Fueling 1.5 Million App Downloads a Day, Tapjoy Pushes for Exclusivity With Publishing Program

Tapjoy, the little and increasingly pricey secret that many app developers use to power their way up the charts, said today that it’s launching a “self-publishing” program. Essentially, that means that the company is willing to offer tens of thousands of dollars in free credits in exchange for exclusive distribution rights to new mobile titles.

For background, Tapjoy is a pay-per-install advertising network: developers pay for enough app downloads so they can ideally crack the top of the iOS or Android charts, get visibility in front of consumers and then gain downloads from more valuable, long-term customers. Tapjoy gets these downloads for its advertisers by putting offer walls in hundreds or thousands of apps, which award gamers virtual currency if they download other apps. It usually costs north of $30,000 to break into the top 25, but it varies widely. If an app is good, it will be cheaper. If it’s poorly designed, it will fall off the charts quickly and no amount of spending will save it. The company’s network includes more than 7,500 Android and iOS apps and reaches 200 million customers (as measured by unique device IDs). It says apps that work with it earn more than $35 million a month.

At the beginning of the year, we wrote about how Tapjoy’s model resuscitated the company, which used to be known as Offerpal and was struggling with a less profitable landscape on the Facebook platform. But the field has dramatically changed in the last three months with about 10 new competitors rushing into pay-per-install advertising like Sponsorpay, OpenFeint and Adknowledge.

Even though Tapjoy has the largest network, this new self-publishing program is about staying one step ahead and preventing competitors from having access to emerging titles. Other pay-per-install networks are cultivating relationships with rising iOS developers by launching seed funds like W3i.

The three main services of Tapjoy is offering as part of this self-publishing program are:

1) Distribution: Tapjoy will provide the developer credits to its pay-per-action advertising network. They would be worth anywhere from “tens of thousands of dollars” to potentially much more on an ongoing monthly basis. Chief executive Mihir Shah wouldn’t guarantee that the program would offer enough for a developer to break into the top 25. However, anecdotally from other developers, $20,000 to $45,000 seems to be the going rate at the moment so theoretically it could be enough.

2) Monetization solutions: The company will run the virtual currency infrastructure, the offer wall and other kinds of promotional ad units for the games.

3) Other infrastructure or consulting: The company works with more than 10,000 apps across iOS, Android and Facebook, so it has visibility into what practices monetize best for other developers and can offer advice. It can also secure servers or contract with Amazon’s EC2 on behalf of them.

In exchange, Tapjoy is looking for:

Exclusive distribution rights on relevant platforms (which could be iOS, Android or other future app stores). The length of the contract varies; it could be one to three years.

“In effect, we’re asking for digital media rights,” Shah said. “It’s not dissimilar to what an indie record label might ask for. We want exclusive monetization and distribution.”

He added, “We want the developer to do what they love to do while we handle the business aspects.”

Shah said the emergence of other competitors wasn’t really affecting the company’s bottom line and that it was eyeing new opportunities with other app stores and markets where Android is quickly gaining share.

“The biggest effects on our business are structural. It’s the adoption worldwide of smartphones and the embrace of app usage,” Shah said. “We’re so ubiquitous at this point that we’ve created a marketplace effect.”

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