Most apps don’t make enough money to break even, report says

Heartland Chattanooga is a mobile app video game that sets World War III in Chattanooga.

Authored By Chloé Morrison

More than 50 percent of all mobile/tablet applications won’t be successful enough to allow the creator to break even, according to a recent study from App Promo.

“It is somewhat discouraging,” Adam McElhaney, local creator of Heartland Chattanooga, an app that puts the Scenic City in the middle of World War III,  said. “It is extremely difficult to get noticed in the App Store. There are literally hundreds of thousands of apps sitting there, waiting to be discovered, with thousands more being poured into the system every day.”

Financial backing is a big part of what makes an app successful, McElhaney said.

One may be recognized if it is “truly unique,” but it really needs to stand out, he also said.

Chattanooga entrepreneurs have spawned a number of apps. Most of them said the money they make from the apps is a nice supplement but not the primary driver behind the creations.

According to MobiThinking, there are 5.3 billion mobile subscribers. That’s 77 percent of the world’s population.

The company’s 2011 research also shows that more than 300,000 mobile apps have been developed in the past three years. Apps have been downloaded 10.9 billion times, and demand for mobile apps is expected to peak in 2013.

Ken Willes is one of the creators of Rocket Link Mobile, and he agreed that finding a way to be visible amongst the thousands of apps is important.

He said his product is broader than an app. It’s an “advertising medium.”

The product is delivered via app, but it has a broader use for both app users and business advertisers.

“There are all kinds of different apps out there for small little things here and there, and they definitely have a place,” Willes said. “The apps that really take off address a much larger need.”

Willes is also a professor at Southern Adventist University, and one of his former students, Jason Neufeld, also created an app, called Fret Surfer Guitar Trainer, which eventually spawned a bass, mandolin and HD iPad version.

But he created the initial product in 2008 when the App Store was “fairly small.”

“It sold really well from the onset because it filled a niche, and it also got recognition as an App Store staff favorite, which ended up getting it on the top 100 paid overall apps,” he said. “It spent a few weeks there and a while longer in the top 100 paid music apps.”

He originally wanted to meet music education needs, but he still wanted it to be profitable because he was a college student at the time in need of extra income.

Although he said he doesn’t have the exact sales numbers, he thinks between the end of 2008 and now, the app has made about $50,000.

“[It’s] not a whole salary but definitely good supplemental income,” he said.

Copycat apps and a more saturated App Store slowed his sales, but he still makes between $200 and $400 a month without much advertising, he said.

McElhaney has a “decent amount” of downloads weekly, and it has allowed him to hire additional programmers to assist with a new game he’s creating and the ability to rehire a graphic artist who worked with him on Heartland Chattanooga.

“As I create this new game, that idea is present in the back of my mind: ‘What if this flops and I am out all of this money?'” he said. “But every business venture is a risk, and I have learned to accept that. You can’t make money without spending money. I have been very fortunate to have only put in most of my time into my apps … Any download of a paid app I feel like is a profit.”