How to choose the right monetization model for your indie app

You built the app. Now you need it to make money. Most solo builders pick a revenue model based on instinct or imitation, then discover the tradeoffs only after they ship.

This guide breaks down seven monetization models for indie app builders, with conversion benchmarks, pricing reference points, and case studies from solo developers who reached recurring revenue within their first year. You will learn which model fits your app type, how platform fees affect your margins, and what rollout sequence gives you the best chance of earning revenue quickly.

Your monetization model shapes your feature set, user experience, and long-term viability. Retention math determines model viability more than user volume alone.

Seven monetization models for indie builders

You can monetize almost any app, but each model comes with its own conversion friction, build complexity, and margin profile. The tradeoffs below will help you pick a model that matches how your users get value.

Freemium converts best when the value gap is clear

Core functionality ships free. Premium features sit behind a paywall. Industry benchmarks show that business apps achieve the highest download-to-trial rate at 8.9%, while health and fitness apps convert at 7.2%.

The free tier must solve a real problem, and the paid tier must feel like a meaningful upgrade. A peer-reviewed study in Management Science found that a freemium model can increase demand for the paid version when the value gap between free and premium is large enough. That same research found freemium works best when users already judge the product as moderately good. Your free version should not feel like a demo. It should feel like a tool that gets the job done, with a clear reason to upgrade.

Best for: Productivity apps, creative tools, and professional utilities with natural feature tiers. Expect non-trivial build effort for entitlement logic, onboarding, and upgrade prompts.

Subscriptions build predictable revenue at small scale

Subscriptions work when your app delivers ongoing value. Recurring billing turns retention into compounding revenue, with users paying weekly, monthly, or annually for continued access.

Solo developers have demonstrated the model works at indie scale. One bootstrapped developer grew a habit tracking app to $1,000 MRR in 8 months. Another solo builder reached $7,300 MRR in 7 months by combining a subscription model with building in public on X.

Best for: Content subscriptions, fitness apps, professional tools, and SaaS-style productivity apps. Plan for meaningful work across paywalls, billing edge cases, and account state.

In-app purchases work best with modular content

In-app purchases (IAP) let users buy specific items, features, or content inside your app. The model works best when value is naturally chunked into individual unlocks.

Three purchase types matter:

• Consumables: virtual currency, credits
• Non-consumables: permanent unlocks, ad removal
• Content unlocks: templates, levels, filters

For mobile games, a monetization breakdown on Game Developer recommends focusing on power-ups and upgrades rather than hiding the core fun behind a paywall. New players tend to hesitate before buying premium upgrades until they feel engaged with the gameplay.

Best for: Mobile games, photo/video editing apps, and creative applications with modular content.

Advertising pays only at serious scale

Advertising pays when you have frequent sessions and high impression volume. Most indie apps see meaningful ad revenue only after they reach large daily active user counts.

A case study from one solo developer documented approximately $7,000 per month from 30,000 daily active users, roughly $0.23 per daily active user per month.

Best for: Free games with high daily engagement, content apps (news, weather, utilities), and utilities with large user bases. Technical complexity is usually low. You integrate an ad SDK and tune placements.

Paid downloads and hybrid models add friction for unknown builders

Paid downloads represent a smaller slice of modern mobile monetization than subscriptions and IAP. Requiring payment before users experience your product creates maximum acquisition friction for unknown builders.

Paymium compounds this friction by requiring upfront payment plus additional in-app purchases. Avoid paymium when launching an unproven product.

Hybrid models combine multiple approaches. The most common hybrid starts with a free ad-supported base, then lets users pay once to remove ads and unlock premium features through a subscription.

If you go hybrid, keep the rules simple. Do not show ads to paying subscribers. Place ads at natural breaks. Save hybrid complexity for after you validate product-market fit with a proven, engaged user base.

Premium pricing often beats budget pricing

The model you pick sets the mechanism, but pricing sets the ceiling. If you price too low, even good conversion rates produce weak revenue.

Benchmark data shows that apps priced at premium levels convert trial users at more than double the rate of budget-priced apps. Apps priced under $10 per year see a median download-to-trial rate of only 4.3%, compared to 9.8% for higher-priced apps. "Go cheap and win on volume" is often the wrong default.

Trials amplify the effect when you pair them with a real value moment. Apple supports subscription trials and introductory offers through its built-in subscription system.

A widely cited startup pricing guide reinforces the same principle: if customers willingly pay ten times your asking price, your price is too low. Test your pricing upward before you lock it in.

Match your model to your app type

The right model depends on how often users get value and when they experience the "aha" moment. Once you map your usage pattern, you can choose a payment moment that feels earned.

Retention determines everything

Subscriptions only work when your product delivers repeated value that justifies ongoing payment. Even strong monthly retention compounds into meaningful churn over a year. A 5% monthly churn rate leaves you with only 54% of subscribers after 12 months.

Choose freemium when your product has an immediately useful free core and users need time to form habits before upgrading. Choose a free trial when users need to experience the full product to understand its value.

Match your category to the right revenue model

• Productivity and utility apps: Weekly or monthly subscriptions with trial periods.
• Games: Freemium with in-app purchases for power-ups and cosmetics. Delay advertising until you have consistent daily engagement.
• Professional tools and B2B apps: Annual subscriptions with premium pricing.
• Content and media apps: Subscription for access, with a free tier for discovery.

You can also build an app portfolio instead of perfecting a single product. Volume and iteration can become a monetization strategy on their own when you are still learning what converts.

Platform fees that shape your margins

Platform fees can erase a large portion of revenue if you ignore them. Understanding the commission rules before you launch helps you price with margin in mind and avoid surprises.

Apple and Google both take a percentage of transactions processed through their stores. The fee you pay depends on your revenue tier, your product type, and how billing is handled.

Smaller developers qualify for reduced commission rates

Both platforms offer reduced rates for smaller developers:

• Apple's Small Business Program drops commission to 15% for eligible developers earning under $1 million in proceeds.
• Google Play applies a 15% service fee on the first $1 million in annual earnings for eligible developers who enroll.

Apple also offers reduced rates for many auto-renewable subscriptions after a subscriber's first year, dropping commission to 15%.

External payments shift the operational burden

Some markets have introduced rules that affect payment links and billing options. The EU's Digital Markets Act (DMA), for example, applies to large "gatekeepers" and has begun reshaping platform policies around alternative payment options.

Fee savings from external billing may be real, but so are the responsibilities. Processing payments outside the app stores makes you responsible for fraud prevention, tax collection, and chargebacks. Consider external payments only after your subscription model produces enough revenue to justify that operational overhead.

Use a phased rollout to earn complexity

Start with the simplest model that can teach you about retention and willingness to pay. Add complexity only after the app proves it can keep users.

A phased rollout reduces risk because it forces you to earn each layer of monetization through validated user behavior.

Early launch: Start with freemium plus a one-time in-app purchase. This keeps acquisition friction low while generating early revenue data. Track whether users return often enough that an upgrade prompt feels earned.

After validation: Add subscriptions once retention and repeat usage stabilize. Start with monthly and annual tiers. Price toward the premium end of your category. Test a short trial to improve conversion.

Optimization: Improve paywalls and onboarding based on real funnel data. If margins justify it, evaluate web-based subscriptions to reduce platform fees. Consider localized pricing for international markets.

Mature product: Add hybrid elements once your user base justifies the complexity. Advertising, promotional offers, and portfolio expansion become realistic once you have consistent repeat usage and predictable revenue.

To build this cleanly, start with a freemium model paired with a one-time IAP, then add subscriptions once users demonstrate repeat value. Reference the official platform documentation for StoreKit and Play Billing to avoid preventable billing bugs and App Store review issues. Get started with Anything to build and launch your monetized app.