In the mobile market, in-app billing as a charging model has been talked about for a long time, but it has still to take off, but according to Bango this will change in 2011, and the new Guardian iPhone app is just one of the businesses that expect to lead the way.
In-app billing works by allowing the app to be downloaded for free, but the continued use of the app, or particular app features, would trigger a charge to the consumer.
Expectations for in-app payments are high, with many people in the industry seeing mobile apps as the perfect catalyst for this kind of micro-charging model. But in-app billing adoption has been slower than predicted – Bango reports that less than 5% of payments billed through its mobile payments platform in 2010 were of this in-app variety.
One of the many reasons for the lack of take up has been the app stores’ technical limitations. Most don’t offer the functionality to enable payments from within the app. But this limitation is starting to be lifted as app stores experiment to drive more revenue.
RIM announced in September in-app billing support in early 2011, for example. The platform battle next year, according to Bango, will focus on developers as much as users, who will need to determine which of the app platforms to prioritise for development and distribution. Those that deliver most revenue will capture greatest mind-share.
Bango forecasts that for 2011 in-app charging will grow over 600% to account for close to 30% of all mobile app payments. The forecast is based on end of year trends from leading developers in the games, music and broadcasting segments.
According to Bango in the near-term the developers and publishers who monetise regular use of the app – streamed video and audio, games, news and alerts – will most readily capitalise on in-app payment features. Bango is also working with music and print publishers who are looking to develop revenue models beyond simple subscription-based paywalls. Here, the ability to charge per play, per video or even per-page, opens up many new possibilities.
Thirty percent sounds like wishful thinking to us, and it might work in the short-term, but not in the long-term. If a third of all your apps are constantly asking for payments every few weeks, or months, then chances are consumers will start to cut back very quickly.
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