How do money making apps make money?

Saunak Sahoo

It is the latest ‘viral trend’ to have taken over the internet. You just cannot escape it. From being all over social media ads to being surrounded with players who meticulously play the game at a specific time a day; apps like Loco, Brainbaazi, JusPlay, Phirki and Mob Show are changing the way we look at gameshows by bringing it from the TV to our phones. The premise is simple: login to the app every day at a certain time, answer a few questions and earn money that is delivered straight into your wallet account. The apps are complete with a real gameshow host and a pool of money that is distributed evenly amongst all winners. And even though winners only get Rs.20-30 each time, sometimes on your lucky day you might even win a lot of cash. These apps give out thousands of rupees everyday ranging from Rs.20,000 to Rs.75000 and even more.

However, something interesting to note here is that these apps do not have any ads on them. So how are they earning money?

Well, the short answer is they’re not….yet. It must be said that this category was first created by an app called HQ Trivia. Made by the founders of the now defunct Vine, Rus Yuspov and Colin Kroll, the app that launched in fall of last year has gained popularity all over the world. 

The company that made the app, Intermedia Labs is backed by venture capitalists. In other words, some of the deep pockets of Silicon Valley are funding the winnings. They plan to attract a large and loyal customer base and then eventually be associated with brands and feature sponsored content on their apps.

We have seen this kind of approach being adopted by a lot of now successful startups. For example, taxi aggregation service Ola and room finding app Oyo initially offered their services at highly affordable prices. After attracting a loyal customer base, these services are slowly moving towards increasing the amount they charge their customers. Indeed, these apps are also hoping to do the same, and can be called startups in their own right.

It is not clear how the Indian versions of this app are generating revenue. However, taking a look at the companies behind these apps, it is not hard to see how they are doling out the cash. Loco is owned by Pocket Aces and Brainbaazi is owned by the Times Group. These apps have arguably a broader scope than its US counterpart. A large Indian population means that brands would be willing to pay out large sums of money to feature sponsored content and be associated with the brand. It will be a great way for them to ensure visibility. Another unique and (dangerous) use would be that these apps may sell the database of users to other companies. Looking at the permissions that these apps seek (read contacts, SMS, telephone, storage, location used by Brainbaazi), it is not beyond the realms of possibility.

These apps have captured the imagination of the world in a way which nobody thought was possible. Even though the pay-outs are small, nobody minds earning some cash on the side by just answering some questions. It is obvious that not all of these apps will survive. It will be interesting to see what lies ahead for these trivia-quiz apps.

Do let us know what you think about these apps! Which ones are your favourite? Drop a comment below!