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Could Businesses Charge for Apps? Maybe, Survey Says

How Much are People Willing to Pay for Free Apps?

Some of the most popular applications are free. Whether it is YouTube, Facebook or Google Maps, this model has made these companies billions of dollars. But a new study from McGuffin asks an interesting question. How much value do consumers assign to these apps, and how much would they be willing to pay for them?

This question also comes at a time when these companies are under scrutiny from regulators. And if things keep going in this direction, there is a chance they will be asking for a fee to use their services. In fact, Small Business Trends asked this very question back in 2012.

This time around McGuffin is asking this question to determine how value is created and perceived in the digital age. And to achieve that it surveyed 2,004 consumers from June 14 to 15, 2019 through a paid online market research platform.

The respondents were made up of 55% females and 45% males ranging in age from 18 to 71 years old. They could respond by saying how much they would pay, as well as paying nothing and discontinue use, without access to a free alternative.

How Much are People Willing to Pay for Free Apps?

The apps in the survey are the 16 most widely-used platforms. And overall more than 60% of the respondents say they would pay something for all of them. But some of the apps faired better than others.

WhatsApp came in with the highest number of people who say they are willing to pay for the service at 89%. Google Drive, LinkedIn and FaceTime are next with 79%, followed by Google Maps and Google Translate at 78%.

What Would You Pay for Free Apps?

Although Reddit doesn’t have the billions of users of Facebook, 77% of the respondents are willing to pay for the application. Reddit is a very user intensive platform with high engagement rates. Snapchat also gets the same 77%, but people are not willing to pay as much for it.

Instagram and Facebook were in the middle of the pack with 70 and 64 percent respectively.

According to this data, consumers are willing to pay for apps with real-world use cases.

How Much Would You Pay?

To this question, Google achieved the top three spots as the highest earner. YouTube was number one with $4.20/mo., Google Maps at $3.48/mo. in second place, and Google Drive at $3.31/mo. third.

Rounding the top five, Facebook and LinkedIn are in fourth and fifth place with $2.92/mo. and $2.84/mo. respectively.

With that in mind, the next obvious question is, how much can these fees earn the companies. Considering each app has users in the hundreds of millions, it is not surprising they will have revenues in the billions of dollars.

How Much Would App Makers Earn?

Topping this particular list, Reddit is first based on percentage. With $2.74/mo., the company can increase its revenue by 10,771% with projected revenue of $8.3 billion. But in terms of total revenue, YouTube would be raking it in. The company could generate revenue of $68.9 billion with a projected increase of 1,928% from the $3.4 billion it currently earns from ads.

Facebook and Instagram will also increase their revenue substantially. While Instagram will generate $15.3 billion, Facebook will surpass its current $46 billion by another $53.4 billion.

But this windfall for Facebook comes with downside according to the survey. Facebook has the highest percentage of users who wouldn’t pay anything for the app.

So the last question is, would you pay for any of these apps if they weren’t free?


This article, “Could Businesses Charge for Apps? Maybe, Survey Says” was first published on Small Business Trends

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