Mobile app developers are bracing for a shift towards subscription-based models, spurred by underwhelming revenue figures from over 30,000 apps. According to RevenueCat, a company specializing in subscription toolkit development for mobile apps, most apps struggle to breach the $1,000 monthly revenue mark.

Subscription Toolkit Development by RevenueCat

ArsTechnica reports that RevenueCat boasts prominent clients like Reuters, Buffer, Goodnotes, PhotoRoom, and Notion, with 90% of in-app subscription platforms utilizing its services. This widespread adoption hints at the benefits reaped by developers through subscription monetization.

Challenges in Revenue Generation

Only a mere 17% of surveyed apps manage to rake in at least $1,000 monthly, with an even lower percentage achieving higher revenue brackets. RevenueCat’s analysis reveals that once an app surpasses the $1,000/month milestone, it’s more likely to scale further, hitting $2,500/month or even $5,000/month.

Income Disparity and Persistence

The data underscores a glaring disparity in revenue distribution among subscription-based mobile apps. A year post-launch, the top 5% of apps generate a staggering 200 times more revenue than the bottom quartile, while the average monthly revenue for new apps hovers around $50.

Subscription Fatigue and Renewal Challenges

One of the primary hurdles in sustaining subscription-based revenue lies in combating subscription fatigue among users. Despite an average first renewal rate of over 60%, the retention rate dwindles to a mere 36% by the third renewal, as per RevenueCat’s findings. This drop has repercussions across the spectrum of app performance.

Rising Subscription Costs and Diversification

Anticipating a rise in subscription prices, developers are exploring alternative revenue streams like in-app purchases and affiliate marketing. Over the past year, the average monthly subscription rate has spiked by 14%, reaching $8.01. This uptick is attributed to factors such as escalating customer acquisition costs and the pursuit of a premium app image.

Looking Ahead

While the subscription model remains a cornerstone for app monetization, developers are urged to diversify revenue streams to mitigate risks associated with fluctuating subscription trends. As the industry grapples with evolving user preferences and economic challenges, adaptability and innovation will be key to navigating the ever-changing landscape of mobile app monetization.