Mobile app builders are anticipated to push subscriptions extra aggressively over the following yr. Numbers that RevenueCat lately shared analyzing over 30,000 apps counsel why: Most apps wrestle to succeed in $1,000 monthly in revenue.
RevenueCat makes a subscription toolkit for mobile apps. The 7-year-old firm’s examine shared at the moment, as noticed by Ztoog, mentioned the agency examined apps utilizing its in-app subscription SDKs. RevenueCat’s report did not listing all apps studied however claims Reuters, Buffer, Goodnotes, PhotoRoom, and Notion as prospects. The report claims that 90 % of apps with an in-app-subscription platform use RevenueCat. The San Francisco-based firm additionally claims to assist “every part from area of interest indie apps to a number of of the highest 100 subscription apps,” which notably suggests that the majority of the top-100 subscription apps aren’t included on this examine.
With these caveats in thoughts, the 120-page report nonetheless gives distinctive particulars a couple of claimed $6.7 billion in subscription revenue touching over 18,000 builders and 290 million subscribers utilizing the Apple App Store and Google Play Store.
According to RevenueCat, about 17 % of the apps examined make no less than $1,000 every month. The share of examined apps making extra month-to-month revenue is even decrease:
RevenueCat famous that after apps do attain $1,000/month in revenue, they’re extra prone to make $2,500 in month-to-month revenue (59 % of apps that reached the $1,000 mark reportedly did) and even $5,000/month in revenue (60 % of the apps that reached $2,500/month in revenue reportedly did).
Imbalanced revenue
RevenueCat’s numbers level to a robust imbalance in revenue share amongst mobile subscription apps: The report discovered that 12 months after launching, the highest 5 % of apps make over 200 instances the revenue of the underside quartile. For new apps, the median month-to-month revenue after one yr is “a bit beneath $50.”
“When segmenting right down to the highest 10 % and even prime 5 % of performers, revenue numbers improve quickly, going from $223 (higher quartile) to $971 (Q90), to $2,352 (Q95) in month-to-month revenue,” the report says.
Still, with promoting spending persevering with to tumble and builders wanting for a method to generate recurring revenue to assist app upkeep, assist, and developments, subscriptions are anticipated to proceed being builders’ main technique. RevenueCat’s examine quoted Ariel Michaeli, co-founder and CEO of mobile app developer reporting platform Appfigures, as saying that firm knowledge discovered that 59,000 new subscription-based apps got here out in 2023.
Subscription fatigue
Challenges in mobile app subscriptions embody not solely convincing folks to pay for an app but in addition convincing them to take action repeatedly. RevenueCat mentioned that in comparison with its 2023 report, the portion of month-to-month subscribers retained after one yr declined by 14 %, “impacting each the very best and worst performers alike.” Other insights embody month-to-month subscriptions having a median first renewal fee of over 60 % however sustaining solely 36 % of the unique batch of subscribers by the point it is time for a 3rd renewal.
Mobile-app builders hoping for recurring {dollars} are interesting to a consumer base more and more deterred by subscription fatigue. According to a 2022 report from administration consulting agency Kearney, 42 % of customers “suppose they’ve too many subscriptions.” But whereas extra industries are specializing in subscriptions, mobile apps, some argue, are a use case the place recurring funds make extra sense than in different companies, like printers.
“For the merchandise that sit in a very recurring use case, this could be a win-win for the customers and the enterprise. The longer that somebody needs to make use of the services or products that you just present, the larger the enterprise you’ll be able to construct,” Dan Layfield, founder of Subscription Index, a subscription monetization consulting agency, mentioned in RevenueCat’s report.
Higher costs
Mobile app subscription charges are anticipated to extend over the following yr. The common month-to-month fee elevated 14 %, from $7.05 to $8.01, within the yr since RevenueCat’s 2023 report. Concerns like rising buyer acquisition prices, curiosity in wanting like a premium app, and AI might economically problem mobile-app builders and have an effect on pricing.
But RevenueCat additionally expects that over the following yr, devs will experiment extra with different revenue streams, like in-app purchases and internet affiliate marketing.