Report: Most Subscription-Based Apps Do Not Make Money

[Kevin2055]

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

Lmao, some apps just converted one-time price to annual subscription price of the same amount. No wonder they failed.

 

[Mansu944]

Good, I am tired of not "owning" anything.

 

[TigerNike23]

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?

I would hope for the sake of users they’d still lose money. Bad business is bad business.

Allow me to buy your app for $20 instead of charging $2.99 a month in perpetuity.

 

[MikeCam]

There's no way Pokémon Sleep isn't profitable lol

 

[yossi]

Anyone else remember before Google Maps was released, we were being charged $40 a month to use a navigation app like Garmin?

 

[timber]

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.

That's a longtime fail of the Appstore.

You either get pay once and never again (within a model of downwards spiraling prices) or go IAP/subscribe model.

Beyond services/free apps and F2P games i wonder if anyone thrives.

 

[TigerNike23]

Absolutely shocking!

Problem is devs are lazy and do not offer upgrades with enough worthwhile features for users to pay for upgrades.

Example: Microsoft Office, while 365 is largely subscription at this point most home and light business users could easily still be using Office 2003. The only worthwhile upgrades since then, IMHO, is security and OS compatibility updates.

The slight pushback I have about 365 is the 1 TB of storage per account. I paid $70 for it, and Office is just a bonus.

 

[TigerNike23]

Anyone else remember before Google Maps was released, we were being charged $40 a month to use a navigation app like Garmin?

How about VZ Navigator and other carrier based garbage GPS apps?

 

[corbindav]

I would recommend everyone look at the API changes that go into Android, iOS, macOS, and the web each and every year, and that will tell you why so many apps try to have subscription models.

We're not in 1994 anymore, it's pretty difficult to write a piece of software that can keep functioning untouched for years. There's almost always ongoing upkeep for any modern application, and Apple also charges $100 per year just for the privilege of publishing or signing anything. I develop a few browser extensions and none of them are on Safari, because I am 100% sure I could not make that $100/yr back.

 

[turbineseaplane]

That's a longtime fail of the Appstore.

You either get pay once and never again (within a model of downwards spiraling prices) or go IAP/subscribe model.

This is not an accident either

Apple is all in on the "Services push"

(please pause while I vomit 🤮)

 

[turbineseaplane]

I would recommend everyone look at the API changes that go into Android, iOS, macOS, and the web each and every year, and that will tell you why so many apps try to have subscription models.

We're not in 1994 anymore, it's pretty difficult to write a piece of software that can keep functioning untouched for years. There's almost always ongoing upkeep for any modern application, and Apple also charges $100 per year just for the privilege of publishing or signing anything. I develop a few browser extensions and none of them are on Safari, because I am 100% sure I could not make that $100/yr back.

Would you say part of the issue on iOS is being locked to the restrictions of the Apple App Store?

I assume on more open platforms, where things like upgrade pricing, and direct to consumer pricing, are possible, the situation is better for you?

It seems like so much software has become too expensive when a middle man (Apple) is forcing themselves into the mix.

 

[B S Magnet]

If subscription-oriented developers find themselves in a revenue pickle from customers (subscribers, underwriters) who are leaving the product due to fatigue from a continuing micro-transaction renewal on a product whose core functions don’t refresh fundamentally (and the developer believes they have a sincerely high-quality product with a track record of truly satisfied customers over time), then there is still the per-device licensing model which enables end users to purchase a licence to use the application, in perpetuity, but confined to the one licensed device.

This would be akin to the MorphOS model of software licensing.

 

[B S Magnet]

Anyone else remember before Google Maps was released, we were being charged $40 a month to use a navigation app like Garmin?

No, I don’t remember. I was using Mapquest.

 

[msackey]

Another issue is that companies seem to have an impression that their app is cheap because it costs less than “A cup of coffee per month.” But with so many apps and services requiring a subscription these days… I’d never get to drink a coffee! Any apps requiring a subscription are competing for the relatively small amount of money I am willing to spend on apps every month.

Totally agree here.

I also find the "coffee" analogy problematic because whenever I am considering a coffee or "coffee-like" purchase, I am actually thinking about whether I do or do not want to indulge in that purchase.

A subscription model TOTALLY HIDES that process of active thinking. In other words, because a subscription model is on an ongoing basis that requires no active input on my part other than the first purchase, it means that each time the subscription renews I am actually not making an active choice of whether to "indulge" or not to "indulge". That's a BIG reason I do not like subscription models. It's like a slow leak that you are kinda aware of, but kinda not aware of because it blends into the background and it is not at the fore of your thinking.

 

[Kastellen]

I would recommend everyone look at the API changes that go into Android, iOS, macOS, and the web each and every year, and that will tell you why so many apps try to have subscription models.

We're not in 1994 anymore, it's pretty difficult to write a piece of software that can keep functioning untouched for years. There's almost always ongoing upkeep for any modern application, and Apple also charges $100 per year just for the privilege of publishing or signing anything. I develop a few browser extensions and none of them are on Safari, because I am 100% sure I could not make that $100/yr back.

Yeah, pretty clear that the number of people on this thread who have ever been in business management is near zero.

 

[B S Magnet]

I would recommend everyone look at the API changes that go into Android, iOS, macOS, and the web each and every year, and that will tell you why so many apps try to have subscription models.

We're not in 1994 anymore, it's pretty difficult to write a piece of software that can keep functioning untouched for years. There's almost always ongoing upkeep for any modern application, and Apple also charges $100 per year just for the privilege of publishing or signing anything. I develop a few browser extensions and none of them are on Safari, because I am 100% sure I could not make that $100/yr back.

Under this rubric, there’s no merit or point to open-source community-maintained software.

In this sense, I question your core argument.

 

[lupinglade]

Charging customers a subscription only makes sense for a constant service or content. The old free trial, paid activation and paid major updates are still the best option for standalone software for both users and developers.

We (Cyaneous) don’t do subscriptions for any of our apps. We also don’t do any tracking. You should own your purchased software.

 

[lupinglade]

Yeah, pretty clear that the number of people on this thread who have ever been in business management is near zero.

This is a problem with the current platforms, they are not friendly to developers. Constant major breaking updates are not conductive to quality software. And even then, charge an upgrade fee if you had to do major development due to an OS update - this won’t be an issue every year. Still, don’t nickel and dime your customers monthly.

 

[darkslide29]

This makes sense to me and my spending habits. I’ve spent hundreds and hundreds on apps paid outright over the years. But I have exactly zero subscriptions for apps. There have even been apps that switch to subscription model, and I just stopped using them. I would have gladly one-time purchased it.

 

[rwilliams]

Fantastical is one of my most used apps, and I think they definitely deserve the asking price. If you don't want to pay, that's fine - but that only means that if most people think like you, we'll end up with apps that lack features, ease of use and polish.

Fantastical is one of the best made, most polished apps on the App Store that you literally use on a daily basis for work and life. If that doesn't justify $60 yearly - nothing does. Which just means that we should accept a future with mediocre, ad-supported apps. Which is a future that seems to be coming. A shame.

I think Fantastical is a great app, but most of the features for which you need a subscription are of little use to me, as I now work in a Windows environment. Stuff like video calls, calendar openings, etc. just don't get any use on my Apple devices anymore. So I stick with the "basic" version that correlates to what I previously paid for from Flexibits.

 

[Geoffb9]

I don't mind to pay a subscription if I use the app all the time and it's worth it.
The problem is when those silly Apps require you a subscription for a service like Scanner or a Security Camera. Why do I need subscription? I already paid for the Software and/or the Hardware!
I totally avoid those ones.

 

[turbineseaplane]

There have even been apps that switch to subscription model, and I just stopped using them. I would have gladly one-time purchased it.

That's basically my approach

An App that should have a subscription .... should have one from the start

"Switching to one" is a major red flag

 

[corbindav]

Would you say part of the issue on iOS is being locked to the restrictions of the Apple App Store?

I assume on more open platforms, where things like upgrade pricing, and direct to consumer pricing, are possible, the situation is better for you?

It seems like so much software has become too expensive when a middle man (Apple) is forcing themselves into the mix.

Yeah, all my web apps and browser extensions are free, since most of them don't have recurring hosting costs (extensions run locally, most of the web apps are static pages that don't need a specific backend, etc.). The Chrome Web Store, Firefox Add-ons, and Microsoft Store (for Edge) don't have recurring publishing fees so there's not really a significant amount of money I need to make back. I also make one command-line tool for macOS, Windows, and Linux that I distribute as a free download on GitHub, so again no recurring costs there.

If I publish any of those on Apple's platforms with the existing free model, I'd be out $100 per year. I'd have to use one-time purchases and hope enough people don't scoff at the price (doubt it!), or spend even more time to create features that would make people more likely to buy it.

Under this rubric, there’s no merit or point to open-source community-maintained software.

In this sense, I question your core argument.

A lot of those open-source applications are not in the Apple App Store, or in the case of Mac apps, they are paid purchases instead of a free download. For example, LibreOffice is $8.99 from the App Store, but it's free on the official site. VLC Media Player is free but that app is so popular that regular donations can probably subsidize Apple's fees and extra requirements.

 

[coolfactor]

It's the $30+ for "game assets" that should be banned. Free market, though.

 

[Orange Bat]

I would love to see a return to app versions over subscriptions. You by an App for version 1 on a fixed fee. A couple years later, when the developers have made solid improvements, version 2 is released for another charge. The app stores could allow you to keep earlier versions if you want, or you could choose to upgrade. It worked for years and could be a boon to smaller developers trying to make a go with subscription models.