Almost five months ago we declared our intention to change our app monetization model, as we discovered our initial strategy was basically… wrong. This is a progress report on how the model has evolved since then, what changes we’ve made on TimeTune to make it happen and if we are getting closer to our final goal or not.
If you didn’t read that post from February, now it would be a good time. It shows where we come from and where we want to get in the monetization department.
THE HYBRID MODEL
The first thing we needed to do was to make a transition from a purely ad-based model into a hybrid model, or in other words, progressively decrease the amount of advertising while increasing the amount of Pro features. In theory, this should lead to better sales and a redistribution of our revenue sources (i.e. advertising revenue versus sales revenue).
To achieve this, we removed the ad banner from several screens: the Activity and Reminder Edit screens, the Help and Statistics screens and soon the Tags screen too. We added some brand new Pro features as well: Blue Themes and the Routine Programmer.
But it wasn’t until the addition of the Routine Programmer (a month ago) that we really started to see a notable difference in sales. As expected, users are more willing to pay for a Pro version if they see a benefit in power and functionality.
So we can successfully say the first step has been completed. TimeTune is now a hybrid model and it performs better than the ad-based model. To see how well it performs, we need to take a look at the conversion rate:
THE CONVERSION RATE
Previously on the ad-based model, we said our conversion rate from free to Pro was only 2.5%. It’s important to note that what we meant is 2.5% of all active users were Pro users at that moment. This is different from a dynamic conversion rate, which can be measured in different ways by tracking user conversions dynamically over different periods of time.
Where are we now with the hybrid model? The proportion has improved for the better, maybe not in a spectacular way, but good enough. At this moment, 3.48% of all active users are Pro users. And this happened even with a huge factor against us: the summer holiday season. Many businesses experience a decrease in global sales during this season, and TimeTune is not an exception (we’ll talk about it in another post).
THE REVENUE DISTRIBUTION
If the conversion has improved, how has the revenue distribution been affected? In February the ad-based model had a 1:2 proportion (the ad revenue was one third of the total revenue). Now the proportion has changed to 1:3 (the ad revenue is one fourth of the total revenue), and this change is mainly due to an increase in Pro sales, not to a decrease in ad revenue. Nice.
But for those of you who are interested in our evolution, you must know that TimeTune is still at loss, meaning that we haven’t recovered yet all the work and effort put into it (and we presumably won’t for a long time). Developing apps (and software in general) is a long-distance race, especially if you start (like we did!) from scratch.
Nonetheless, the change in distribution means we are on the right path and the final goal (reaching an ad-free model) is achievable, but we can’t get rid of all the ads yet, as they still represent a good amount of the total revenue.
So in the coming versions you can expect a progressive advance in the same direction: less ads, more Pro features. The end of the summer holiday season will be an interesting period to follow too: we need to know how the (expected) uptick in downloads will affect the total conversion.
YOUR THOUGHTS
We think we’re going the right direction but, what do you think? Would you change anything else in the model? If you have any other ideas for the future of TimeTune you can tell us, we’ll take them all into consideration! 😉
(Original illustrations modified: ‘Machine converting ideas in money’ and ‘Smartphones pack’, designed by Freepik)
I really want to change my routine to start on Sunday and end on Saturday. I still love the free app through. Thanks!
Hi Janelle. You can already do that on Settings / Interface / Week starts on…
I think it’s pity you have such a large user-base and still you don’t have a web interface.
Yes – I’d love a web interface (hate data entry on my phone!) to set up / modify routines.
I have used TimeTune Pro on my phone, but I can’t use it on my computer or on the web. That would make it much more helpful to me.
Even just a web app would give TimeTune some portability, and the phone’s screen is uncomfortably small.
Great app. I’m thinking of making a purchase. I was wondering if I purchase the pro version of the app would I have pay again if the price increases? And would I have access to the future pro features.
Hi Prashant. You only have to pay once, and future updates will be included. Thanks! 😉
For some reason, this is always a big factor for me (regardless of affordability); I strongly prefer to pay once vs. recurring charges. Even if it were $2 yr vs. $10 once (despite the likelihood of using something completely different in years).
Kudos for your transparency here. Seriously.
Please include the Web App for the timetune.. this is one of the kind productivity App i never seen any where else… Kudos to the team.. dont forget the Web App.
I think the app is great, and I’m excited to see where it goes next. I have no concept of what it takes to develop an app, yet I’m interested in following your story.
I’m curious about what you do to market the app? Perhaps it’s in another blog post, this is my first one.
We didn’t write a post about marketing yet, but it’s a very important subject. We keep the idea for a future post.