Since the launch of Apple’s App Store, developers have faced an ongoing dillema: “For Free, or Not For Free”? Putting a price on an application to generate some revenue obviously adds a significant barrier to entry, especially when there are so many free apps available. But it also adds a level of credibility – many people assume that because free apps aren’t earning money, the developers probably haven’t put much effort into them.
Today sees the launch of LiveRail for the iPhone, an advertising platform that could help change this paradigm entirely by allowing free applications to still monetize effectively. LiveRail allows iPhone application developers to embed brief video advertisements into their applications, which play immediately after launching an app (developers get paid on a CPM basis). CEO Mark Trefgame says that the platform is plug-and-play, allowing developers to implement it with a minimal amount of effort and only a few lines of code.
The technology behind the application is impressive – this isn’t just a single video that’s embedded into the application. Whenever you launch a supported app, LiveRail will attempt to contact its servers, and will stream a new ad at a bitrate dependent on your connection speed (if you’re on Edge it will download an especially small file that totals only around 60k). If LiveRail is unable to reach the server, it will just play the last ad to be cached. Developers can tag their applications to help target the ads. And in future releases the platform will support location services, so an ad could be displayed depending on what stores are nearby (imagine seeing an ad informing you that Chipotle is just down the street).
Initially, developers will likely be faced with annoyed reviews if they begin introducing these ads, but as users realize that they’re getting free apps that would have otherwise been sold at a premium, the outcry should settle down (though there would probably be serious backlash if someone tried to put ads in a paid app). And they’d better get used to it: LiveRail appears to be first to market with their video ads, but can expect competitors like AdMob to introduce similar ads in the near future.
We should also keep an eye on Apple’s response to these new ad platforms – Apple takes a cut of all premium applications sold through its store, but it absorbs the bandwidth and hosting costs for free applications, charging the developers nothing. If these ads make the one-time payment model obsolete and more applications switch to “Free”, Apple may wind up changing this structure (or even ban ‘intrusive’ advertising entirely).
That’s llaaammmeeeee. I mean it’s good for them and good for the app developers to be able to monetize this, but it sucks for iphone app users. It was nice to not have to hear/watch/see lame ads for once
Peter
http://www.thewebwar.com
I’m sort of wondering if Apple will allow these at all. I could imagine Steve Jobs stamping his foot down and saying that these could ruin the user experience (or make the store’s pricing model obsolete). Still, I’d like the developers to paid, even when they make their apps free.
One could argue that they should just make the app a premium one if they want to earn money, but as I said in the post, this creates a higher barrier to entry.
well couldn’t iphone developers offer both? An ad supported version to offset development costs, and let users try out the product. Afterwords, offer an adfree version, so users can directly access their game experience (deleting the few lines of live rail embed code).
Ppl need to let go of the ‘no ad’ entitlement mentality. The problem with most ads are they aren’t very creative, and offer nothing to the end user. However, if ads were better produced, and entertained as well as advertise, it’d be a win-win, instead of a zero-sum game–but I digress.
err.. offer and adfree version @ a reasonable price point.
wonderful article!:)
As much as many of us want to say that this will hinder the user’s experience, we gotta admit, it’s pretty cool that they came up with this! As much as I wouldn’t want to see an ad every time I run an app, if viewing a few seconds worth of advertisements will help support a developer who is charging nothing to use the app financially, I wouldn’t really mind it. But I’ve got to agree with Jason, I don’t think Steve Jobs would be down for an idea like this to be implemented, mainly because of how users probably would not like it much.
Fantastic! Just what I NEVER WANTER. EVER.
*wanted. Damnit. Use Disqus, TC.
typo in headline
Smart idea.
its pathetic how techcrunch doesn’t have a semi-unified voice on things.
arrington will bash a lot of shit, and for whatever reason whoever wrote this review is giving 100x credit to a simple idea.
‘this is some serious technology, chipotle down the st, blah blah’. companies have been trying to pull this shit for years and there is absolutely zero indication that this company is better put to pull it off before someone else, heck i’d bet you admob already offers something like this.
sheesh, i find myself following techrunch out of habit rather than looking for intelligent stuff. so, yes, you got me hooked, but not in the good way.
Free should mean free! Free of costs and free of ads! As data downloads (the ads) cost the user money, the app is no longer free!
Unless you are on an unlimited plan the free version will cost you a lot more than the $2 or $3 most of the apps cost.
I agree with Neil and I think that’s the most profound reason ads are not welcome – they cost money to users. If I was to open an app while not on WiFi, and discovered that I’m being charged by downloading an ad, I would probably delete the app right away and never go back at it.
Not to mention that users should be notified by such behavior, not by reading the terms of use of an app but by moving all such apps into a new category named “Adware”. So there would be paid apps, free apps and adware apps and I bet people would still prefer free over adware. I also agree with other people’s comments that I don’t see Apple staying out of this, by either changing the SDK to specifically ban such behavior or ban such apps from the App Store.
Finally, I don’t see anything really impressive in this technology, unless transcoding videos to a lower resolution is something totally new and high-tech. The most challenging issue about these ads would be relevance, and if Apple would permit this behavior then I, as a developer would surely trust King Google rather than a novice in the area.
If it means free apps this is really great as long as somebody can create an app that stops the ads or the users own kill switch should be installed.
Congratulations to LiveRail being the first on the market with this! Very impressive as it’s a big step towards monetizing mobile content. Great job!
how about graphical or textual ads at first and see how it goes..
ryan @
http://12tb.com
Do you adfree, costfree people eat? Who works to provide you with that? Why do you feel so entitled that you should get other people’s work for free?
Until food, shelter and computers are free, you “no-cost software” people will either be living off the tailcoats of VCs with more dollars than brains or large corporations finding creative ways of swindling you. I wonder why we just had to bail Wall Street out… so much for free. Perhaps we should go back to the honesty of a good wage paid for solid work.
Wow I was just thinking about this the other day… it might work well is some kinds of apps like long games where a break is nice anyway…? I guess that is still debatable. But as someone who ha created a couple free apps (http://www.rotzy.com is one), its so hard for us to monetize the app without something like ads. I’m leaning towards AdMob’s static ads right now but even that can get in the way for people who absolutely hate ads.
Remember, it takes tens to hundreds of hours to create these “free” apps too!
Under the Apple iPhone developer best practices documentation, the goal is to make the app load as quickly as possible, as typically an iPhone app is only used for a few seconds at a time.
This concept throws everything we know about how iPhone users use apps out the window for the almighty dollar.
The App Store has done a tremendous job at sales, marketing, and fulfillment – just charge a couple bucks for your app and keep your users happy with no ads!
..and then AT&T will step in with crazy data charges for people who stream video ads.
And here we go again
- Kevan / Free-iPhone-3G-Apps.com
From what I understood, free apps are a good way to draw attention to your developing skills and to the apps that you have to pay for? I guess I viewed it as “free publicity” for the developers. I guess we’ll just have to wait and see how it goes. I understand the developers need to eat and need to have an income, and I’m OK with that as long as it doesn’t hurt the user experience too bad.
Jake
NoteScribe: Premier Note Taking Software
what about mashing up programs with advertising mashed into it?