Report: Most Subscription-Based Apps Do Not Make Money

[MacRumors]

Most mobile apps with subscriptions do not make money, a new in-depth analysis finds.

The "State of Subscription Apps" report comes from RevenueCat (via TechCrunch), a prominent mobile subscription toolkit provider. With nearly 30,000 apps utilizing its platform for monetization management, RevenueCat is able to provide a reliable overview of the subscription app landscape thanks to its data collection capabilities. The analysis delves into data from over 29,000 apps and 18,000 developers, collectively responsible for more than $6.7 billion in revenue and over 290 million subscribers.

RevenueCat found that while the top-performing 5% of subscription apps amass revenue 200 times greater than those in the bottom quartile, the median monthly revenue for apps after one year is less than $50. Only 17.2% of apps cross the $1,000 monthly revenue mark. Reaching this milestone significantly boosts the likelihood of further financial growth, with 59% of these apps progressing to achieve $2,500 in monthly revenue, and 60% of those reaching the $5,000 mark. A mere 3.5% of apps achieve $10,000 in monthly revenue.

Health and fitness apps generate at least twice the revenue of all other categories combined, both in the bottom quartile and among the top 5% of earners. In contrast, travel and productivity apps face the most significant challenges, with even the top performers in these categories struggling to make over $1,000 per month after a year on the market.

Despite these statistics, the subscription app market continues to grow and the average price for monthly subscriptions has increased by 14% from $7.05 to $8.01. However, the report also noted a recent shift in consumer behavior, with a 14% drop in subscriber retention over 12 months.

Article Link: Report: Most Subscription-Based Apps Do Not Make Money

 

[disruptedDD]

Why developers choose to use subscriptions in the first place when they can certainly choose to use one-time payment option! Most of them didn't make the app quality good enough to deserve subscription fees.

 

[kiranmk2]

Almost as if people would prefer to buy an App outright! Are we going to come full circle to 2010?

 

[contacos]

They are certainly not seeing my money. Why should I pay a subscription for an app like "Splitwise" which was developed once and hasn't had any changes (as far as I can tell) since. What am I paying them a monthly fee for? NOPE

Subscriptions only make sense for things like Netflix to me where you actually have new content every day / month

 

[75Batt]

Good! They don’t deserve it

 

[onlinespending]

Yeah because it’s a deterrent for business. Task apps that don’t require any server use or other perpetual demands of resources from the developer now feel entitled to monthly fees. People are fed up and will just buy a task app that has a one time fee

 

[zachz]

Why developers choose to use subscriptions in the first place when they can certainly choose to use one-time payment option! Most of them didn't make the app quality good enough to deserve subscription fees.

I’ve noticed that every app I’ve paid for (I refuse to pay for subscriptions except on a very rare occasion where it’s like $10 a year), the one time-purchase apps are much better quality, better supported, and just overall more pleasant to use.

I feel like with subscriptions they’re just using it to suck people in and then not caring. Even more so when it’s an annual subscription.

 

[macos9rules]

Great to read this news! Subscriptions only make sense for media-based apps that keep adding content, like Netflix, Spotify, Apple Music, etc.

 

[sjsharksfan12]

One of the reasons I don't use Fantastical is I refuse to pay for a Calender subscription. Why pay a subscription when Apple's works perfectly fine? Now if Fantastical offered a one time payment and was rich in features, I would probably consider it, but that Subscription that is less than a cup of coffee would grow over time with more and more subscriptions. Then you just need all the time to figure out all the subscriptions you actually have and it really does add up.

With that said I do pay for some subscriptions (Pocketcasts, Apple Music, ESPN+) because I use those every day and those are actually services that enhance my use of the phone.

 

[vagos]

When you decide to price something like SaaS the choice is easy. You need recurring revenue to cover recurring expenses like servers. But with apps it's not like that. The server is your phone and it doesn't cost money to the developer to keep the app running. Therefore why pay monthly when a one-time-payment should suffice ?

Plus in smartphones people are "educated" to get everything for free. It's harder to convince someone to pay a monthly fee for what should (in their eyes) be free.

Disclaimer: I'm a web dev and use subscriptions for my apps.

 

[coffeemilktea]

In contrast, travel and productivity apps face the most significant challenges, with even the top performers in these categories struggling to make over $1,000 per month after a year on the market.

Well, there goes my plan of making a subscription-based app that displays memes of "cats in offices" but with the meme's text poorly Google-Translated into whatever the local language in the user's country is... my brilliant and fool-proof business plan has gone up in smoke, so I guess I won't quit my day job just yet. 😩

 

[dguisinger]

I would prefer a "lifetime subscription" model, aka try before you buy.

Download for free, get a limited amount of time to use it on trial, and then get full functionality with a one-time subscription... because I also don't like paying for an app up front without having seen that its actually useful to me.

 

[N82]

I bought apps when the prices were still 1 or 3 euros, I don't start with subscription models.

 

[sw1tcher]

Most mobile apps with subscriptions do not make money, a new in-depth analysis finds.

I wonder if these apps would make money if Apple reduced their (15% or 30%) cut of the subscription revenue, or would they still be money losers?

 

[anakin44011]

Do most 'other' apps make money?

There's something suspicious about the language/analysis.

I mean...most recorded music doesn't make money, regardless of purchase/streaming model. This is why we have record labels - the few hits would pay for the numerous stinkers.

 

[bcortens]

When you decide to price something like SaaS the choice is easy. You need recurring revenue to cover recurring expenses like servers. But with apps it's not like that. The server is your phone and it doesn't cost money to the developer to keep the app running. Therefore why pay monthly when a one-time-payment should suffice ?

Plus in smartphones people are "educated" to get everything for free. It's harder to convince someone to pay a monthly fee for what should (in their eyes) be free.

Disclaimer: I'm a web dev and use subscriptions for my apps.

I think the big problem is Apple doesn’t allow proper upgrade pricing. Sure you can release a whole new App but then you lose all your reviews, existing installs, and user data doesn’t auto-migrate.

 

[Scott H]

I will pay a reasonable one time purchase fee for an app, but never a monthly subscription. To me it makes no sense to have recurring monthly fees.

 

[Zwhaler]

Fascinating stats.

Remember folks, money follows value. If your app is only chasing money people will smell it and you'll end up on the losers pile.

 

[Mr. Heckles]

When you decide to price something like SaaS the choice is easy. You need recurring revenue to cover recurring expenses like servers. But with apps it's not like that. The server is your phone and it doesn't cost money to the developer to keep the app running. Therefore why pay monthly when a one-time-payment should suffice ?

Plus in smartphones people are "educated" to get everything for free. It's harder to convince someone to pay a monthly fee for what should (in their eyes) be free.

Disclaimer: I'm a web dev and use subscriptions for my apps.

You’re a dev?

I can name apps off the top of my head that require servers/cloud that isn’t my phone.

YouTube (ads supported, but you can have a subscription)

Fastmail (for emails)

1Password (yes, bad example, but people are using their servers to connect other devices)

I can list more also.

I can see some apps needed or, but I can see some not at all.

 

[sw1tcher]

Why developers choose to use subscriptions in the first place when they can certainly choose to use one-time payment option!

It's not hard to see why

(A) one time payment of $99.99 and buyer can use the app for as long as they want or when it's no longer supported by the OS, or

(B) $9.99/mo to use the app

Obviously, (A) is better for the consumer. But (B) is better for the developer because if you want to use an app for a full year, you'd have paid $119.88

 

[al256]

I'll accept a middle ground where I can purchase an app that will be updated for the next two to three years before I have to buy another supported version.

 

[sulli18]

I think, at the end of the day, people just don't like getting fleeced. Especially on a recurring basis.

So, charge an appropriate amount for the value you are providing. And charge it once. And people will fall in love with the thing. $60/year for a Sudoku app is just not something the average player can justify - it automatically makes it appeal only to niche players (completely made up example).

Some apps warrant subscriptions, but most have no recurring costs to justify them. And even though the model is pushed by Apple (because it also means they earn more) does not mean it's sustainable for users or app developers.

 

[StralyanPithecus]

Most subscription-based apps don't justify paying a subscription, no wonder they are loosing money, people are not so dumb...

 

[Phogro]

I wonder if these apps would make money if Apple reduced their (15% or 30%) cut of the subscription revenue, or would they still be money losers?

Still money losers. According to the article, the median monthly revenue is $50 or $600 annually. An extra 15-30% isn't going to save them.

 

[iLoveDeveloping]

Good, can we get rid of them now? I like to buy apps not rent them! This ain’t no blockbuster!