RevenueCat has released its report on the state of subscription apps (via TechCrunch). The study analyzed more than 29,000 apps and 18,000 developers, which together generated more than $6.7 billion in tracked revenue from 290 million subscribers.
While these are big numbers, the report shows that the top 5% of apps generate 200 times more revenue than the bottom quartile after the first year. More impressively, the app generates less than $50 per month after a year.
However, once the app becomes popular, it is more likely that the revenue will only increase. RevenueCat says 17.2% of apps will reach $1,000 in monthly revenue. Once they reach that point, 59% of these software reach $2,500, and 60% of those who reach the milestone can grow to $5,000.
But since then, revenue has been narrowing and only 3.5% of apps will reach $10,000 in monthly revenue. While that might be enough for an indie developer to survive, it wouldn’t be the case for a mobile-first startup to become profitable.
Who wins in the world of app developers?
The study finds that health and fitness apps are more likely to generate more revenue after a year, performing at least twice as much as the other categories combined. On the other hand, travel and productivity apps are making less than $1,000 per month after a year in the app stores.
RevenueCat also shows that the most common monthly subscription price is still $10, but the average monthly subscription price is now around $8.00.
Other goodies include the fact that North American apps monetize 4x better than the global average. At the same time, the Japanese and South Korean markets earn better on Android than on iOS, which is a surprising fact.
In short, the world of developers is not easy. With more and more apps betting on subscriptions, users don’t always find this option useful. What they usually do is pay for the app for the time they need it and then cancel it in favor of another service. Resubscribing happens more often with media and entertainment apps.
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Additionally, your subscription may not be enough to keep the developer you love adding new features to the app. Diversifying projects or adding other income could be a way to help some of these workers profit.
You can request a full report from RevenueCat.