Disappointing revenue statistics for 30k mobile apps explains why developers continue to push for subscriptions

It is expected that next year mobile application developers will aggressively promote the right to use by subscription. Figures from RevenueCat, which analyzed more than 30,000 applications, show that the majority of them are trying to achieve a revenue of $1000 per month.

RevenueCat develops subscription tools for mobile applications, reports ArsTechnica. Among the company's clients are Reuters, Buffer, Goodnotes, PhotoRoom, and Notion. It is stated that 90% of applications with in-app subscription platform use RevenueCat. Therefore, it is worth considering that this form of monetization is beneficial for companies.

Only about 17% of the surveyed applications earn at least $1000 monthly. The percentage of surveyed applications generating higher monthly revenue is even lower.

RevenueCat notes that after an application reaches a revenue of $1,000 per month, it is more likely to earn $2500 per month (59% of those who reached $1000 reached this mark) or even $5000 per month (60% of those who reached $2500 per month reached this mark).

Imbalanced Revenue

RevenueCat's data indicates a significant imbalance in revenue distribution among mobile applications with subscriptions: the report found that after 12 months of launch, the top 5% of applications bring in 200 times more revenue than the bottom quartile. For new applications, the average monthly revenue after a year is "just under $50."

However, as advertising expenses continue to decline and developers seek ways to generate steady income to support, maintain, and enhance applications, subscription is expected to remain the primary strategy for developers.

Subscription Fatigue

Issues with subscription for mobile applications include not only convincing people to pay for the app, but also convincing them to do it repeatedly. RevenueCat notes that compared to the 2023 report, the share of monthly subscriptions that are retained after a year has decreased by 14%, affecting both the best and worst performers. Among other findings, monthly subscriptions have an average first update rate of over 60%, but only retain 36% of the initial number of subscribers when it comes time for the third update.

Developers hoping for steady income are targeting users who are increasingly deterred by subscription fatigue. According to a 2022 report prepared by consulting company Kearney, 42% of consumers "feel they have too many subscriptions." But while more industries focus on subscription, some believe that mobile applications are a case where periodic payments make more sense than in other businesses, such as printing.

Higher Prices

It is expected that subscription prices for mobile applications will rise over the next year. In the year since the publication of RevenueCat's 2023 report, the average monthly rate has increased by 14%, from $7.05 to $8.01. Factors such as rising customer acquisition costs, interest in appearing as a premium app, and AI can pose economic challenges for developers and influence pricing.

But RevenueCat also expects that developers will experiment more with other sources of revenue over the next year, such as in-app purchases and partnerships.