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Free vs paid vs subscription: choosing your app's business model
Wrong question: "which model makes the most money?" Right question: "how does my app deliver value: once, or continuously?" Every model is a different trade of reach against revenue per user, and mismatching model to value delivery is how apps earn installs and one-star reviews simultaneously.
The four trades
- Paid upfront. Maximum revenue per download, minimum downloads. The price wall also starves velocity signals, so store discovery shrinks: paid apps live on web presence and word of mouth. Right for: pro niches, one-and-done utilities, subscription-hating audiences.
- Freemium (free + IAP/lifetime). Free preserves reach and rankings; the unlock monetizes the convinced. The catch is the free tier must be genuinely useful: a crippled demo behaves like a hard paywall with extra steps: instant deletes, retention damage.
- Subscription. The compounding model, and the most abused. It's earned by continuous value: syncing, recurring analysis, evolving content. Subscription on one-time value is the store's most reliable resentment machine. Bonus economics: Apple's cut drops to 15% after a subscriber's first year, so retention literally raises margin.
- Free with ads. Monetizes attention at scale: needs volume indies rarely have. Below serious daily actives, ads earn lunch money and cost product dignity. Right for: broad consumer reach plays, rarely for tools.
Each model bends the funnel differently
Know your model's silhouette before judging your numbers. Paid: tiny install volume, but near-perfect intent: a paid app's conversion rate reads "terrible" against free peers, which is why benchmarks compare within business model. Freemium: healthy installs, and the game lives after install, retention and free-to-paid conversion, with deletions revealing whether the free tier respects users. Subscription: the funnel grows a tail (trial starts, trial-to-paid, churn) where proceeds, not downloads, are the only honest scoreboard. Same store, three different games; misreading which game you're in is how healthy apps get "fixed" into sick ones.
Deciding, and changing your mind
Start from value delivery, sanity-check against your niche's norms (competing paid against free-with-good-tier requires courage and evidence), and remember the model is a revisable decision, not a tattoo: apps migrate models all the time. But migrations are the biggest funnel experiment you can run: date the switch, expect the volume/mix shifts that come with it, and judge on proceeds per week after the dust settles, not on any single stage. The model that wins is the one your retention curve and proceeds line vote for: measured, not vibed.
Whatever the model, the scoreboard is proceeds
FunnelHound runs your funnel all the way to money: installs, deletions, purchases and proceeds from App Store Connect.
Get FunnelHoundData notes: commission mechanics per Apple's published terms as of 2026. Model-fit observations are indie practitioner consensus; category norms vary hard: a model that's suicide in one niche is standard in another. Not business advice, except the part about resentment machines.