moment:

Shozu rank in Apple App Store US & UK

Shozu rank in Apple App Store US & UK

Not surprisingly, the app got a lower rank in the US app store from the moment the $4.99 charge went live. From a rank around 30, it is now the number 59 ranked paid social networking app in the US. Interestingly enough, this decrease in rank was not as big in the UK at all. From a rank around 30, it is now the number 32 ranked paid social networking app in the UK.

We identified the same trend in other European countries. So what does this mean? Roughly, we think there are two options that are quite contradicting:

  1. European iPhone users are more willing to pay for an app like Shozu than US users, so Shozu was able to maintain a high ranking;
  2. European iPhone users buy less applications than US users, so it is easier to obtain a high paid ranking here.

We haven’t got the answer yet on this, and it’s also too limited to judge on just one example. Nevertheless, it’s very interesting to figure out if there are differences in the buying behavior of US and European consumers in the different app stores. We are working on detailed reports to provide more insights on this in the coming months.

Update: Shozu also started to use Apple’s In App Billing for its application today.