Once, just building an app was the biggest challenge. Now, with powerful frameworks and AI at our fingertips, the toughest task is turning that app into a sustainable business.

So how do you actually make money from your app? In this blog article, I will break down the most popular monetisation models and explore their pros and cons.

Freemium

With the Freemium model, users can access a version of the app with basic features for free, but they must pay to gain access to premium functionality.

Examples: Spotify, Duolingo, other productivity and educational apps

Pros

• low barrier to entry for new users; users can try the app before committing to paying for it
• scalable monetisation model
• can help generate revenue from users who originally did not plan on paying

Cons

• requires a strong value proposition to convert free users to paying ones
• if the free version is not good enough, users will not want to upgrade to the premium version
• some users might never pay for the premium version
• no continuous revenue stream from individual users if the fee for the premium version is not tied to a subscription

In-App Purchases

Users are offered virtual goods, extra features, or digital content for a fee within the app. These digital goods can be consumables (such as virtual currency within the app) or non-consumables (eg. unlocking a bonus level in a game).

Examples: mobile games and editing apps

Pros

• high revenue potential from engaged users since users can make multiple purchases
• can be strategically offered to „help“ users (eg. in a mobile game)
• very flexible as a wide range of features, content, etc. can be offered to users

Cons

• must be carefully designed to avoid being “pay-to-win” or manipulative
• a high percentage of users might not make any purchases at all

Subscription

Users pay a recurring fee (weekly, monthly, or annually) to access content or services within the app.

Examples: Netflix, other streaming platforms

Pros

• predictable, recurring revenue stream
• encourages long-term user engagement
• a free trial can be offered so users can try the app first
• easy for users to keep staying subscribed

Cons

• can be expensive for users
• users may cancel their subscription if the perceived value isn’t consistently maintained
• difficult to gather a loyal user base that is willing to pay regularly for the app

In-App Advertisements

Users can use the app for free, but they have to regularly watch or see ads.

Examples: Instagram, other social media apps, free mobile games

Pros

• users do not have to pay a fee to use the app
• good for free apps with large user bases
• very popular monetisation strategy
• can be implemented in the form of banners, (rewarded) videos, games, native ads, and more

Cons

• poorly integrated ads, as well as too many ads, can hurt the user experience
• ad fatigue; low engagement with ads
• your app might include in-app ads for your competitors
• low income per user so you need a large user base

One-Time Purchase

Users pay a one-time fee to download the app.

Examples: GoodNotes 5, other productivity apps, some mobile games

Pros

• immediate revenue from each download
• no annoying ads or extra in-app fees for users

Cons

• high barrier to entry for new users; users cannot try the app before paying
• difficult to compete with free alternatives
• no continuous revenue stream from individual users
• not as commonly implemented anymore; users are too used to free apps

Conclusion

Now that we have common monetisation strategies laid out, the next step is to figure out which one will work for your app. Monetising an app in 2025 isn’t just about picking a strategy off a list – it really comes down to understanding what your app actually does, how often people will use it, and who it’s for. If you’re clear on those things, choosing a monetisation model becomes way more straightforward.

Moreover, it is also smart to look at what others in your niche are doing. You don’t need to reinvent the wheel – established apps in your category likely use strategies that have already been tested and proven to work. Learn from them, but make sure you adapt them to fit your own app’s goals and audience.

That said, don’t be afraid to talk to your users. People often underestimate the time and effort it takes to build and maintain an app, especially in a world flooded with free options. Go and ask your potential customers directly what they would be willing to pay for your app.

Also, keep in mind that you can even choose to combine multiple monetisation strategies, such as offering a free version of your app with ads, along with a premium subscription.

Lastly, implementing analytics within your app can help you better understand user behaviour so you can continuously refine your monetisation approach. In the end, there is no perfect formula, but with the right mix of strategy, user insight, and experimentation, you will find what works best for your app.

Relevant Links

• https://www.publift.com/blog/app-monetization
• https://tipalti.com/resources/learn/app-monetization-guide/
• https://www.reddit.com/r/iOSProgramming/comments/1f5dm3d/best_strategy_to_monetize_app/?share_id=cQs0VahHToCzfQJNfL469&utm_content=2&utm_medium=ios_app&utm_name=ioscss&utm_source=share&utm_term=1&rdt=53071
• https://appbooster.com/en/blog/8-main-ways-to-earn-from-android-and-ios-app-monetization/
• https://www.applovin.com/guides/mobile-app-monetization/

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This article was written as part of an academic assignment and is intended solely for educational and informational purposes. It does not constitute professional advice of any kind. Readers are encouraged to consult qualified professionals before making any business decisions. The author accepts no liability for any loss or damage arising from the use of this content.