Monetization of Android Market apps to close gap

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The Android platform is expanding rapidly, and along with it the Android Market and the applications available. It has come under some criticism though, namely the rogue applications that can sometimes find their way onto the store. When you compare the revenues for the two app stores there is a big difference, and it will need the monetization of Android Market apps to close the gap on the Apple App Store.

Currently Android is trailing behind the iOS platform with regards to making money for app developers and according to a report here, iOS generates around four times as much revenue for the top 200 apps. This is in comparison to the top 200 applications found on the Android Market.

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Even if you look at the apps that are downloaded for free and then use in-app purchases, the App Store still has a big advantage. According to an end of year report by Distimo 65% of the top 200 on the Android Market are free downloads, while on the App Store only half are free.

The gap in revenue is smaller when comparing applications for tablets, with these only generating twice as much as the Android Market. This revenue gap leads many developers ignoring the Android platform as their first choice in releasing new applications. With this in mind it will be surprising if Google’s Eric Schmidt claim that the Android platform will become the primary choice for developers coming true.

There are monetization options open to developers, which are helping some developers on the Android platform close the gap on iOS. StartApp is one such alternative that was recently launched by Android, and has paid out $200,000 to developers who install its SDK.

StartApp has its own search portal with applications from developer customers, and users get a search icon on their home page. It’s what generates revenues, and pays out $10 to $50 to developers for every 1,000 downloads or shares in the ongoing search revenue. It has now been installed on 450 applications, and in turn generated ten million downloads. This has helped some developers see their revenues jump by ten times as much.

StartApp’s CEO Gil Dudkiewicz said, “We are thrilled by the results we have seen thus far, with developers rapidly adopting our solution driving incredible growth in the download and distribution of our search solution”, and “We have received overwhelmingly positive feedback from our partners, many of whom have seen dramatic increases in the revenue they are receiving from their apps. This has led to a zero churn rate in the number of developers using our solution

Apple recently banned Tapjoy’s incentivized download model for allegedly gaming the App Store rankings, but on the Android platform it is doing well and has helped developers. If current trends continue the Android platform could overtake iOS in app downloads, and many developers may choose it as their primary platform. Google does have to close the revenue gap though or developers will continue to look at monetization options, which won’t necessary be popular with users.