Revenue from Apple's App Store grows 60% to $5.4 billion

AppleInsider · January 13, 2017 8:19PM

An end-of-year report into non-gaming app revenues reveals a considerable yearly increase, with streaming media apps including Spotify, Netflix, and Pandora contributing heavily to the higher revenue levels seen by Apple's App Store.

Worldwide net revenue for apps in the App Store, excluding games, moved from $3.4 billion in the last quarter of 2015 to $5.4 billion for the same period to close out 2016, according to a new report report from research firm Sensor Tower. While the data suggests that Google Play is catching up, with a year-on-year increase of 82 percent to $3.3 billion, the App Store continues to generate the lion's share of the $8.7 billion overall revenue.

Excluding games, Spotify pulled in the most revenue from the App Store globally across all of 2016, with the streaming music service also taking the top spot in the overall download rankings, which include downloads from Google Play. Video service Netflix landed in second place, followed by messaging app Line, Pandora, and HBO NOW.

In comparing the Overall chart for global revenue with the App Store, there is a lot of similarity, with nine out of the top ten apps appearing in both, compared with only the top five for Google Play.

Despite Spotify generating the highest revenue when looking at the App Store for the entire year, Spotify dropped down two places in the chart when looking at the fourth quarter alone, beaten by Netflix. In the Overall chart, Spotify's position is worsened, moving to fourth place behind Tinder, but still beating Pandora.

According to the accompanying full year download charts, Facebook dominated all three charts, with Facebook, Messenger, and WhatsApp taking up the top three spots, and Instagram also making the top ten. Sensor Tower notes that the download charts are quite similar to those of last year, highlighting Uber as one of the few differences, attributable to its continued expansion efforts.

Apple itself revealed earlier this month that it paid out $20 billion to developers across the year 2016. New Years Day 2017 was also the biggest day for the App Store in its history.

cali · January 13, 2017 8:33PM

My God! Apple has made Goog a ton of money.

Googs annual iOS fee should reflect their App Store sales.

so if they make 3 billion in one year, charge them 3.1 billion the next.

retrogusto · January 13, 2017 8:43PM

I wonder if Apple makes more from Spotify subscriptions than they do from Apple Music subscriptions. They certainly make more from Spotify than Spotify does, since Spotify has been around or below break-even, and Apple's cut of in-app Spotify subscriptions is probably close to pure profit. Unless Apple somehow has much better margins for their comparable service, which seems unlikely, it stands to reason that they make more off of a Spotify in-app subscription. I guess they see it more as an element to their ecosystem that has other benefits.

boredumb · January 13, 2017 8:45PM

Er...so, even deeper pockets for the dimwits to lose their hands in?

rogifan_new · January 13, 2017 8:53PM

Where are they getting their data from? Or is this just guesstimates?

volcan · January 13, 2017 9:20PM

How does iQIYI show up as 8th overall when it doesn't show in the top ten of either App Store or Google Play?

volcan · January 13, 2017 9:26PM

cali said:

My God! Apple has made Goog a ton of money.

Googs annual iOS fee should reflect their App Store sales.

so if they make 3 billion in one year, charge them 3.1 billion the next.

I don't understand this post, or how it relates to the content of this article. Aren't all of Google's Apps free?

greginprague · January 13, 2017 10:20PM

volcan said:

How does iQIYI show up as 8th overall when it doesn't show in the top ten of either App Store or Google Play?

If it was #11 or 12 or lower even on both the App Store and Google Play it could easily jump the apps at the bottom of the top 10 that appear only on one store's list.

512ke · January 14, 2017 12:35AM

Too bad the U.S. govt may kill the Apple store as a "monopoly."

Don't look for the Trump administration to stand up for Apple. It's called payback for Apple's supporting Hillary.

Just one dude's prediction... of course others may disagree.

SpamSandwich · January 14, 2017 2:28AM

512ke said:

Too bad the U.S. govt may kill the Apple store as a "monopoly."

Don't look for the Trump administration to stand up for Apple. It's called payback for Apple's supporting Hillary.

Just one dude's prediction... of course others may disagree.

If Apple eventually fights a case based on the judge's opinion and it goes to the Supreme Court, the makeup of the court "should be" a bit more conservative, so theoretically private property rights would overrule the lower court's decision. Just guessing.

radarthekat · January 14, 2017 4:20AM

retrogusto said:

I wonder if Apple makes more from Spotify subscriptions than they do from Apple Music subscriptions. They certainly make more from Spotify than Spotify does, since Spotify has been around or below break-even, and Apple's cut of in-app Spotify subscriptions is probably close to pure profit. Unless Apple somehow has much better margins for their comparable service, which seems unlikely, it stands to reason that they make more off of a Spotify in-app subscription. I guess they see it more as an element to their ecosystem that has other benefits.

The fact Spotify doesn't make the top ten on Google Play, whereas its #1 on the iOS App Store is telling. It suggests that Spotify's paying users are heavily tilted toward iOS users, and that Andriod users tend to lean toward the free, ad-supported, service. Which is what is commonly evidenced to be the case across the board.

singularity · January 14, 2017 10:58AM

radarthekat said:

retrogusto said:

I wonder if Apple makes more from Spotify subscriptions than they do from Apple Music subscriptions. They certainly make more from Spotify than Spotify does, since Spotify has been around or below break-even, and Apple's cut of in-app Spotify subscriptions is probably close to pure profit. Unless Apple somehow has much better margins for their comparable service, which seems unlikely, it stands to reason that they make more off of a Spotify in-app subscription. I guess they see it more as an element to their ecosystem that has other benefits.

The fact Spotify doesn't make the top ten on Google Play, whereas its #1 on the iOS App Store is telling. It suggests that Spotify's paying users are heavily tilted toward iOS users, and that Andriod users tend to lean toward the free, ad-supported, service. Which is what is commonly evidenced to be the case across the board.

Or those people on the Android side are going through Spotify themselves for subscription so no money is creamed off by the app store owner.
All my subscriptions are through the provider and not the app stores. So Apple and Google get nothing from me.

brucemc · January 14, 2017 3:17PM

Although I believe there is some seasonality to the App Store figures, since many buy new apps with a new device purchase, with more subscription services it should be flattering some. If the App Store is $5.4B in last quarter, then this is moving towards being a $30B business for say 2017. With other Apple services like music, Apple Care, iCloud, etc, then the total Services must be closing in on $40B. And that may move towards $50B in 2018 given growth. Not a bad business

cali · January 14, 2017 5:51PM

volcan said:

cali said:

My God! Apple has made Goog a ton of money.

Googs annual iOS fee should reflect their App Store sales.

so if they make 3 billion in one year, charge them 3.1 billion the next.

I don't understand this post, or how it relates to the content of this article. Aren't all of Google's Apps free?

Google practically begs Apple to let them be the default search engine on iOS.

they pay something like 2 billion a year.

cropr · January 16, 2017 7:36AM

radarthekat said:

retrogusto said:

I wonder if Apple makes more from Spotify subscriptions than they do from Apple Music subscriptions. They certainly make more from Spotify than Spotify does, since Spotify has been around or below break-even, and Apple's cut of in-app Spotify subscriptions is probably close to pure profit. Unless Apple somehow has much better margins for their comparable service, which seems unlikely, it stands to reason that they make more off of a Spotify in-app subscription. I guess they see it more as an element to their ecosystem that has other benefits.

The fact Spotify doesn't make the top ten on Google Play, whereas its #1 on the iOS App Store is telling. It suggests that Spotify's paying users are heavily tilted toward iOS users, and that Andriod users tend to lean toward the free, ad-supported, service. Which is what is commonly evidenced to be the case across the board.

Not at all. It just shows that Android users are more intelligent and go directly to the Spotify site to buy their subscription, where the subscription is cheaper. The fact that in the Android app Spotify is allowed to have link to its website, while this is forbidden in an iOS app, contributes of course to this behaviour

volcan · January 16, 2017 5:12PM

cali said:

volcan said:

cali said:

My God! Apple has made Goog a ton of money.

Googs annual iOS fee should reflect their App Store sales.

so if they make 3 billion in one year, charge them 3.1 billion the next.

I don't understand this post, or how it relates to the content of this article. Aren't all of Google's Apps free?

Google practically begs Apple to let them be the default search engine on iOS.

they pay something like 2 billion a year.

I think everyone knows that but it still has nothing to do with your earlier post or the article.

crowley · January 16, 2017 5:44PM

Is this including ad revenue?

If not, how does YouTube make money for the App Store? Is YouTube Red an IAP in the US?

If yes, how on earth is this being measured?

Revenue from Apple's App Store grows 60% to $5.4 billion

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