Paid Apps are Dead

Ariel Ariel

This is a single insight from This Week in Apps #80 - No Way Down. Check out the full article for more insights.

We tweeted a stat earlier in the week that surprised many people, and that's that the share of paid apps, those you have to pay for before downloading, has reached very low single digits.

I was also a tiny bit surprised at how low it is, but not that surprised. Why? Because I've been talking about friction in the app world for 10+ years at this point.

First, numbers. Of the 1,878,916 iOS apps available in the App Store right now, only 111,827. That's just 5.95%. I usually round numbers off because they're easier to read and don't make a big difference overall. But the number is so tiny here that I couldn't do that.

Google Play is pretty much the same. Of the 4,077,118 apps and games you can download right now, only 149,886 are paid. That's just 3.68%.

This is the lowest the share has ever been, and all things considered, is probably going to shrink even more in the future as the companies who still publish them realize they're leaving money on the table.

So, what's the alternative? In-app purchases and subscriptions. Well, kind of.

More numbers!

There are 233,857 free apps with in-app purchases or subscriptions on the App Store and 269,039 on Google Play. That translates to 13.23% and 6.85%, respectively.

I expected to see more, but there are a few things to consider.

  1. Many apps monetize with ads. It doesn't mean they're actually making more money than they could if they used in-app purchases or subscriptions, but that's a whole other thing.
  2. On Google Play, some apps can monetize outside of the store without having to sue, and many apps that can, do it.
  3. Some apps are clients that charge elsewhere. The Appfigures app is one such example.
  4. And lastly, some apps monetize their data... Meaning their users. Those are much harder to catch in the wild, but they certainly exist. Apple is trying to make that impossible with ATT and stricter permissions around location tracking, which is imperative to selling usage, but they still continue.

So, what? "Simple" no longer cuts it when it comes to making money with apps. It did for many years, but those are behind us, and that's actually a good thing. If you're still holding on to a pay upfront model, it's time to stop doing that. It'll help you be more competitive and more profitable. I've yet to speak with one developer who regretted switching.

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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.

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