How apps make money: subscriptions, in-app purchases, ads and paid apps
Apps earn money in four store-approved ways: auto-renewing subscriptions for ongoing value, one-time in-app purchases for unlocks or consumables, advertising in free apps, and an up-front price; on both stores, digital goods used inside the app must be sold through the store's own billing, which takes a commission.
What are the four ways an app makes money?
| Model | How it charges | Fits when | Store rules to know |
|---|---|---|---|
| Auto-renewing subscription | A recurring price per period | Value repeats: content, a service, sync, regular updates | Apple 3.1.2(a): ongoing value, period of at least 7 days, works on all the user's devices. Google: sustained value, clear terms, easy cancel |
| In-app purchase (one-time) | Non-consumable unlocks or consumable items | Permanent upgrades, levels, currency, credits | Apple 3.1.1: must use in-app purchase for digital unlocks; purchased credits may not expire; restore for restorable items. Google: Play Billing |
| Advertising | Free app, ad revenue per view or tap | High usage, broad audience, low willingness to pay | Apple 2.5.18: ads clearly marked, easy to close, reportable, no targeting on sensitive data. Google Play asks you to declare whether the app contains ads |
| Paid app | One price before download | Clear, finished tool with no ongoing costs | Google Play: an app that has been free cannot become paid; you need a new package name |
Most apps mix two of these, for example a free app with ads and a one-time "remove ads" purchase, or a free tier with a subscription.
How do I choose? A decision tree
- Is the thing people pay for physical, or a service used outside the app (a ride, a delivery, a ticket)? Then it is not in-app purchase. Use a normal payment method; the store's billing must not be used for it.
- Does the value repeat over time (new lessons, a cloud service, ongoing content, a running service)? Then a subscription fits. Check it truly gives ongoing value; both stores reject subscriptions for one-time benefits.
- Is the value a permanent unlock (a pro feature set, a full game)? Use a one-time non-consumable purchase, or a paid app if there is no free part worth offering.
- Do people use it often but rarely pay (casual games, utilities)? Use ads, plus a purchase to remove them, plus consumables if it is a game.
- Is the audience professional or business? A subscription with a free trial or a paid app usually fits better than ads.
What do the store payment rules say?
App Store (guidelines last updated 16 October 2026):
- 3.1.1: to unlock features or functionality (subscriptions, in-game currency, levels, premium content, a full version) you must use in-app purchase. License keys, QR codes, crypto and other own mechanisms are not allowed for this.
- Credits or currencies bought with in-app purchase may not expire.
- Non-subscription apps may offer a free time-limited trial through a non-consumable item at Price Tier 0 named "XX-day Trial", with the duration and what happens after clearly shown first.
- 3.1.2(a): subscriptions must give ongoing value, last at least seven days, and be available on all the user's devices.
- 3.1.3: exceptions such as reader apps, multiplatform services, person-to-person services, and goods and services outside the app.
- 3.1.1(a) and 3.1.3: apps on the United States storefront may include buttons, external links or other calls to action to other purchase methods.
Google Play:
- Paid apps and in-app digital goods, features and subscriptions must use Google Play's billing system, except in the cases the Payments policy lists.
- Google Play billing must not be used for physical goods, physical services, bill payments, peer-to-peer payments and some other categories.
- The Subscriptions policy requires clear disclosure of price, billing period, renewal and free-trial terms, an easy online way to cancel, and sustained value.
How does the commission change the math?
Both stores take a share of every store-billed sale: Apple 30% standard and 15% for Small Business Program members or for subscription renewals after a subscriber's first year; Google Play 15% to 30% depending on region, earnings and program, with a 5% billing fee in some regions. The full tables and worked examples are in App Store and Google Play commission rates. The practical effect:
- Subscriptions are charged less over time on both stores, which rewards retention.
- Ads revenue is not subject to the store commission, but needs a lot of usage to add up.
Which numbers should I track per model?
| Model | Track first |
|---|---|
| Subscription | Trial-to-paid conversion, month-2 and month-12 retention, refunds, revenue per paying user |
| In-app purchase | Share of users who buy, average purchase value, repeat buyers |
| Ads | Ad views per daily user, revenue per thousand views, retention (too many ads lower it) |
| Paid app | Store page conversion rate, refunds, ratings after purchase |
App Store Connect (Sales and Trends, App Analytics) and Play Console (financial and subscription reports) show the store-side numbers.
Common mistakes
- A subscription for a one-time benefit. Both stores treat it as a policy problem.
- Hiding the price or renewal terms. Google lists unclear trial and renewal terms among subscription violations, and Apple asks you to describe clearly what the user gets for the price (3.1.2(c)).
- Selling a digital unlock through a web checkout from inside the app, outside the exceptions.
- Switching a free Android app to paid. It cannot be done; plan this before launch.
- Taking away what existing users paid for when moving to subscriptions; Apple's guidelines say not to.
Where do discounts and offers fit?
Once you have a model, offers help people start and stay: introductory offers, promotional offers, offer codes and win-back offers on the App Store, and base plans with offers on Google Play. See App Store subscription offers and Google Play subscriptions, and set the base price with App Store pricing.
How does Uptika fit in?
Revenue starts with installs. Uptika shows the store side: the ASO score and Keyword radar show how findable your app is, the Rival log records when competitors change price or listing, and the free Chart Movers tool shows daily top-grossing movement in a category. The Free plan tracks one app in one storefront: start free.
Questions
How do apps make money?
Through subscriptions, one-time in-app purchases, advertising, a paid download, or a mix. Digital content and features unlocked inside the app must be sold with Apple In-App Purchase on the App Store and Google Play Billing on Google Play; physical goods and real-world services use other payment methods.
Subscription or one-time purchase for an app?
Choose a subscription only if the app gives ongoing value, such as new content, a service, sync or regular updates; Apple requires ongoing value and a period of at least seven days, and Google Play requires sustained value. If the value is a permanent unlock, a one-time purchase is the honest and policy-safe choice.
Can I take payments outside the store?
For digital goods used in the app, generally no: Apple guideline 3.1.1 requires in-app purchase and Google Play's Payments policy requires Google Play Billing, with listed exceptions. Physical goods and services consumed outside the app must use other methods. Apple allows buttons and external links to other purchase methods in United States storefront apps, and both stores have regional programs with their own terms.
Which monetization model earns the most?
There is no universal answer, and neither store publishes one. It depends on how often people use the app, how much value repeats, and your audience. Pick by the shape of your value, then measure conversion to paid, revenue per user and retention.