Occupy the App Store? Top 1% of monetized apps dominate 94% of US App Store revenue

Posted:
in iPhone edited May 2016
The top 1 percent of earners don't just control the lion's share of money in the U.S. economy -- a similar disparity between the haves and the have-nots has emerged in Apple's own App Store economy, a new study reveals.




App discoverability heavily dictates sales, the latest app sales data from Sensor Tower reveals, as the top 1 percent of publishers accounted for nearly all of U.S. App Store revenue last quarter. In the first quarter of 2016, 623 monetizing publishers that include Supercell, HBO, Spotify and others raked in 94 percent of U.S. App Store revenue.

The remaining 6 percent of earnings, or $85.8 million, was distributed among 61,677 publishers -- the remaining 99 percent of all other App Store publishers.

Sensor Tower pulled data from the U.S. App Store regarding revenue for all publishers with at least one active paid or in-app-purchase-supported app. Downloads were compared to estimates for app publishers across the top charts for paid, free and grossing apps.

Of these apps, gaming, entertainment and music categories have drawn the most downloads with prior bestselling app publishers like Supercell, known for Clash of Clans, continuing to extend their dominance as they introduce new apps. App Store discoverability was shown to be a major driver in sales, affecting both iPhone and iPad installs.




Getting apps discovered by Apple's mobile audience has presented obstacles for many new publishers, and there have been recent signals that Apple is aware. Last month one report said the company is working on major changes to how searching operates in the iOS App Store, in an effort to help its audience discover content in a massive, ever-growing library of options.

While big-time publishers reap the most from the App Store, Apple too has benefitted from their dominant success. The App Store alone accounted for an estimated $6.4 billion in revenue for the company in 2015.

Apple itself revealed that the public had spent $1.1 billion on the App Store in just a two week period covering Christmas and New Year's to end 2015. Jan. 1, 2016 was reportedly the largest single day in the App Store's history, with $144 million in traffic.
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Comments

  • Reply 1 of 23
    foljsfoljs Posts: 381member
    Occupy the App Store? Top 1% of monetized apps dominate 94% of US App Store revenue

    So? 90% of apps are crap. And of the remaining 10%, 90% is again crap (but of course less than the 90%).

    This leaves us with 1% of apps -- and they should have 99% of revenue if it was just them, but they have 94% -- 5% more going to the 99% of crap apps.

    In case you think that's too little, 1% is still like 10,000 - 15,000 apps out of over 1,000,000 apps. 

    Do you even know 10,000 non mobile apps? Do you even visit 10,000 web pages?

    In search there's just Google and (sort of) Bing. In Social there's just Facebook, Twitter and Google+. In video it's 99% YouTube.

    Those are actual monopolies and problematic situations -- not 10,000 good apps out-winning 1,000,000 of whatever sort people threw out at the App Store.


    bonoboblkruppcalibaconstangjony0
  • Reply 2 of 23
    why-why- Posts: 305member
    oh boy here it comes
  • Reply 3 of 23
    waterrocketswaterrockets Posts: 1,231member
    Sounds just like many other industries. The top 1% of revenue generating video games... the top 1% of smartphone manufacturers... the top 1% of defense contractors... the top 1% of cable TV providers...
  • Reply 4 of 23
    waterrocketswaterrockets Posts: 1,231member
    foljs said:
    Occupy the App Store? Top 1% of monetized apps dominate 94% of US App Store revenue

    So? 90% of apps are crap. And of the remaining 10%, 90% is again crap (but of course less than the 90%).

    This leaves us with 1% of apps -- and they should have 99% of revenue if it was just them, but they have 94% -- 5% more going to the 99% of crap apps.

    In case you think that's too little, 1% is still like 10,000 - 15,000 apps out of over 1,000,000 apps. 

    Do you even know 10,000 non mobile apps? Do you even visit 10,000 web pages?

    In search there's just Google and (sort of) Bing. In Social there's just Facebook, Twitter and Google+. In video it's 99% YouTube.

    Those are actual monopolies and problematic situations -- not 10,000 good apps out-winning 1,000,000 of whatever sort people threw out at the App Store.


    YouTube is a problem and a monopoly? Do tell...
  • Reply 5 of 23
    volcanvolcan Posts: 1,799member
     the top 1% of cable TV providers...
    There is no such thing as 1% of cable TV providers in the US. There are really only 14 providers and they are mostly crap according to the rankings.

    Verizon FiOS had a satisfaction rating of 71 but now that Frontier has been taking over, I'm thinking it probably tanked due to the complaints of outages. All the rest of the providers rank in the 50-60 range. Maybe because most people don't have a choice of provider. People tend to become dissatisfied when they don't have a choice.

    1 Comcast
    2. DirecTV
    3. DISH Network
    4. Time Warner Cable
    5. Verizon FiOS
    6. AT&T U-verse
    7. Cox Communications
    8. Charter Communications
    9. Cablevision
    10. Bright House Networks
    11. Suddenlink Communications
    12. Mediacom
    13. WOW!
    14. Cable One

    (Listed by number of subscribers)

    edited May 2016
  • Reply 6 of 23
    boltsfan17boltsfan17 Posts: 2,247member
    This really isn't surprising but Occupy? Really? The reality is the top 1% of publishers are spending a fortune on content. Take HBO for example. They spend upwards of $2 billion on content so is it really that surprising they are one of the top 1% of publishers on the App Store? Of course not. As the saying goes, you have to spend money to make money. 
    baconstang
  • Reply 7 of 23
    rogifan_newrogifan_new Posts: 4,297member
    Of course apps are crap when people expect them to be free or $.99 at the most.
    ration allkruppcalimonstrositybaconstang
  • Reply 8 of 23
    xbitxbit Posts: 277member
    Over the past few years I've seen so many developers of innovative and thoughtful apps shut up shop. Just like music, film and literature, it's often the trash that rises to the top.
  • Reply 9 of 23
    redstaterredstater Posts: 49member
    Hmmm. I do not understand the negative reaction to this article. No one is talking about "occupy" or calling it a monopoly. Instead, it is merely pointing out that only a tiny percentage of apps actually earn money. Even though the low barrier of entry allows a lot more people to participate because it no longer requires distributing your software on media to retail outfits or even maintaining a download site for it, the medium still gets dominated by huge entities that have brand recognition, the ability to advertise etc. and plus the occasional small player who gets lucky and strikes gold like Flappy Bird (and those tend to flame out after a game or three). It was probably a gold mine to jump into in the early days when the iPhone and later the iPad were just starting to catch on, just like the Internet and computer gaming made a lot of money for early adopters. But the market was bound to mature - and become corporatized and dominated by big conglomerates - just like all the rest. This is something that we already knew and does not surprise anyone.
    baconstangchia
  • Reply 10 of 23
    ration alration al Posts: 81member
    Seems that most iOS device buyers are accustomed to paying only for the best of both H/W and S/W! I don't mind paying for good quality and ease of use.
    calibaconstang
  • Reply 11 of 23
    sflocalsflocal Posts: 5,512member
    While the app store introduced developers to the masses, it also turned their apps (and work) as a commodity.  People nowadays feel that things should be free or $0.99 and that is a shame.  I value my time when I develop software and today's click-to-download impulse-buy app economy numbs the consumer.  

    I have quite a few apps on my iPhone that I paid over $20 for.  They are awesome, well-developed apps where the developers obviously took the time and effort to really polish them.  I only found them after doing some serious searching for in the app store that were not apparent to most, and that is a shame.

    That being said, most apps are crap. Garbage.  I abhor "freemium" apps, and I hate the free ad-infested ones.  It just detracts from the experience, and causes more problems than its worth.  This is what the App store evolved to.
    ration alcalibaconstang
  • Reply 12 of 23
    lkrupplkrupp Posts: 8,998member
    foljs said:

    So? 90% of apps are crap. And of the remaining 10%, 90% is again crap (but of course less than the 90%)

    Exactly. Most apps are crap and do nothing but take up space on a server somewhere. I’ve downloaded a few of them and they are indeed crap or feature locked until you pay money. Hey but “FREE” is the way to go!
    cali
  • Reply 13 of 23
    emoelleremoeller Posts: 521member
    This isn't surprising, but I'm wondering how "in app" purchases were taken into consideration (they were noted in the article, but it isn't clear how)?

    As an investor at the end of 2015 I checked out the S&P 500 stock listing and was surprised to find that only 28 companies (5.6%) of the 500 companies listed made more than 50% of all of the profits for the year.  


    Since someone brought up "occupy", excluding the top 5% high net worth individuals the average of the remaining 95% of US residents has a negative net worth (net worth compares mortgages, credit cards, and other forms of debt to all savings (but excludes social security or retirement benefits) and assets).


  • Reply 14 of 23
    apple ][apple ][ Posts: 9,233member
    Ok, I'm probably guilty of adding to the revenue of probably one of the richest devs around, the 1%, because I admit to buying a $4.99 gems chest in Clash Royale yesterday. :#


  • Reply 15 of 23
    wood1208wood1208 Posts: 2,504member
    Be Aware and sorry to say but Is this site called "Appleinsider" turning against Apple ? All the articles I see is deliberately pointing issues which may not even exists ?
  • Reply 16 of 23
    rogifan_newrogifan_new Posts: 4,297member
    wood1208 said:
    Be Aware and sorry to say but Is this site called "Appleinsider" turning against Apple ? All the articles I see is deliberately pointing issues which may not even exists ?
    Someone in my twitter feed said Apple's problem is not a lack of talent or ideas but that it has no editor. Boy that's rich coming from the tech media. If anything needs editing it's the constant deluge of Apple analysis spiting stuff out every day. Any thought that comes in to someone's head turns into a tweet or blog post which then gets passed around the tech bubble and becomes the meme for the day/week.
    baconstang
  • Reply 17 of 23
    mcdavemcdave Posts: 1,594member
    The App Store needs some serious trimming Phil!  I'm sick of Android look-alikes, adopting the Android UI when I bought an iPhone for the iPhone UI (& other things).  Developers who put their own convenience ahead of the customer should be down-scored or banned.  In fact, failure to adopt iOS-specific frameworks (TouchID, Metal, Apple Pay etc) should also attract a down-scoring.

    A good example would be this app with it's cruddy comment TextView handling! Down-score!
  • Reply 18 of 23
    croprcropr Posts: 1,041member
    As an app developer, I can say that the search algorithm in the app store is to blame.  Apple prefers to display apps from well known developers (Google, Facebook, ...) that are only vaguely related to the search terms iso. displaying apps from lesser known developers that are matching the search terms, even if these apps get good ratings. Apps are much easier to find on google.com than in the App Store. Basically it means that app developers can no longer use the App Store as the sales channel, because Apple is neglecting its marketing. 
    This a number of consequences.  Nowadays, every app needs to have its own marketing campaign (website, facebook page, twitter account, Google adwords campaign, ...).  For non games apps, the revenue model is also moving away form the 30% commission scheme, as the added value of the App Store is no longer in line with the 30% .   More and more apps are offered for free and the money is collected via the related website, which needs to be there anyway.



    edited May 2016
  • Reply 19 of 23
    foljsfoljs Posts: 381member
    foljs said:

    So? 90% of apps are crap. And of the remaining 10%, 90% is again crap (but of course less than the 90%).

    This leaves us with 1% of apps -- and they should have 99% of revenue if it was just them, but they have 94% -- 5% more going to the 99% of crap apps.

    In case you think that's too little, 1% is still like 10,000 - 15,000 apps out of over 1,000,000 apps. 

    Do you even know 10,000 non mobile apps? Do you even visit 10,000 web pages?

    In search there's just Google and (sort of) Bing. In Social there's just Facebook, Twitter and Google+. In video it's 99% YouTube.

    Those are actual monopolies and problematic situations -- not 10,000 good apps out-winning 1,000,000 of whatever sort people threw out at the App Store.


    YouTube is a problem and a monopoly? Do tell...
    Do tell what? Is that really news?

    It might not be a monopoly in the "US legal" terms (like e.g. AT&T once was deemed to be), but it's a de facto monopoly of online video.

    And it also uses that position to power-struggle creators, etc on its term, e.g:

    http://www.digitalspy.com/tech/vod/news/a675053/youtube-will-remove-all-content-from-artists-who-dont-sign-its-red-subscription-deal/

    And, yes, when ONE site has 90% of eyeballs for online video, it is a problem. Might be convenient to you, but it's not a sign of a healthy market.

  • Reply 20 of 23
    gatorguygatorguy Posts: 22,826member
    foljs said:
    foljs said:

    So? 90% of apps are crap. And of the remaining 10%, 90% is again crap (but of course less than the 90%).

    Do you even know 10,000 non mobile apps? Do you even visit 10,000 web pages?

    In search there's just Google and (sort of) Bing. In Social there's just Facebook, Twitter and Google+. In video it's 99% YouTube.

    Those are actual monopolies and problematic situations -- not 10,000 good apps out-winning 1,000,000 of whatever sort people threw out at the App Store.


    YouTube is a problem and a monopoly? Do tell...
    Do tell what? Is that really news?

    It might not be a monopoly in the "US legal" terms (like e.g. AT&T once was deemed to be), but it's a de facto monopoly of online video.

    And it also uses that position to power-struggle creators, etc on its term, e.g:

    http://www.digitalspy.com/tech/vod/news/a675053/youtube-will-remove-all-content-from-artists-who-dont-sign-its-red-subscription-deal/

    And, yes, when ONE site has 90% of eyeballs for online video, it is a problem. Might be convenient to you, but it's not a sign of a healthy market.

    If ONE company, Apple, collects 90% of the smartphone profits in the mobile space is that a problem for you too? I imagine you'd say no but would others have a valid argument that it's a sign of an unhealthy market? If that company, Apple, also uses its wealth to power-struggle manufacturers, component providers, app creators, and others on its terms do you have a problem with it? Doubt it. 

    By the way I didn't know that YouTube had 90% market share for online video. That's impressive. Where did you find that? 
    edited May 2016 singularity
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