Tattoo Artist BooksHow do apps make money? Through five common routes: subscriptions, in-app purchases, advertising, paid downloads, and indirect revenue where the app brings in sales or bookings for a business. Which one works depends on what your app does and how often people open it, so there is no universal "best" revenue model, only a best fit.
App monetization models at a glance
| Model | How it works | Fits when |
|---|---|---|
| Subscription | User pays monthly or yearly | Regular use and continuous value |
| In-app purchase | One-off pack, feature or content | Games, content packs, extra tools |
| Advertising | Revenue per view or click | Very large audience and frequent sessions; low yield on small audiences |
| Paid download | Pay once when installing | Niche tools with one clear job |
| Indirect revenue | The app drives sales or bookings | Businesses, brands, service providers |
Subscriptions: recurring revenue for sustained value
A subscription gives predictable income when you can deliver new value every month. It is common in planning, accounting, productivity, health tracking and learning. The flip side is high expectations: each month the user asks "is this still worth it?". A free trial, clear pricing and easy cancellation are the base of the model. We go deeper in subscription app business model. Our own app, Tattoo Artist Books, is subscription-based with a 7-day free trial and takes no commission on artists' sales.
In-app purchases and paid downloads
In-app purchases mean free to download, with the valuable parts sold separately (the freemium approach). It is typical for games and content apps. A paid download puts a barrier before the first step; if your brand is unknown, installs drop, so it is mostly used for well-known apps or tools with one clear job. For digital goods you generally have to use Apple's and Google's own payment systems and accept their commission; fees and rates are in App Store fees for developers.
Is ad revenue realistic?
Ad income per user is tiny. To reach a meaningful total you need many active users and frequent use. For apps aimed at children, advertising and personalization rules are very strict. If your audience is a limited niche, subscription or indirect revenue is usually the saner choice than ads.
Indirect revenue: when the app is a channel
Not every app has to earn money directly. A booking app cuts no-shows, a loyalty app increases repeat sales, an ordering app removes a middleman commission. Here you measure the business result, not the app's own revenue. For small businesses this is often the healthiest route; see build a booking app for one example.
A worked example
Say you have a booking and accounting app for tattoo artists. Users open it daily and it is part of their workflow, so a subscription is the natural fit. Showing ads would disturb the experience and bring little with a small audience. For a children's learning game, a parent-approved subscription is safer and more sustainable than ads. In a hair salon's booking app the money comes from more bookings and fewer cancellations, not from the app itself. One question, three different answers. That is why the model should be chosen after the product is defined.
How to choose a revenue model
- Usage frequency: daily or weekly use favours subscriptions; rare use favours one-off sales.
- Repeatable value: can you create a new benefit every month?
- Audience size: in a niche of a few thousand people, ads will not work.
- Who is the user: children, students and professionals follow different payment and consent rules.
- Who pays: in children's apps a parent gate and consent are essentially mandatory.
Start with a single model for version one, and first see whether people really use the app. We explain why to keep the first version small in what is an MVP app.
When to put a price on it
You do not have to charge from day one. Many products start free or with a low barrier, and add payment once behaviour is visible. The risk is that turning a free product into a paid one annoys users, so decide early which features stay free and which become paid. The alternative is a trial plus subscription from the start, which makes the price clear and lets users try without risk. Either way, build payment infrastructure into the architecture early instead of bolting it on later; it is cheaper and gives a better user experience.
Common monetization mistakes
- Forecasting revenue before any user has seen the product.
- Showing the paywall on first launch, before the user sees any value.
- Ignoring store commission and taxes when estimating margin (ask an accountant).
- Assuming the store will bring users by itself, with no promotion plan.
Frequently asked questions
Can you really make money with an app?
It is possible but not guaranteed. Results depend on user numbers, continuing value and the right model. Testing with a small first version is sensible.
Which revenue model earns the most?
There is no universal answer. Subscriptions suit regularly used apps, in-app purchases suit games, and indirect revenue suits service businesses.
Do I need a company to earn money from an app?
Tax and account treatment differ for individuals and companies. Ask an accountant in your country.
At OdenaVerse we do not only write the app, we make the revenue model part of the design, including subscription, payment and account infrastructure. We also work on a shared-growth basis (lower upfront fee plus a share of revenue) or, for strong ideas, an idea partnership where we carry the development cost. Email us to talk through your case.