Research in the International Journal of Electronic Healthcare has looked at how different monetisation models affect the pricing of health software for mobile devices on the two major app platforms, the Apple App Store and Google Play Store. The findings from the work could be used by developers, healthcare providers, and users alike to understand the market for such apps.
Natália Lemos, Cláudia Cardoso, and Cândida Sofia Machado of the Polytechnic University of Cávado and Ave in Barcelos, Portugal, used a censored regression model to pinpoint key factors that determine the price of health apps that users expect to pay. This then points to how additional approaches to monetisation might be used to lower the initial cost of an app, with the likes of advertising-based approaches to revenue generation having the greatest impact.
The healthcare sector is facing mounting pressure as an aging population faces chronic disease. Moreover, patients are more demanding than ever of their healthcare providers. However, as is almost always the case, budgets and staff are limited resources. New technology might supplement conventional healthcare provision and help patients find ways to improve their quality of life even when suffering from a chronic illness. Indeed, digital and mobile technology have already changed healthcare delivery, improved productivity, efficiency, equity, and quality in many ways. So-called e-Health, which integrates electronic communication and information technology, and m-Health, which focuses on mobile and wireless technologies, are both advancing healthcare provision.
Many health apps work to make facile connections between patients and healthcare providers. The larger the user base, the greater impact a given platform can have on patients and improve health outcomes for them. But, in order to be economically sustainable, there is a balance to be struck in terms of what the apps offer, the resources they need, and the cost to providers and patients.
This new work shows that many users are not necessarily happy to pay a large up-front cost for an app, but are happy to see advertising if that keeps the app price low. This effect is more pronounced among Google Play Store users compared to those on Apple’s App Store. However, such ad-based models do detract from the user experience as they are a distraction and be a waste of a user’s time on the app in question. In addition, there is growing concern that some apps are monetised through third parties, selling on data and information about their users, which brings with it privacy and security concerns, something that is an especially sensitive issue in the health sector.
The team found, however, that there are alternatives that can make an app economically viable. For instance, if in-app purchases are offered this does not affect whether users will pay a given initial download price but does open up the possibility of additional revenue for providers and developers. This study focused mainly on Europe and more specifically the market for healthcare apps in Portugal. There is thus potential to extend the work to see whether it might be generalised to the wider and obviously vast international app markets.
Lemos, N., Cardoso, C. and Machado, C.S. (2023) ‘Monetisation strategies for health apps: evidence from Apple’s App Store and Google Play Store’, Int. J. Electronic Healthcare, Vol. 13, No. 4, pp.295–310.