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What is One-time purchase (OTP)?

Definition, examples, and more

Definition

A monetization model where users pay once for permanent access to a specific feature, product, or piece of content. OTPs can complement subscriptions for users who prefer à la carte value over recurring payments.

How to Calculate

OTP Revenue = Units Sold x Price. OTP-to-Subscription Rate = OTP Buyers Who Subscribe / Total OTP Buyers x 100.

Example

A photo editing app offers subscriptions ($7.99/month) alongside one-time filter packs ($2.99 each). 30% of revenue comes from OTPs, and 25% of OTP buyers later upgrade to a subscription.

Why One-time purchase (OTP) Matters

OTPs capture revenue from users who refuse subscriptions. A music app added a $149.99 lifetime option — 8% chose it, generating significant upfront cash. These lifetime buyers had the highest engagement of any segment.

Frequently Asked Questions

Should I offer a lifetime purchase?

Price it at 3-5x annual to avoid cannibalizing recurring revenue. Most users will still choose subscriptions if presented as the better deal.

Do OTPs cannibalize subscriptions?

Only if priced too low. Design OTPs as complementary add-ons (specific packs, individual tools) rather than full alternatives.

How does Apple handle OTPs?

Classified as Non-Consumable or Consumable in-app purchases. Both subject to 30% commission (15% for Small Business Program).

Category
Subscription App Terminology
Related Area
Mobile App Growth & Monetization

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