Headspace & Calm Forgo Downloads for Revenue in 2022
This is a single insight from This Week in Apps - 2023 Will Be Big. Check out the full article for more insights.
Meditation apps are a very interesting area to analyze. Before the pandemic, Calm, the most popular meditation app, saw downloads growing at a very healthy rate. Headspace, the runner-up, had the exact opposite trend with demand shrinking year over year.
Two similar apps, two very different demand patterns.
But then the pandemic hit and things got... weird.
You'd expect demand for meditation apps to rise during extra-stressful times. That happened for Calm, but only for a short amount of time. It didn't really happen for Headspace.
Since 2020, downloads have been on the decline for both. By 2021, Calm's downloads had dropped roughly 20% and Headspace 10%. In 2022, downloads dropped by 40%.
But where downloads seem to signal the end, revenue tells a much different story.
The gist - Calm and Headspace earned the most in 2022!
Even though demand declined, revenue per download increased as more people were ready to (finally) pay for destressing. That's what changed during the pandemic.
Looking at the data, Calm was ready for this shift. Its net revenue, according to our estimates, has been on the rise. It grew 14% in 2021, giving Calm nearly $80M of net revenue for the year. Headspace's revenue also grew by double digits -- 13% for a total of $53M. And that net, meaning after Apple and Google take their fees.
Looking at the trend, we can call 2021 a practice run for growth, because in 2022 the numbers were even higher.
Calm grew 57% and Headspace 59%. Wow!
If you're a developer who believes the only way to increase revenue is by getting more downloads you're only partially correct. Conversion rate, price, and retention rate (or churn), are the three most important metrics for you to optimize.
Are you optimizing them?
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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.
