I am in the process of monetizing my medical app and want to know if offering a monthly subscription to access further content would be beneficial or would simply offering IAP's with notifications to drive sales be better.
Freemium revenue for mobile apps was up 211 percent last year (2013), according to a report from mobile analytics company App Annie and IDC.
83 percent of the top thousand apps on each of the iOS app store and Google Play — monetize via freemium, an even bigger proportion of revenue generated by those top 2,000 apps arrives via freemium: 92 percent.
Naturally, the key to success as an app developer who uses the freemium model is getting as large a percentage of your free users buying something as possible. That’s a significant challenge.
You have to do what makes the most sense for your app and the users on it. You must create value for the user and make it compelling for them to spend money on whatever you plan on offering.
In terms of viable it is tough to say because I don't know what your medical app does.
1. Look at the data from your app
2. Talk to your users about what they want
3. Look at what your competition is doing or others in a similar vertical
Short answer: You'll make more money with subscriptions, but you'll reach less people. The market is not shifting one way or another. You should combine both monetization pathways.
Long answer: You should approach this in a few ways:
1. See what you competitors do, both in the medical field and also in the information space that you're in. This means if you are offering a newsletter, find other industries that use newsletters and see how they are doing it. You will find that memberships are more about access and IAP are more about content.
2. MOST IMPORTANT: gauge where the value is in your offering. If the monthly subscription is access to a wealth of medical information, you should not do a subscription because most people will purchase it the first month, then cancel because they used it like an encyclopedia. This is better for IAP.
If you are doing a constant refresh, however, with high value adds for being a "member" then it's a great idea to do a membership because they're not only buying information, they're buying access.
That's the most important rule in membership marketing.
3. Be able to clearly define your value relative to a charge each month. The biggest problem is when someone sees that they have been billed monthly and ask themselves "why do I still have this?"
A good example would be a month you watch zero Netflix movies. You see the $9 charge and wonder why you still have it. But, the month that House of Cards comes out, that $9 is a no-brainer because you watched 15 hours of TV.
If you consistently provide value, the membership will be a slam dunk.
4. Similar to #2, membership is rarely a viable revenue model on it's own. You should treat it, especially in the medical field (high value demographic) as a way to prove your value, then provide exclusive access to premium content (In-app purchase). Your conversion rates will be 10x what they would be if you tried to sell that premium content to a non-member prospect and you'll be able to convert more non-members to being subscribers bc of the price point.
If you want to see how I do it, check out Bluecloud Select http://www.bluecloudsolutions.com/bluecloud-select
Good luck! Stay healthy :)
As I often advise startups, there is never a rule; especially with consumer facing and modern technologies. However, to get you in the right direction regarding monetization, I usually tell my audience a good differentiator between subscription and inapp (unlock) should be frequency and type of use.
If you have a static knowledge base you're giving, subscription is best.
Non-consumable in-apps should only be used if you can structure your startup to deliver new ones regularly.
Consumable in-apps should be for something that gets executed, a function, therefore not good for content but perhaps some kind of medical analysis?
Also, don't forget subscriptions are much more lucrative now but don't be tricked into picking what makes the most money without keeping in mind what is best for your offering.
Obviously more than glad to further discuss if you can give me specific answers in order to find a winning strategy.
While most of the experts that replied all have valid points, the main issue I see is that pushing any app down the monetize by paid ads method is in high risk right now because the next version of IOS will block ads, Apple is on the war path to kill ads on their devices. Why is that a problem? what % does apple represent in your niche? greater than 50%.
Subscription is the best path in my opinion, and yes the industry is shifting towards that model, not because thats what the users want, but it makes more sense for a business to offer subscription based services.
I could provide a more tailored answer if I knew more about your app.