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Product survival analysis for the App Store

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Abstract

We empirically analyze both free and paid products on the top 100 Free and Grossing charts in the Korea App Store using Weibull parametric survival analysis on the product level. The findings are as follows: First, influences of ranking, customer ratings, and contents size on product survival are different for free and paid products. Customer ratings and contents size critically affect product survival when the price is zero. Second, the early entrant advantage exists in App Store, which results from a ranking system in the App Store and consumer learning. However, the effect of early entrant advantage differs between the Free and Grossing charts; the benefit of early entrant advantage is greater on the Free chart than that on the Grossing chart. Finally, we provide a competitive profit model that is related to free products.

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Notes

  1. We obtain the data from website (http://148apps.biz/app-store-metrics/?mpage=appcount).

  2. In-App Purchase is a paid item that consumers can purchase for convenience.

  3. “Pro and Lite” strategy means that firms release both a “Pro” (paid and full) and a “Lite” (free and limited) version.

  4. Although the majority of the Apps on the Grossing chart are paid Apps, some free Apps are provided with In-App Purchase. Therefore, we exclude free Apps for a clear comparison between free and paid Apps in Model 4.

  5. We exclude Market age in Model 2 and 5 to avoid multicollinearity.

  6. Targets of analysis are Pro version Apps, which are paid Apps.

  7. There are only 11 Apps that shift from the Free chart on to the Grossing chart. Their mean App age is approximately 3 days and ranges from 1 to 9. Their staying time is relatively short compared to the mean value (16 days) of total free Apps, which means that paid conversion Apps are likely to stay for a short time on the Free chart.

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Authors and Affiliations

  1. Technology Management, Economics and Policy Program, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, South Korea

    Euy-Young Jung & Jeong-Dong Lee

  2. Division of International Economics and Trade, Sunmoon University, Galsan-ri 100, Tangjeong-myeon, Asan, Chungnam, 336-708, South Korea

    Chulwoo Baek

Authors
  1. Euy-Young Jung
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  2. Chulwoo Baek
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  3. Jeong-Dong Lee
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Correspondence to Chulwoo Baek.

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Jung, EY., Baek, C. & Lee, JD. Product survival analysis for the App Store. Mark Lett 23, 929–941 (2012). https://doi.org/10.1007/s11002-012-9207-0

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