How do you make money when everything is free? The secret is in realising that free is only one end of the demand curve: the other end is fans of your work who are delighted to give you money. This short talk covers monetisation, revenue, the ethics of free-to-play for children's content and much more. Slides from The Children's Media Conference, Sheffield, 6th July 2012

1. How to make money when
everything is free
Nicholas Lovell
Children’s Media Conference
July 6th, 2012

6. BUY IT
ON
AMAZON
RIGHT
NOW!

7. Enough advert

8. What do these have in common?

9. They made a lot of money
• Top grossing games on iOS in 2011
• Estimated revenue >$30m each

10. How much do players spend?
• What is the average transaction value for an
in-app purchase on a smartphone in the US?
$14

11. Seriously, how much?
• 51% of the
revenue
comes from
transactions
worth > $20
• 30% comes
from
transactions
worth > $50

12. Price and value

13. So how do we make money?

14. What are we selling?

15. One-size-fits-all pricing is dead
PRICE Revenue
opportunity
Marketing opportunity
Demand

16. Some thoughts on kids

17. What changes when you work
with kids?
• Targeting “whales” has questionable ethics
• Use free to start, become a “trusted brand”
• Cross-promotion becomes ever more
important
• Aim to “own a shelf”
• You are not selling product any more. You are
building a service and a relationship
• Over-deliver

18. Morph – a thought experiment
Business model 1
 Make an iPhone App
 Offer a Free version and a 99¢ game
Business model 2
 Make a free iPhone App
 Incorporate ads for a limited edition,
1,000-only print of the original Morph,
framed for your wall for $999
 Conversion rate of 0.1% = same
revenue (oh, no 30% to Apple)

19. It’s all about the curve
PRICE Revenue
opportunity
Marketing opportunity
Demand

20. Thank you
nicholas@gamesbrief.com
Follow my blog
www.gamesbrief.com
Buy Mind Games