Social TV monetization options include content and service access fees, advertising revenue, and direct purchase sales. If social TV follows a similar model of mobile apps, a windfall profit will come from in TV app purchases.
Mobile app revenue in 2014 was over $34B [[i]] with 76% of mobile app revenue coming from in app purchases [[ii]]. In 2014, the average mobile app paid $0.74 to $1.11 for each download installation (cost per installation - CPI) [[iii]]. Mobile app companies pay to provide free apps (such as games) because they make money from selling premium features and upgrades. In 2014, the mobile app Candy Crush was already earning about $1 million per day from in app purchases. [[iv]]
One of the key drivers for mobile app gaming success if strong social sharing achievement and ranking. Some of the ways to motivate in app purchases is to share ranking levels and sell status rank upgrades (e.g. become silver or gold) and premium features (faster ways to get status).
Large screen television is much better for certain types of interactive gaming than mobile devices because of the high-bandwidth rich media channel and a real time backchannel connection. With the number of connected TVs (Smart TVs) at over 42 million homes in USA (over 50%) [[v]] and strong in app purchase successes from mobile apps, social TV app revenues will be amazing!
[i]. Worldwide mobile app revenues from 2011 to 2017 (in billion U.S. dollars), Statista, Sep 2014.
[ii]. In-App Purchase Revenue Hits Record High: Accounts For 76% Of U.S. iPhone App Revenue, 90% In Asian Markets, TechCrunch, March 28, 2013.
[iii]. Mobile Games: What is the average CPA for mobile games? Quora, Sep 2014.
[iv]. Candy Crush Saga, Think Gaming, Sep 2014.
[v]. 42 Million U.S. Homes Are Connecting to the Internet through TVs or Attached Content Devices, NPD, May 15, 2014.
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