Do you have a free version app on your hands but not a solid revenue idea for it? Or maybe you’re trying to read through the best mobile app monetization methods. App monetization can be a tricky one, even for those with tons of experience. So if you’ve been struggling with the concept of app monetization, freemium models, or in-app purchases for revenue, this one’s for you!
The freemium app model is one of the best monetization models out there and can be a game-changer if you know how to implement it in your free app. With proven success rates across all app stores, it’s time for you to learn how to maximize your profit with freemium apps!
But before you can make that extra cash, ask yourself this…
What is a freemium monetization model?
The freemium monetization model is a business strategy that offers a basic version of a product or service for free while charging for premium features or upgrades. This approach allows users to try out the product in a free version and become familiar with its features before committing to a purchase.
The good news is that there are numerous types of freemium models! The main three types of freemium app models are:
- Advertising
- In-app purchases
- In-app subscriptions
The ad-based freemium app model offers a free version of the app with ads, which can be removed by paying for the premium version. The in-app purchase model allows users to purchase virtual goods or services within the app. Think extra cloud storage or maybe some in-game purchases in your favorite mobile game!
The in-app subscription model offers users access to premium content or features for a monthly or yearly fee. In 2025, subscriptions have become dominant – 82% of non-gaming apps now use subscription models in some form, and while only 4% of total apps use subscriptions, they account for 45% of global app revenue.
Types of freemium business model
Freemium models aren’t exactly a copy-paste of the same scheme, giving it room for creativity and competition. Businesses and app developers can give themselves an edge by approaching the freemium models differently and appealing to a larger audience.
Paywall model
Have you ever come across a free trial in apps? Did Netflix just come to mind with its 30-day free trial? Great, you’re already familiar with a paywall model. In the paywall model, app monetization happens when these apps offer users a limited amount of free access before asking users to pay to access additional content.
Interestingly, data from RevenueCat’s 2025 report shows that hard paywalls often outperform soft freemium approaches: 78% of users start a trial in the first week with a hard paywall versus just 45% with freemium, and monthly retention is 12.8% for hard paywalls compared to 9.3% for freemium.
Check out our Paywall Library to draw some inspiration if you decide to design your own paywall, or use Adapty’s AI Paywall Generator to create high-converting paywalls automatically.
Limited feature model
Imagine the limited feature model as a more relaxed sibling of the paywall model. This monetization model offers a basic version of the product or service for free while charging for premium features or functionality. For example, a photo editing app may offer basic filters for free, but charge for more advanced editing tools.
The key is finding the right balance. The “10-70-20 rule” suggests offering 10% of features for free, gating 70% behind a paywall, and reserving 20% for power users – though this varies significantly by app category. Always A/B test your feature gates to find the optimal balance.
Advertising model
This freemium model offers a free version of the product or service that includes ads, which can be removed by paying for the premium version. There can’t be a bigger example of a successful advertising model than YouTube itself. As one of the most popular apps across the globe, YouTube earned over $31 billion in 2024 from pure ad revenue – and continues to grow.
With global mobile ad spending projected to hit $390 billion in 2025, an advertising model done right can generate substantial revenue. However, keep in mind that iOS 14.5+ privacy changes have reduced ad targeting effectiveness significantly, making hybrid models increasingly attractive.
Reverse trial model
A newer approach gaining traction in 2024-2025 is the reverse trial. Instead of starting users on a limited free version, you give them full premium access for a limited time, then downgrade them to the free tier. This showcases your premium value upfront and creates stronger motivation to subscribe.
Apps like Ladder and Strava have successfully implemented reverse trials. The psychology is powerful: users experience loss aversion when premium features are taken away, making them more likely to convert than if they’d never experienced those features.
Hybrid model
In 2025, 35% of apps now mix subscriptions with consumables or lifetime purchases – hybrid monetization has become the new standard. Instead of choosing between ads, subscriptions, or IAP, successful apps combine multiple revenue streams.
For example:
- YouTube: Free with ads + Premium subscription + Super Chat purchases
- Spotify: Ad-supported free tier + Premium subscription
- Gaming apps: Free-to-play + IAP + Rewarded video ads + Battle passes
Hybrid models allow you to monetize different user segments appropriately: non-paying users through ads, casual users through one-time purchases, and power users through subscriptions.
Advantages of using the freemium monetization model
Now that you know the types of freemium monetization models, it’s time to bring out the big guns. I’m listing the advantages of using the freemium model, so you know how it’s all just a smart play.
Increased user acquisition
When your app isn’t blocked behind the scary “pay before you use” schemes, you open yourself up to a larger audience. This audience has a better chance of converting into actual, paid users, given every other factor is in your favor.
Let’s be honest, would you rather pay for a strange service that could really disappoint you or go for a free version somewhere else?
The numbers back this up: as of 2025, over 95% of apps on Google Play and Apple Store are free to download. Only 4.9% of iOS apps and 3.1% of Android apps require upfront payment. Free apps simply dominate user acquisition.
Lower cost of customer acquisition
Keep in mind that the freemium model isn’t just a way to monetize your users but primarily a way to acquire them. When you compare the cost of traditional marketing acquisitions with those of a freemium, you’ll find that the latter is often more cost-effective.
Your potential audience has easy and free access to your services and they can upgrade anytime they want! Sign-up rates for freemium products (around 9%) are nearly double those of free-trial products (around 5%), because there’s no time pressure or commitment required.
Improved customer retention
One of the most crucial parts of your mobile app monetization is having great customer retention. You don’t want users to bounce away from your app because that’ll lead to no in-app purchases, little to no app revenue, or any paying users!
Freemium models ensure that users pay for a premium app after they’ve spent time using and enjoying it. That’s how you’ll convert a free version into a paid app. However, note that hard paywall apps actually show higher monthly retention (12.8% median) than freemium apps (9.3% median) – users who commit upfront tend to be more engaged.
Higher lifetime value of customers
Users who convert into customers by paying for the premium features are very likely to create an income stream for businesses and app developers! But that depends on the value your premium features provide to these customers.
For instance, take Dropbox into account. As the leading cloud storage freemium app, it charges users based on their space needs. To ensure you keep having that space, you’ll need to keep paying their monthly fee which creates a steady income for Dropbox. The company now generates over $2.5 billion in annual revenue.
Freemium conversion rate benchmarks
Before implementing a freemium strategy, you need to know what “good” looks like. Here are the benchmarks based on 2024-2025 industry data:
Conversion rate benchmarks by model type
| Model Type | Good Conversion | Great Conversion | Examples |
|---|---|---|---|
| Freemium (self-serve) | 3-5% | 6-8% | Canva, Trello, Typeform |
| Freemium (sales-assist) | 5-7% | 10-15% | Airtable, GitLab, HubSpot |
| Free trial (opt-in) | 8-12% | 15-25% | Shopify, Intercom |
| Free trial (opt-out) | 40-50% | 50%+ | Services requiring payment upfront |
Top performers to benchmark against
| Company | Conversion Rate | Strategy |
|---|---|---|
| Spotify | 46% | Freemium + contextual upgrade prompts |
| Slack | 30% | Freemium + usage-based limits |
| Zoom | High (undisclosed) | Freemium + time limits |
| Dropbox | ~4% | Freemium + storage limits |
Don’t be discouraged if you’re below these numbers initially. About 20% of freemium products see conversion rates below 2.5%, and a third see between 2.5-5%. The key is continuous optimization through A/B testing.
Best practices for implementing freemium monetization
Freemium apps are one of the most common app monetization strategies, for all the right reasons. It helps create a trickling stream of money from in-app purchases and even in-app advertising. But to reach that stage, you’ll need planning and lots of it.
Here are some best practices to implement a successful freemium monetization model in your mobile app:
Step 1: Conduct market research
Conducting market research is a crucial first step in implementing a successful freemium monetization strategy. By understanding the needs and behaviors of your target audience, you can create a freemium model that effectively attracts and retains users while generating a revenue stream.
According to industry data, companies that conduct market research before implementing a freemium strategy are significantly more successful at app monetization and converting free users into paying customers. One company that has implemented this best practice is Spotify.
They conducted extensive market research to understand the preferences and behaviors of their target audience. That helped them design a freemium model that provided value to users while generating revenue through advertising and premium subscriptions.
This approach has helped Spotify to become one of the most successful music streaming services, with over 675 million monthly active users and 263 million premium subscribers as of 2025 – achieving an impressive 46% conversion rate from free to paid. Similarly, Dropbox identified its target audience’s pain points and found that people were frustrated with the difficulty of sharing large files and that they valued the convenience of cloud storage. That’s how Dropbox grew 3900% in 15 months!
Step 2: Define the freemium features
After you’ve done your market research to find your target audience’s pain points, it’s time to define a solution that targets those points! You must decide which features to offer for free and which to reserve for premium subscribers. The free features should provide enough value to encourage users to engage with the app and consider upgrading to the premium version.
According to industry research, the majority of freemium app users state that they would be willing to pay for additional features if they provide clear value. Here are some examples of freemium features to spark some ideas:
| Company | Free Features | Paid Features |
|---|---|---|
| Canva | Access to many design templates and elements | Access to premium templates, resize designs, upload custom fonts, brand kit, and access pro design elements |
| Evernote | Take notes, save web pages, and sync across devices | More storage space, ability to search for text within PDFs and Office docs, offline access to notes, and priority customer support |
| Create a profile, connect with other professionals, and search for jobs | Send messages to people outside your network, access premium insights, see who has viewed your profile, and access online learning courses | |
| Duolingo | Core lessons with ads, limited hearts | Ad-free experience, unlimited hearts, progress tracking, offline access |
| Zoom | 40-minute meeting limit, 100 participants | Unlimited meeting duration, up to 1,000 participants, cloud recording |
Step 3: Choose the right trial strategy
Trial strategy significantly impacts conversion rates. Here’s what the 2025 data shows:
| Trial Length | Conversion Rate | Cancellation Rate | Best For |
|---|---|---|---|
| 3 days | Higher | 26% | Gaming, quick-value apps |
| 7 days | ~40% | Moderate | Most apps (optimal balance) |
| 14 days | Lower | Higher | Complex products |
| 30+ days | ~30% | 51% | Enterprise, B2B |
Key insight: In 2024, over half (52%) of all trials were offered for 5-9 days, up from 48.5% in 2023. Shorter trials are trending because they create urgency and faster decision-making. Gaming apps overwhelmingly favor very short trials – 96.3% are 4 days or less.
Consider also when users start trials:
- With hard paywalls: 78% start a trial in the first week
- With freemium: Only 45% start in the first week
- The vast majority of trial conversions happen on Day 0 of install
Step 4: Create a seamless user experience
Creating a seamless user experience is critical in implementing a successful freemium monetization strategy. Companies must ensure that the user experience is seamless and frictionless, making it easy for users to upgrade to the premium version. Confusing or frustrating user experiences can discourage users from upgrading and ultimately hurt revenue.
One of the most prominent apps that offer seamless user experiences is Grammarly. Grammarly’s free version offers basic grammar and spelling checks, while the premium version offers additional features such as advanced suggestions for clarity and tone and plagiarism detection. The interface and features all work seamlessly together, making for an incredible experience for users.
63% of customers say that user onboarding is a crucial aspect in their buying decisions. Your onboarding should:
- Demonstrate premium feature benefits within the free experience
- Guide users to their “aha moment” quickly
- Use contextual prompts (like Slack does) rather than aggressive upsells
Step 5: Set competitive prices
The truth is, you’re not alone in your niche. There will always be apps that have more downloads, better reviews and credibility, and sometimes a better appeal to users! So how do you overcome this competition and ensure you’re on the top?
You offer prices they can’t refuse, that’s what!
If your services are similar to the competition and the market is saturated with many apps competing for the same target audience, use your prices as attractive bait. Research the average prices charged by your main competition, ensure your services are justified with theirs, and set a competitively lower price for all in-app purchases. But don’t go too low or customers might think you’re not good enough!
2025 pricing insight: Higher-priced subscriptions actually have higher trial conversion rates than mid and lower-priced options. Premium pricing signals quality and attracts more committed users. According to Adapty’s State of In-App Subscriptions 2025, premium-priced plans outperform lower-tier options by 200-300% in LTV.
Also consider regional pricing – users in different countries have vastly different willingness to pay. In the Netherlands, users pay 62% more than in the US for the same subscriptions, while in Turkey, they pay almost 3.5x less.
Step 6: Use analytics to optimize revenue
The magic now comes down to the numbers. User analytics can tell you everything you need to know about how your freemium model and how your in-app purchases are performing. Keep in mind that performance isn’t ever a one-time thing.
You need to have your app analyzed every few months and identify user patterns and behavior. This helps you understand what’s working and what you need to get rid of. If you’re a new freemium app, this can help you formulate the correct strategy.
It’s also important to make sure that your analytical data is accurate and easy to digest. In this case, you may have a look at Adapty, which not only will provide you with comprehensive subscription analytics but will also help grow your app’s revenue through running price A/B tests.
Key metrics to track:
- Free-to-paid conversion rate (benchmark: 3-5% for self-serve)
- Time to conversion (most conversions happen within 7 days or after 30+ days)
- Feature engagement before conversion
- Churn rate by cohort and acquisition source
- LTV by subscription type (weekly vs monthly vs annual)
What are the best freemium strategies for mobile apps?
If there’s a recurring theme in this article so far, it’s the fact that app monetization is only successful when you implement the right strategies into your app! Here are some incredible strategies and tools you could implement to boost in-app purchases in your freemium app:
In-app purchases
In-app purchases are the most common freemium strategy used by mobile app developers to generate revenue. The global in-app purchase market was valued at $209 billion in 2024 and is projected to reach $257 billion in 2025, with a CAGR of 23%. By 2029, the market is expected to reach $657 billion.
Nearly half of all mobile app revenue now comes from in-app purchases, making IAP essential for most freemium strategies.
This strategy involves offering a free app with basic features and functionalities while offering additional features or content for purchase within the app. In other words, users can download and use the app for free, but they can purchase additional features or virtual items within the app.
In-app purchases can take many forms such as:
- Consumables: Extra lives, coins, energy (Candy Crush, mobile games)
- Non-consumables: Ad removal, premium themes, one-time content unlocks
- Auto-renewable subscriptions: Netflix, Spotify Premium
- Non-renewing subscriptions: Seasonal passes, time-limited access
Advertisements
This is something everyone knows all too well. Perhaps our favorite mobile apps have inconvenient ads placed throughout them! Advertisements are another common freemium strategy where your free version app has ad placements instead of in-app purchases. Often, the ad placement can be sold to advertisers or offered on a profit-sharing scheme.
Global mobile ad spending is projected to hit $390 billion in 2025, highlighting the significant revenue potential of advertising as a freemium strategy. As of 2025, in-app advertising remains the most commonly used monetization model, applied to 31% of apps globally.
However, there are important considerations:
- iOS 14.5+ privacy changes have reduced ad targeting effectiveness significantly
- User segmentation matters: High-value users (top 10% by engagement) often generate 40-60% of ad revenue—over-monetizing them with ads can drive them to competitors
- Balance is crucial: Too many ads hurt retention and can push users away entirely
Ad formats to consider:
- Banner ads: Low engagement but non-intrusive
- Interstitial ads: Higher revenue but can frustrate users
- Rewarded video ads: Win-win—users get rewards, developers get paid
- Native ads: Blend with content for better user experience
Trial periods
When I think of trial periods, I think of Netflix, Spotify, and Hulu! All these apps are billion-dollar companies and offer trial periods to lure in potential users. The trial period strategy involves offering a free trial period for the app’s premium features or content, after which users must pay a fee to continue using them.
Free trials can be an effective way to attract new users who may be hesitant to pay for a service upfront. By offering a free trial, users can test out the premium features of the app and determine if they are worth paying for.
2025 trial benchmarks by category:
| Category | Download-to-Trial Rate | Trial-to-Paid Rate |
|---|---|---|
| Business | 8.9% (highest) | High |
| Travel | Moderate | Highest |
| Health & Fitness | Moderate | High |
| Photo & Video | Moderate | Lowest |
Regional differences: North America has the highest download-to-trial conversion rate at 7.3%, while India and Southeast Asia have the lowest.
Referral programs
Referral programs aren’t as common as the other types I’ve mentioned above but they’re still a smart way to have your app make money. This strategy involves incentivizing users to refer new users to the app. When a user refers a new user who then downloads and uses the app, the referring user can receive a reward, such as access to premium features or virtual currency.
By incentivizing users to refer new users, app developers can increase the user base of the app and potentially generate more revenue. Referral programs can also help to increase user engagement, as users are motivated to use the app more frequently to earn rewards.
Let’s dissect Airbnb as an example of a referral program strategy. The company offered a referral program that gave users a travel credit when they refer a friend who signed up and completes a stay on the platform. This program helped Airbnb to grow its user base and increase revenue, and you can too!
Dropbox is another famous example – their referral program offering extra storage for both referrer and referee helped them achieve that legendary 3900% growth.
Cross-selling and up-selling
Cross-selling involves promoting related products or services to users who have already made a purchase or signed up for a free account. For example, a music streaming app might promote a premium subscription that includes access to exclusive content and features.
Up-selling involves promoting higher-priced versions of products or services to users who have already made a purchase or signed up for a free account. For example, a productivity app might offer a premium version with more features and functionality than the free version.
Zoom is one of the prime examples of upselling their service as their app monetization! Users can upgrade to a paid version of the app with more features, including longer meeting times and the ability to host more participants. Zoom now generates over $4.5 billion in annual revenue, driven significantly by its effective freemium-to-paid conversion strategy.
Timing matters:
- Most freemium conversions happen within 7 days (immediate need) or after 30+ days (habit formation)
- The 14-21 day period typically shows the lowest conversion rates
- Prompt upgrades when users hit feature limits or demonstrate high engagement
Gamification
Monetization and in-app purchases can be all fun and games, literally! Gamification is a freemium strategy that app developers use to encourage users to engage with their app by adding game-like elements and mechanics, such as points, badges, and leaderboards.
This strategy increases user retention and generates revenue by incentivizing users to upgrade to premium versions of the app. The success of gamification can also be seen in the broader gaming industry, which generated over $170 billion in revenue in 2024.
One example of a company that has successfully implemented gamification is Duolingo, a language-learning app that uses game-like features to keep users engaged and motivated. Users can earn points and progress through levels as they complete language lessons and exercises.
The app also offers rewards such as streaks and badges to encourage daily use. Duolingo offers a premium subscription that includes additional features such as offline access and ad-free learning. As of 2024, Duolingo has over 100 million monthly active users and generated $531 million in revenue in 2023 – a dramatic increase from $190 million just a few years prior, largely due to the success of its gamification strategy.
Weekly subscriptions
One of the biggest shifts in 2024-2025 is the rise of weekly subscriptions. According to Adapty’s State of In-App Subscriptions 2025, weekly plans now account for nearly 47% of all in-app subscription revenue – a 10% increase from the previous year.
Why weekly works:
- Lower commitment barrier: Users are more willing to try a $4.99/week subscription than commit to $49.99/year
- Higher total LTV: Despite higher churn, the volume of subscribers often results in higher realized LTV
- Regional preference: Weekly subscriptions dominate in LATAM (60% share) and MEA (53%)
- Category fit: Particularly effective in Productivity, Utilities, and Photo & Video apps
Consider offering multiple duration options and letting users self-select based on their commitment level.
Freemium strategies by app category
Different app categories require different freemium approaches. Here’s what works best in 2025:
| Category | Recommended Strategy | Trial Approach | Key Insight |
|---|---|---|---|
| Health & Fitness | Freemium + Annual focus | Mixed trial (56% use) | 67% of subscribers choose yearly—goal-driven users commit long-term |
| Gaming | Freemium + IAP + Ads | Very short trials (96% ≤4 days) | Hybrid monetization king; battle passes growing |
| Productivity | Freemium + Weekly/Annual | Feature-gated | Weekly subscriptions dominate (50%+ revenue) |
| Education | Freemium + Annual | Longer trials (5-9 days) | Goal-driven users, 80%+ prefer longer trials |
| Media/Entertainment | Hard paywall + Trial | 7-day trial | Content-driven; paywalls work well |
| Business | Free trial → Sales | 14-30 day trial | Highest download-to-trial rate (8.9%) |
| Photo & Video | Freemium + Weekly | Feature limits | Weekly plans dominate |
| Lifestyle | Freemium + Monthly | Mixed approach | Monthly plans perform well ($42.8 LTV) |
Hard paywall vs freemium: What the 2025 data shows
One of the most debated questions in app monetization is whether to use a hard paywall (requiring payment upfront) or a freemium model.
| Metric | Hard Paywall | Freemium |
|---|---|---|
| First-week trial start | 78% | 45% |
| Monthly retention (median) | 12.8% | 9.3% |
| User quality | Higher intent | Mixed intent |
| User acquisition cost | Higher | Lower |
| Best for | Content apps, premium services | Network effects, viral growth |
Key insight: “While hard paywall apps see faster conversions on average, the best freemium apps still achieve strong Day 0 conversion rates, proving that execution matters more than monetization model alone.”
When to choose hard paywall:
- Your content/service has clear, immediate value
- You’re in a content-driven category (news, entertainment)
- You need faster payback on acquisition spend
- Quality of users matters more than quantity
When to choose freemium:
- Your app benefits from network effects
- You’re validating product-market fit
- Lower CAC is critical for growth
- Users need time to experience value
Avoid the common mistakes in freemium models
It’s just as easy to make mistakes in developing your freemium app monetization model. The only way to catch your mistakes is to know what to look for. Here’s what to look out for when you’re strategizing your game plan:
Don’t offer too much for free
When users feel that they can access everything they need for free, they may not see the value in paying for additional features. Ask yourself this: if an app you love offers you everything you basically need for free with a few unnecessary additions for a premium price, would you pay for them?
It’s crucial to strike a balance between offering enough free features to encourage users to engage with the app and creating a clear value proposition for the premium version. When you’re devising your in-app purchase strategy, make sure that the premium version offers valuable features that aren’t available in the free version.
The “10-70-20 rule” suggests:
- 10% of features free (enough to demonstrate value)
- 70% behind paywall (core premium offering)
- 20% for power users (advanced/enterprise features)
However, always test this ratio – it varies significantly by category.
Overloading the app with ads
Earlier in this article, I mentioned the importance of having a seamless user experience as the core element that decides the fate of your app monetization strategy. And I’ll say it again here. Overloading the app with ads can and always will lead to a negative user experience.
The end result? Users abandon the app for a better alternative that values user experience.
While ads can be an effective way to generate revenue in the freemium model, it’s important to strike a balance between displaying enough ads to generate revenue and not pressing your user into a corner. When an app has too many ads, it can slow down the app’s performance, disrupt the user experience, and make it difficult for users to engage with the app.
Consider instead: Rewarded video ads offer a win-win – users choose to watch ads in exchange for in-app rewards, creating positive sentiment rather than frustration.
Lack of value in premium features
You’ll only pay for a service that you can justify the price and importance of. So will your users! Failing to provide value for paid features in your app is one way to screw up your mobile app monetization because there’s no incentive for users to pay you for anything.
If you want your mobile app monetization to roll in extra cash for you, glamorize the premium features and justify the price you’re selling it for. You might need to conduct extensive market research and find out what other apps are doing, what your target audience wants, and the market gap you can fill with your app.
Pro tip: Apps that show premium feature benefits within the free experience (e.g., “Upgrade to unlock this feature you just tried to use”) see higher conversion rates than those that simply describe premium features in a marketing message.
Ignoring user feedback and complaints
User feedback is essential to the success of freemium apps because it provides valuable insights into user needs, preferences, and pain points. If users are ignored or their complaints are not addressed, they may become dissatisfied with the app and ultimately abandon it.
Ignoring user feedback and complaints can also lead to missed opportunities to improve the app and increase revenue. By listening to user feedback, app developers can identify areas for improvement and make changes to the app that better meet user needs.
This can lead to increased user satisfaction and loyalty, as well as increased revenue through additional app downloads or in-app purchases. You can easily gather user feedback via app store reviews, social media channels, or dedicated feedback channels within the app.
If users aren’t converting, run in-app surveys to uncover the causes. Common blockers include:
- Price perceived as too high
- Premium features don’t address user needs
- Unclear value proposition
- Technical issues or poor UX
Not testing enough
Apps running frequent A/B tests on paywalls achieve up to 100x more revenue than those that don’t, according to Adapty’s 2025 data. Yet most apps don’t test nearly enough.
What to test (in order of impact):
- Trial configurations (length, opt-in vs opt-out)
- Plan durations (weekly vs monthly vs annual)
- Pricing (price points, regional pricing)
- Paywall design (copy, layout, social proof)
Use Adapty’s Paywall A/B Testing to run experiments without app updates and identify winning configurations faster.
Web billing: A growing alternative
With regulatory changes in the EU and US court decisions affecting Apple’s payment restrictions, web billing is emerging as a significant alternative to in-app purchases. Key benefits include:
- Avoid 15-30% app store commissions (Apple and Google fees)
- More pricing flexibility (custom plans, bundling, promotions)
- Better customer relationship (direct billing relationship)
- Reduced involuntary churn (45-60% reduction through advanced payment recovery)
Giants like Netflix and Spotify are already directing users to website subscriptions to avoid app store fees. Business apps using web billing show the highest median LTV ($255) and lowest churn rates in 2025 benchmarks.
However, web billing adds implementation complexity and may reduce conversion rates due to the extra step. Consider it if you have:
- High subscription prices where commission savings are significant
- A strong brand where users trust your website
- Resources to build and maintain web checkout infrastructure
Conclusion
Mobile app monetization can be a tricky chapter of your journey to maximize profits. Freemium app models have proven to be a cost-effective and successful approach to generating revenue from in-app purchases and ad placements!
There are many benefits to freemium apps compared to traditional money-making methods in the app industry, making them a favorite amongst app developers and businesses alike. However, it requires careful consideration and planning to avoid common mistakes that can lead to user dissatisfaction and revenue loss.
Key takeaways:
- Hybrid monetization is the new standard – 35% of apps now combine multiple revenue streams
- Weekly subscriptions have grown to 47% of revenue – test them if you haven’t
- Hard paywalls can outperform freemium in retention and conversion – test both
- Trial length matters – shorter trials (≤7 days) typically convert better
- Premium pricing works – higher-priced plans deliver 200-300% better LTV
- Test constantly – apps running frequent A/B tests achieve up to 100x more revenue
Conducting market research, defining premium features, creating a seamless user experience, and using a variety of revenue streams can all contribute to the success of freemium apps. Start with Adapty’s free plan to implement professional paywalls, run A/B tests, and track your subscription analytics – all without code.
