Investors know that most startups fail, but something that may be less understood is how few mobile apps actually make money.
Sarah Perez / TechCrunch:
— According to a new analysis of the subscription app economy from mobile subscription toolkit provider RevenueCat, the top 5% of apps generate 200 times the revenue of the bottom quartile after their first year, while the median monthly revenue an app generates after 12 months is less than $50 USD.
The “State of Subscription Apps” report offers a bird’s-eye view into the subscription app universe, as RevenueCat has nearly 30,000 apps using its platform’s tools to manage their monetization. Outside of Apple and Google, that makes RevenueCat the largest collection of subscription app developers on one platform.
This report specifically looks at data from over 29,000 apps and over 18,000 developers who collectively generate over $6.7 billion in tracked revenue and have over 290 million subscribers.
After crunching its data, the company found that only 17.2% of apps will reach even $1,000 in monthly revenue, but after they hit that point, the odds of them growing further increase. For instance, 59% of the apps that reach $1,000 will go on to reach $2,500 and 60% of the apps that reach $2,500 will make it to $5,000. But what may be more surprising is that only 3.5% of apps will reach $10,000 in revenue — the figure that an indie developer may need to hit in order to devote themselves full-time to app development or their mobile-first startup.
There are some differences in apps’ success when you narrow things to the category level, however.
Health and fitness apps generate more revenue after a year, performing at least twice as well as all the other categories combined, both at the bottom quartile and in the top 5%. Travel and productivity apps struggle the most, with even the top 5% of apps in the category making less than $1,000 per month after a year’s time on the app stores.
While it’s perhaps not as surprising that many apps don’t make money, given how many are launched as side projects, seeing the actual monetization figures could be a shock to those who think they have what it takes to beat the odds.
— Techmeme