Subscription Billing Blog

Subscription-based app revenue skyrockets in 2016, indicating promise

 

Arguably the most famous mobile app service, Apple’s App Store saw record high revenue this past year. According to a company press release, developers earned a collective $20 billion in 2016, an increase of more than 40 percent over 2015’s revenues. According to The Motley Fool, payouts have been on the rise since the Store’s launch and have leaped drastically – from $15 billion in 2013 to $25 billion in 2014 and so on – over the past few years. On Jan. 1, 2017 alone, the App Store generated almost $240 million in sales, marking the company’s highest day ever.

Sales of subscription apps were even more remarkable, leaping 74 percent above 2015’s numbers to hit $2.7 billion. Part of this increase is quite possibly due to the fact that Apple expanded subscription billing capabilities to all of its app categories that fall.

“Americans have an average of 37 apps on  their smartphones.”

Such news is promising to mobile tech developers and executives hoping to monetize their next venture. As Apple’s data shows, subscription apps continue to be a lucrative business. After all, people are more connected to their mobile devices than ever before. According to venture capital firm Kleiner Perkins Caufield & Byers, Americans have an average of 37 apps on their smartphones, and they spend an average of five hours each day on these devices.

Taking advantage of subscription apps in 2017

If 2017 turns out like the years before it, more consumers will download subscription apps. Many of these downloads will likely come from businesses and professionals as more industries adopt mobile technology into their practices. Healthcare providers, for example, use mobile devices to conveniently access electronic health records. In fact, according to the most recent statistics from the Healthcare Information and Management Systems Society, over half of hospitals use at least three mobile technologies to improve efficiency and provide higher quality care.

Developers should take advantage of this growing market and capitalize on mobile advertising to ensure their applications stand out from the crowd. Mobile advertising reduces the length of the conversion funnel dramatically, as tapping the ad often takes users directly to their mobile app store. From there, it usually only takes a single click or thumbprint, and the application is on the customer’s device.

Mobile advertising makes it easier for customers to convert.Mobile advertising makes it easier for customers to convert.

Mobile advertising has come a long way since the dawn of smartphones, and tools like Facebook and Google offer optimized marketing capabilities so businesses can better target their audiences. For instance, Russian game developer Pixonic used video adds on Facebook and its other services, including Instagram, to engage potential customers with stunning gameplay and compelling calls to action. This campaign resulted in twice the number of app installs.

Using similar marketing tactics will help mobile developers take advantage of the expanding subscription app market in 2017 and beyond. What’s more, as indicated previously, mobile marketing helps reduce barriers to payment. Developers should continue to focus in this area by partnering with a subscription billing service that enables simple, reliable transactions.

About Author

Robert Garcia

Robert Garcia

As Partner Programs Manager at Vindicia, Robert Garcia has extensive experience in strategic partnerships and business development. He is responsible for sourcing and negotiating new Vindicia partnerships for platform improvement and payments expansion. Previously, Robert served in similar roles at IBM and Coremetrics. He holds a B.S. Degree in Economics from Santa Clara University.

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