In a recent analysis of over 30,000 mobile apps, most developers may advocate for more subscription models due to struggling revenue performance. Poorly performing apps seldom earn over $1,000 a month, suggesting that premium pricing strategies are no longer as effective as they were before.
With this shift towards subscription-based models, developers are now focused on providing consistent value through regular updates and features to justify ongoing subscriptions. However, understanding consumer behavior becomes necessary as users might hesitate to make continuous payments.
According to a study conducted by RevenueCat, about 90% of current apps using in-app subscriptions utilize their technology. This technology allows for streamlined subscription management and access to key data analytics, enabling brands to improve their services according to customers’ needs. This growing trend reflects the growing demand for such third-party services.
Meanwhile, the data reveals an increasing trend among developers prioritizing user retention strategies. The idea is to keep existing users engaged and satisfied rather than investing resources into acquiring new ones.
The report showed that subscription earnings across Apple’s App Store and Google’s Play Store amounted to $6.7 billion. Revenues are primarily distributed among the top 10% of app developers, though the rise of new developers suggests potential for a more equitable future. The growth in subscribers, estimated to reach 380 million by 2021, signals potential for this revenue stream to further proliferate.
Only 17% of the apps studied managed to earn at least $1,000 monthly. However, apps exceeding this limit have about 59% chance of earning $2,500, and 60% chance of making $5,000 monthly. This paints a positive outlook for apps that surpass the $1,000 mark.
On the downside, there is significant earnings inequality among subscription-based mobile apps. The highest-performing 5% of apps earn over 200 times more than the bottom quartile within a year of their launch. Different factors contribute to this disparity, emphasizing the need for mobile app developers to focus more on user value and continuous improvement.
Regarding user retention, mobile app subscriptions face significant challenges. With monthly retention rates falling by 14% year-on-year and only 36% of subscribers renewing by the third period, developers are now strategizing new ways to enhance user experience and improve subscriber engagement.
In conclusion, while mobile app subscriptions may be challenging, opportunities abound for those who can stand out. Developers must balance increasing subscription prices and offering high-quality, valuable services that make their subscribers see value in maintaining their subscriptions.
