'Freemium' app revenues to top $14 billion by 2014

Annual revenues from value-added services upsold via downloaded mobile applications are expected to top $14 billion by 2014, according to a new report from Juniper Research. With application storefronts increasingly likely to introduce mechanisms to upsell premium content from within apps, Juniper anticipates the so-called "freemium" business model--whereby applications are offered on a free-to-download basis but yield incremental revenues from subscription-based services and additional content options--will enjoy growing prominence over the next five years.

That poses a significant challenge for mobile operators, given that the freemium approach directs both existing and potential content revenues through app stores and applications themselves as opposed to traditional distribution channels. "Although consumers are likely to shift from purchasing content on-portal to app stores offered by vendors and OS providers, those stores in turn represent an opportunity for operators to realize far greater revenues from consumer data usage," contends report author Dr. Windsor Holden in a prepared statement.

Juniper also argues that applications delivered on a freemium basis present an opportunity for content providers to generate additional revenues from advertising, noting that the levels of repeat usage from applications downloaded via Apple's App Store suggests there is far greater opportunity for brand exposure on a per-download basis than with any previous content.

For more on the freemium forecast:
- read this release

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