Most apps with subscriptions fail to make more than $1,000 per month

AppleInsiderAppleInsider
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A report surrounding mobile app subscriptions provides in-depth data from across 2023, which shows how most struggle to make enough to get by.

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It's no secret that working as an app developer isn't a guarantee of constant income. Most apps in existence are throw-away projects or simple tools with no avenue for generating revenue.

A report from RevenueCat called "State of Subscription Apps" contains data about 30k subscription apps across 290 million subscribers. Relevant data points were first shared and broken down by TechCrunch.

The data from the report is a unique look at the app subscription business across Apple's App Store and the Google Play Store since it is the single largest dataset outside of the companies themselves. Many data points remained flat year-over-year, like the common $10 price for monthly subscriptions, though average prices have crept up by 14%.

Only 17.2% of apps will reach $1,000 in monthly subscriptions, but those that do will grow more easily. About 59% of apps that reach $1,000 in monthly revenue reach $2,500, and 60% of those will reach $5,000.

Only 3.5% of all apps reach $10,000 in monthly revenue.

The retention rate of subscribers after 12 months dropped by 14% year-over-year, but 10% of those re-subscribed within another year.

"We definitely saw a tightening, which would make sense, because a lot of apps were raising prices -- inflation-induced price raises -- which then, of course, would lead to people churning as well," said RevenueCat CEO Jacob Eiting. "Overall, the whole ecosystem seems to have grown pretty well, but there has been some readjustment."

Eiting continues with predictions for 2024, suggesting that AI will be a disruptor over the next year. He states it isn't the death of mobile as some have predicted, but a second act since mobile is the interface for AI.

The State of Subscription Apps 2024 is a dense report filled with metrics meant to answer any question a person could have about the app subscription market. Anyone can view the 120-page report by providing their email to RevenueCat.



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Comments

  • Reply 1 of 11
    entropysentropys Posts: 4,168member
    I am totally heartbroken. Shattered.
    just have a decent up front price and avoid the complicated revenue stream management. 
    timpetusbonobobStrangeDayswatto_cobra
  • Reply 2 of 11
    zeus423zeus423 Posts: 242member
    I don't need another monthly bill. I'm happy to pay a fair price, but I'm not paying for eternity.
    lam92103timpetusbonobobappleinsideruserStrangeDayswatto_cobra
  • Reply 3 of 11
    chasmchasm Posts: 3,306member
    entropys said:
    I am totally heartbroken. Shattered.
    just have a decent up front price and avoid the complicated revenue stream management. 
    That doesn't really work for all business models. Your electric bill, just for starters, has the monthly price adjusted based on your usage, not a flat rate every year based on everyone's average use.

    While I also like a fair and reasonable upfront one-time price for some apps, allowing for developer profit of course, ongoing providing of service through an app -- let's take Netflix for example -- again cannot really work like that, as the upfront price (if there was one) would assume a lifetime of usage, and would be too expensive for nearly anyone to afford.

    The one advantage of subscriptions is that you can start and stop them as you like. I had Disney+ in 2022 for a year, and enjoyed the shows I watched, but did not renew at the end of the year as I'd watched all I wanted to watch from them at the time. This May, I will renew again because the new series of Doctor Who will be on. I might just cancel when that series is done for its season, or perhaps Disney+ will have a reason to keep me on for a while longer. Either way, I'll certainly save money compared to signing up and then forgetting to ever cancel, even after I've stopped watching.

    So the disadvantage of having to do a modest amount of "management" weighs against the advantage of (if you choose) only paying for what you "use." Many apps -- most, really -- have an upfront price you pay and then you "own" it and can use it as much as you like for however long the app runs on your device. For most app models, this works well. But it doesn't work well for every service.
    Alex_Vdewmewatto_cobra
  • Reply 4 of 11
    godofbiscuitssfgodofbiscuitssf Posts: 67member
    zeus423 said:
    I don't need another monthly bill. I'm happy to pay a fair price, but I'm not paying for eternity.
    And how do you pay a fair price if there’s no mechanism OTHER than subscription for charging for upgrades?
    watto_cobra
  • Reply 5 of 11
    humbug1873humbug1873 Posts: 125member
    That's one of the points missing in the App Store. My favourite model, start with a free 'test run', if the product convices 'buy it' (for a one off price) and give the developer a good way to eventually charge for an upgrade when the next big release comes out. 

    A developer has to jumps to all kinds of hoops to reach that goal, might need to update by offering a 'new' product in the app store ... and that whole process is fraught with errors since Apple makes such a poor job in keeping bad actors out of the app store (the search is broken and delivers copy cats and ads instead of what you are looking for).

    I guess the poor App-Store experience is by intend .. since Apple figured out a way to rip off more money by pushing developers into subscription models for apps or 'stacks of gold' in games.
    watto_cobra
  • Reply 6 of 11
    beowulfschmidtbeowulfschmidt Posts: 2,141member
    godofbiscuitssf said:
    zeus423 said:
    I don't need another monthly bill. I'm happy to pay a fair price, but I'm not paying for eternity.
    And how do you pay a fair price if there’s no mechanism OTHER than subscription for charging for upgrades?

    If an app provides an ongoing, worthwhile service, then yeah, a subscription is worth it.  If a subscription is just to unlock static features, not so much.

    For instance, as mentioned by others, something like Netflix works as a subscription.  However, the AllTrails app offers a $36 per year subscription that doesn't offer anything but additional functionality in the app, and nothing that requires an ongoing service.  If they were to offer that additional functionality for a fee, and then offer map upgrades periodically for a fee, I'd be hopping on that in a heartbeat.  As it stands, I don't need to subscribe to hike/bike.
    bonobobStrangeDayswatto_cobra
  • Reply 7 of 11
    lam92103lam92103 Posts: 126member
    Like .... Duh. You can't just copy paste Netflix's business model and then complain it doesn't work for your business.


    watto_cobra
  • Reply 8 of 11
    MacProMacPro Posts: 19,728member
    I don't have many subscription-style apps, but those I have are worth it, I have to say. Adobe's Photographers' Bundle is the best example. The rate of changes with AI has Adobe updating almost every other day. I can't imagine how far behind Photoshop, etc., you would get if you had to wait for the 1990s-style new versions to come around. I am half expecting Topaz to go this route. Currently, they run with free updates till a major bump, then hit you with a larger fee.  I prefer a simply low cost monthly fee as with Adobe.

    Now this is far removed from crappy apps that would never have seen the light of day had the developers had to run a 1990s-style business.  Printing literature, manuals, disk duplication, trade show, marketing, shipping, accounting ... need I go on?  I know, I owned a software company in the 1990s.  They thought they had it easy and failed.  Tough, move on.
    gatorguywatto_cobra
  • Reply 9 of 11
    croprcropr Posts: 1,125member
    I am owning an app development and the company has developed 7 apps for the App Store.  

    Giving you some figures.  The initial development of a single app costs between $50K and $100K.  Maintaining an app costs about $10K per year. 5 of my apps were still loss making after 2 years and have been abandoned.  1 app reached about break even, but the cost of maintenance would be higher than the additional income and has been abandoned as well.

    The only app that is profitable is an electronic voting app for general assemblies for corporations and large non profit organisations.  The business model is event based.   The organisation pays  a fixed fee per general assembly per invited member/shareholder.   Moving to a subscription based model does not really makes business sense here.

    The app was originally not a native i\OS app, but a PWA (progressive web app).  On request of our customers we made  a native app for the members/shareholders casting their votes.  The iOS app, as well as the Android version, is free of charge

    Managing the election by the board of the organisation is still a web based only app.  This app includes the payment. As such we don't pay the Apple tax.  If you think that is not fair, think about the other 6 apps, where Apple made a decent profit while we lost money and think about our continuous investment  in Apple hardware (Macs + iPhones  + iPads) we need for the development and maintenance of the apps.  But don't think we attracted additional customers thanks to the availability of the iOS app.  A customer survey made clear we only have customers as a result of our own marketing efforts
        




    edited March 13 muthuk_vanalingamappleinsideruser
  • Reply 10 of 11
    thrangthrang Posts: 1,010member
    Too many subscriptions in our lives. End of story.
    StrangeDayswatto_cobra
  • Reply 11 of 11
    StrangeDaysStrangeDays Posts: 12,886member
    chasm said:
    entropys said:
    I am totally heartbroken. Shattered.
    just have a decent up front price and avoid the complicated revenue stream management. 
    That doesn't really work for all business models. Your electric bill, just for starters, has the monthly price adjusted based on your usage, not a flat rate every year based on everyone's average use.

    While I also like a fair and reasonable upfront one-time price for some apps, allowing for developer profit of course, ongoing providing of service through an app -- let's take Netflix for example -- again cannot really work like that, as the upfront price (if there was one) would assume a lifetime of usage, and would be too expensive for nearly anyone to afford.
    You’re comparing apples and oranges. Apps that sell content have huge ongoing costs. And electricity is a consumable utility, as is water and internet…Even weather apps could argue you’re paying for the constant data they license. But an FTP client? A photo editor? Nope. 

    Not interested in renting software when a purchase is appropriate.
    edited March 13 watto_cobra
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