You might think that starting one of the most successful entertainment app companies of the past three years would be enough for any entrepreneur.

Not so for Andrej Nabergoj.

Having ridden the wave with Outfit7, gaining 300 million app downloads with its Talking Animals franchise, Nabergoj switched focus nine months ago.

Instead of revisiting content creation, however, he's set his sights higher; targeting the entire app distribution business with new outfit Iddiction.

Fixing the problem

Revealed in a burst of publicity and cash, thanks to a $3.5 million funding round from the likes of Comcast Ventures, IDG Ventures and Playdom founder Rich Thompson, the first step of his plan can now be experienced in the shape of iPhone promotion app App-o-Day.

"We're building a distribution channel around deals. We really like the daily promotional angle," says Nabergoj.

"It provides great engagement, and I don't think the existing options such as FreeAppADay are doing a good job,"

Partly, he argues, this is because of poor user experience in terms of design, but also because the concept has become diluted. As the app business model has become freemium, the draw of a free app has become significantly reduced.

Devoid of the spark that you're getting something valuable for free for a limited period of time, a free app promotion service becomes just another advertising channel and one that quickly loses its effectiveness over time.

To deal with this, App-o-Day only features one new app per day, although each app's promotion is run over three days.

If a free app is promoted, users will also get in-app currency worth either 99c or $1.99, ensuring the channel always provides the consumer with a great deal.

Opening the floodgates

Although App-o-Day has only been available for a month - and only soft launched in the US - Nabergoj says it's already delivering hundreds of thousands of downloads daily. He claims the conversion rate is over 30 percent in terms of driving downloads from the daily push notification.

Even better - for developers - is that the service is offered free to smaller companies; something he expects to continue, although larger companies will be charged.

It's no surprise then, Nabergoj says he has no problems filling his slots with high quality content. He says the company's receiving between 10 and 20 requests a day.

A bigger boat

But the iPhone app is only the start.

"All the apps that we've promoted in App-o-Day have integrated our SDK because our plan is to build a promotional platform," he says.

The next step will come with the release of another app focused on promoting iPad content - something he argues is so different from iPhone in terms of audience, quality and user experience that it needs its own separate channel.

More widely, Iddiction will eventually be rolling out across all relevant mobile, tablet and other devices, including web browsers; also using Facebook and Twitter as the social glue to build a community and a massive distribution network.

More than rank

"We're currently scraping the surface. I think this business has much more potential than Outfit7," Nabergoj explains

His point is over 20,000 apps and games are being added to the Apple App Store every week, and the quality bar is going up and up.

"Think of what the quality will be like in five years time," he says.

"But even now quality isn't enough to drive downloads. In addition, we're seeing existing distribution channels are saturated. AdMob and iAd are very expensive, Tapjoy doesn't have volume any more, and the bots have gone."

This means the only option is App Store ranking. It will throw up the occasional huge hit such as Draw Something, but it's not a reliable way to build a business.

"No matter how Apple decides to change the App Store, I think rank is the wrong strategic focus for distribution," says Nabergoj.

"Discovery based around deals is a very powerful mechanic."

And this potential was the reason he left Outfit7 and has the backing of those key VCs.

"Working with the best deal and the best developers, our goal will be to drive millions of downloads, independent of Apple and the App Store rank," Nabergoj states.

You can download the App-o-Day app for iPhone and iPod touch from the App Store [link].