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The latest findings from RevenueCat reveal a significant and growing disparity in revenue among mobile applications. In 2024, reports indicated that the top 5 percent of revenue-generating apps in nearly all categories amassed 200 times the income of the remaining 95 percent. This staggering ratio has expanded dramatically in the following year, with the top earners now making 500 times more.
Over the course of a year, the most successful 5 percent of apps in various sectors such as gaming, health and fitness, social media, and photography report earnings exceeding $5,000 monthly. In contrast, apps in the 25th percentile generate only $5 to $20 a month, depending on the category, while those in the bottom quartile earn approximately $32 per month.
Additionally, the report highlights a stark trend in the North American developer landscape, wherein a remarkable 76.1 percent of developers derive over 80 percent of their revenue from applications on the iOS platform.
Struggles of Developers in Monetization
The challenge of monetizing apps has prompted some developers to push users toward subscribing for premium features, or even access to the app at all. This strategy can frustrate users who may not be inclined to pay for features they previously accessed without charge.
RevenueCat’s analysis indicates a critical window for enticing users into mobile app subscriptions. Notably, “82 percent of trial subscriptions are initiated on the same day the app is installed,” reflecting an uptick from the previous year.
Graphs provided in the report illustrate the tendency for trial users to cancel their subscriptions shortly after activation, with many doing so within a week or a month.
“Increased pricing does not appear to be a significant factor behind subscription cancelations, implying that either pricing adjustments are infrequent or they do not have a notable effect on user retention,” the report indicates.
Moreover, app developers face substantial challenges with subscription renewals. RevenueCat’s statistics reveal that with monthly plans, fewer than 10 percent of subscribers continue after the first year, and with weekly plans, less than 5 percent maintain their subscriptions after six months.
Given this backdrop, developers are likely to pursue various strategies to maintain revenue streams. In the coming year, the monetization landscape for mobile applications is expected to witness an increase in “paywalls, upsells, and possibly price increases,” as noted by Rik Haandrikman, Vice President of Growth at RevenueCat, who shared insights via email with Ars Technica.
Haandrikman anticipates a shift toward AI-driven applications employing usage-based pricing models such as credits or pay-per-feature options, rather than relying solely on traditional subscriptions.
“Overall, users should expect to see a broader range of purchasing options as developers test various subscription models alongside one-time purchases for specific content or features,” Haandrikman elaborated.
Source
arstechnica.com