Revenue from App Store Activity…
by David Hill
Earlier today I put it out there for anyone motivated enough to calculate it using some of the volume data that Apple published earlier today.
It’s been on my mind all day (which people have told me says something…I guess) so I went ahead and did it. But there is a “health warning” regarding the consumption of this information. Its not revenue – its really a price * volume proxy – lots of assumptions, but again, done in the spirit of transparency.
We start with our earlier premise that in the absence of download volume, we would use the number of reviews written for an app as a proxy for relative volume comparisons. As of 7/13, written reviews for paid-for apps outnumbered those for free apps by about 25% (that’s about a 55/45 ratio). So:
If there were 10 Million downloads, then using the ratio above, we’re left with about 4,450,000 for paid-for apps.
Next, we know that there were 2,623 reviews written for paid-for apps. Dividing this into the number of reviews that an app received gives us the “share” of reviews for an app – which translates to our proxy for share of volume. Multiply this by 4,450,000, and again by the price to get an estimate of relative financial position vs. other apps (I don’t feel it’s qualified enough to be called revenue yet).
So, if Super Monkey Ball has 290 reviews, the following happens:
290 = 11.1% of paid-for reviews. 11.1% * 4,450,000 * $9.99 = $4.9M.
There, I did it.
But remember, this is not revenue! It’s a way to gain more insight into how pricing and demand affect the relative financial performance of an app. Here is a table of a few I’ve done for you.
We’d love to hear your feedback on this.