# How do free apps make money on the App Store?

Source: https://rushilo.com/blog/how-free-apps-make-money
By om.assets, Rushilo. Updated 2026-10-31.

> Free apps on the App Store make money after the download, mainly through auto renewing subscriptions, one time in app purchases and ads. Apple keeps 30% of in app sales, or 15% for developers under $1 million a year in the Small Business Program. Most indie apps that earn real money use a subscription behind a paywall, because ads pay too little per user unless an app has huge traffic.

You open the App Store, download a habit tracker for free, and use it for a week without paying anything. So where does the money come from? And if you want to build an app yourself, which of those models could actually pay you?

The short version: "free" only describes the download. The app makes its money after you install it, and the way it does that decides almost everything about how it is built, priced and marketed. Big companies can afford models that would starve a solo developer, so copying what a giant app does is usually the wrong move.

This guide covers the main ways free apps earn, how much Apple keeps, what indie developers actually report, and which model fits a small app.

## How do free apps make money in the first place?

**Free apps make money after the download, through subscriptions, in app purchases or ads.** Being free removes the biggest reason people skip an install, which matters because most apps are found through App Store search, where a price tag next to free competitors loses the click.

There are five models you will see:

| Model | How it charges | Best for | Main downside |
| --- | --- | --- | --- |
| Subscription | Weekly, monthly or yearly auto renewal unlocks the app | Trackers, learning, fitness, productivity | Churn: people cancel |
| One time in app purchase | A single "lifetime" or "Pro" unlock | Small utilities used now and then | Each user pays once, ever |
| Consumables | Coins, lives, credits, bought again and again | Games, AI apps with usage costs | Can feel exploitative |
| Ads | Banner, full screen or rewarded video ads | Games and apps with huge daily traffic | Pays very little per user |
| Freemium | Core free, advanced features paid | Apps with a clear "power user" layer | Too much free and nobody upgrades |

In practice these blend. A subscription app might also sell a lifetime unlock, and a game might show ads to players who never buy anything.

## How much does Apple take from a free app's sales?

**Apple takes 30% of in app sales by default, or 15% if you are in the App Store Small Business Program.** Per Apple's developer site, the program covers developers with up to $1 million in proceeds in the prior calendar year, and new developers can qualify too. Above that line the standard rate applies to future sales.

Ad revenue does not go through Apple at all. It is paid by the ad network, which keeps its own share.

A worked example at the 15% rate:

1. You sell a $22 yearly plan.
2. Apple keeps 15%: $3.30.
3. You receive $18.70 before taxes.
4. If 50 people subscribe in a month, that is $935 of proceeds for the year of access they bought.

On top of that you pay Apple $99 a year for the developer account, whether or not the app earns.

## Which model do indie apps actually use to earn?

**Most solo developers who report real income use a subscription behind a paywall, often with a cheap entry plan.** Ads and soft freemium setups show up mostly in the stories of apps that struggled.

The reason is simple arithmetic. A small app gets hundreds of installs, not millions. Ads pay a fraction of a cent to a few cents per impression, so a few hundred users produce pocket change. A subscription turns even a small share of those users into dollars every month.

What r/AppBusiness threads show, as of October 2026:

- **A subscription with no trial.** One solo developer in Brazil had a dead app after spending about $250 on Meta ads for one paying user. He removed the free trial, doubled the yearly price from about $11 to $22, and added a $1.99 weekly plan as a "paid trial". Conversion did not drop. He reported about $3,000 revenue and $1,600 a month in recurring revenue within 23 days, with 87% coming from App Store search.
- **A subscription with a trial, and follow up.** Another developer kept a 7 day trial on the yearly plan, piped every cancellation into Slack and emailed people the same day. Trial to paid went from 21% to 44% in five weeks, and the app reached $944 a month after four months.
- **Free content, paid cosmetics.** A Japanese learning app kept all learning free and sold skins. It made about $1,000 in its first weeks, but the developer said revenue per user was low, which ruled out paid ads.
- **Generous freemium, no ads.** A fitness tracker for advanced lifters made almost everything free and charged only for advanced analytics. After a year it had one lifetime sale and one monthly subscriber.

> **Tip:** Track revenue per install, not subscriber count. It is the number that tells you whether you can ever afford to pay for users.

## Subscriptions vs in app purchases vs ads: which should you pick?

**Pick a subscription if people will open the app every week, a one time unlock if they use it occasionally, and ads only if you expect very large traffic.** Here is a quick way to decide:

1. **Ask how often the user comes back.** Daily or weekly use (a tracker, a language app) supports a subscription. Monthly use (a unit converter, a scanner) fits a one time unlock.
2. **Ask whether you have running costs per user.** If every action calls a paid AI API, you need recurring revenue or credits, or heavy users will cost you money.
3. **Ask what the free version proves.** The free part should show the value and stop before the payoff. One developer in the threads gates each Pro feature with a blurred preview of the user's own data: show the thing, lock the depth.
4. **Set a price, then test it.** Pricing is the cheapest experiment you will run. The Brazilian developer doubled his price in five minutes and it was his best change.
5. **Add ads last, if at all.** If you add them, rewarded ads (watch a video to unlock something) annoy people less than full screen ads between screens.

The [App Store Apps pack](/app-store) walks through the paywall setups and pricing tests in detail, including how to run a trial versus no trial test cleanly.

## Why do some free apps make nothing at all?

**Usually because nobody finds them, not because the monetization model is wrong.** Developers in the threads repeat that building is the easy part and distribution takes months.

A paywall cannot earn without installs, and installs come from three places for a small app: App Store search (the listing's title, subtitle and screenshots), content on TikTok or a website that sends people to search the app by name, and occasionally paid ads. For low priced apps, paid ads often lose money. One developer spent $5,674 across Apple Search Ads, TikTok and Reddit and worked out about $114 to acquire a paying customer worth about $18 over their lifetime.

## Mistakes to avoid when monetizing a free app

These come straight from developers who made them:

- **Buying cheap installs to look popular.** One developer spent a few hundred euros on Google ads in low cost countries. Many installs were bots or the wrong audience, uninstalls piled up, and his organic traffic dropped afterwards.
- **Giving away everything.** If the free tier solves the whole problem, almost nobody upgrades. The lifting app above is the clearest example.
- **Assuming a free trial is free.** A trial adds a moment where people decide to cancel. Some apps do better without one, some do better with one and a follow up email. Test it rather than guessing.
- **Underpricing.** Several developers raised prices and kept the same conversion. Starting too low leaves money on the table for months.
- **Trusting your analytics over your payment data.** One developer's analytics counted 10 trial conversions where RevenueCat counted about 48. Reconcile the numbers before you optimize anything.

> **Watch out:** Anyone selling a course on "vibe coding an app in a weekend for $10k a month" is selling the dream. Real threads show many solo apps land at hundreds of dollars a month, after months of work.

## How much can a free indie app realistically earn?

**Anything from zero to a few thousand dollars a month, and zero is common.** The apps that earn usually combine a narrow audience with a clear problem, a subscription priced with tests, and one steady source of installs.

Costs to start are low: the $99 yearly Apple fee, a few hundred dollars of tools, and your time. Developers describe about two focused hours a day, every day. That is not passive income. It is a small product business, and the revenue stops growing the week you stop working on distribution.

This is not for you if you want guaranteed returns, dislike making content or testing prices, or expect the App Store to send users on its own.

## Where to go from here

If you want to build a free app that earns, keep the plan small:

1. Find a niche where leading apps have plenty of ratings and angry one star reviews.
2. Ship one core feature with a keyword first title and clear screenshots.
3. Put the deeper features behind a subscription, with a cheap weekly plan or a short trial.
4. Pick one content channel that sends people to search your app by name.
5. Test price and trial once you have a steady trickle of installs.

The [App Store Apps pack](/app-store) gives you the full step by step lessons, paywall and pricing templates, the listing checklist and the content formats behind the numbers above, for $19. All 16 Money Printer packs are $39.

For the per install math behind these models, see [how much apps make per download](/blog/how-much-apps-make-per-download).

## Frequently asked questions

### How do free apps make money if nobody pays to download them?

They charge after the install. The common ways are an auto renewing subscription that unlocks the full app, one time in app purchases such as a lifetime unlock or cosmetic items, and ads shown inside the app. Many apps combine two of these.

### How much does Apple take from in app purchases?

Apple's standard commission is 30% of the sale. Developers who earned up to $1 million in proceeds the previous calendar year can join the App Store Small Business Program and pay 15%. New developers can qualify too, so most indie apps start at 15%.

### Do ads in free apps make good money?

Only at large scale. Ads pay a small amount per view, so an app with a few hundred daily users earns very little from them. Indie developers in r/AppBusiness mostly treat ads as a top up next to a paywall, and games with heavy traffic are the main exception.

### Is a subscription or a one time purchase better for an indie app?

Subscriptions earn more per user over time and fit apps people open every week, such as trackers and learning apps. A one time unlock suits small utilities people use occasionally. Many developers offer both: a yearly plan plus a lifetime option at a higher price.

### Should a free app offer a free trial?

It depends, so test it. One solo developer in r/AppBusiness found most trial users cancelled on day one, removed the trial, added a $1.99 weekly plan as a paid trial and saw conversion hold. Another kept a 7 day trial on the yearly plan and doubled trial to paid by emailing people who cancelled.

### How much money does a typical free indie app make?

Results vary widely and many apps make nothing. Threads in r/AppBusiness show solo apps between a few dollars and a few thousand dollars a month, with hundreds of dollars a month being common for apps that do get traction. Nobody can promise an income.

### Can a free app make money without ads or a paywall?

Yes, a few ways: tips or donations, cosmetic items, affiliate links, or using the app to sell something else such as a service. These usually earn less per user than a subscription, so they work best for apps with a lot of engaged users.

### What is the best way to learn to build and monetize an app?

To put these monetization models into practice, the Rushilo App Store Apps pack has lessons on free trial or no trial and on paywall design that converts, both based on what indie developers tested. The course has 24 lessons from public developer threads, with checklists. It is $19 one time, or $39 for all 16 packs. There are no income promises; results depend on what you ship.

## Sources

- [App Store Small Business Program (Apple Developer)](https://developer.apple.com/app-store/small-business-program/)
- [My app was dead. I killed the free trial, doubled the price, and hit $3k revenue (r/AppBusiness)](https://www.reddit.com/r/AppBusiness/comments/1vw950q/)
- [My iOS app is 4 months old and does $944 MRR (r/AppBusiness)](https://www.reddit.com/r/AppBusiness/comments/1usio9p/)
- [My Japanese learning app hit 10,000 users and made $1,000 (r/AppBusiness)](https://www.reddit.com/r/AppBusiness/comments/1tqwlvx/)
- [I am giving up on my app (r/AppBusiness)](https://www.reddit.com/r/AppBusiness/comments/1tzglrk/)