Monetizing The iPhone’s Photo Apps

The Wall Street Journal has a piece on the difficulties faced by developers when trying to make apps like Instagram, Hipstamatic and PicPlz profitable. Speaking of Hipstamatic:

Since Hipstamatic’s launch in December 2009, the $1.99 app has been downloaded more than 1.7 million times. The app allows users to choose different lenses, films and flashes. The firm charges 99 cents for a package of add-ons such as infrared.

The company generates a third of its revenue from those extras, says CEO Lucas Buick, and is profitable. In September, it launched a service where users can send in photos and pay a fee for printed copies.

The app has been named “iPhone App of the Year” by Apple and it’s got lots of additional stuff and features to unlock with in-app purchase. The app is a one-time $1.99 purchase, but developers can keep the money coming in with updates and new items to buy. So far, it seems like this business model is working.