Majority of mobile subscription apps struggle to yield profitable returns. This insight emerged from RevenueCat’s analysis that showed the top 5% of apps generating revenue that is 200 times higher than the lowest performing quarter.
Constant innovation and adaption to user trends are key markers of successful mobile apps. They engage in effective monetization strategies and highly focus on user engagement. However, in the highly competitive space, only around a fifth of all apps seem to generate a significant monthly income of $1,000.
From achieving $1,000 to hitting the $10,000 mark, app developers face a steep journey – a challenge for many. However, once an app starts earning $10,000 each month, its chances for further significant growth increases.
A miniscule portion of apps – around 0.5% manage to pull in revenues
A miniscule portion of apps – around 0.5% manage to pull in revenues over $50,000 per month. This high-level success is typically enjoyed by established tech companies and large corporations with substantial resources for app development and marketing.
In terms of categories, health and fitness apps stand out for their potential to earn good profits after the first year. A moderate curve in gaming apps show their popularity and profitability, despite their highly competitive market.
Education apps and those in lifestyle sectors see consistent growth in downloads but not profits – these are usually free with in-app purchases, reducing their revenue potential. In contrast, social networking and entertainment apps generate substantial revenue through ads and sponsorships, owing to high user engagement.
North American, Japanese, and South Korean apps seem to out perform
Geographically, North American, Japanese, and South Korean apps seem to out perform in the global market scene, but show a downward trend in subscriber retention. This puts immense pressure on app developers to continually enhance app features to keep users engaged and deter cancellations.
Despite economic challenges, the industry is showing growth with an increase in app downloads converting into paying customers. Prominently, many churned subscribers are re-subscribing, indicating an increase in reactivation rates, drastically in the media and entertainment sector.
In terms of costs, the analysis shows that monthly subscription rate remains fairly stable at $10. However, mean monthly subscription costs increased by 14% from $7.05 to $8.01. Yearly subscription rates interestingly saw a slight decline, potentially reflecting a change in consumer preference towards shorter subscription periods.
In conclusion, the need of the hour for apps is to constantly innovate, adapt, and maintain a user-friendly and engaging platform to secure its position in the competitive marketplace. The diverse trends in the industry, and the growing potential for profitability make it a promising sector for investment and innovation.
