This Week in Apps #126 - Unity's Dilemma...
This Week in Apps is a short, no-fluff, round-up of interesting things that happened in the mobile industry. Here are our top highlights.
U.S. Revenue Index (This Year)
1. Why is Clubhouse is Splitting Up?
Clubhouse, the OG audio-only social network that exploded in 2021 and started a new (but short-lived) trend, has announced it'll be changing its platform to focus on groups instead of being a single place for everyone.
Paul Davidson, Clubhouse's CEO, tweeted that the evolution of the platform is to be a bunch of small houses, or groups, which will fit the listeners more.
What I'm hearing here is that Clubhouse had lost its relevance and needs to reinvent itself in order to justify the massive investment that it took when it was at its peak.
And the data backs it up quite nicely.
According to our estimates, Clubhouse has been losing momentum consistently this year. It started 2022 with around 180 thousand weekly downloads and ended last week with 79 thousand downloads. Less than half.
Even that January total is a far cry from May of 2021, when Clubhouse added 2.7 million new users in a single week. Its all-time best. Instead, it added just 3.4 million new downloads in all of 2022.
Definitely lost its relevance, if it ever had any.
Rant aside, I do see some potential merit in this move!
If we learned anything by looking at the rise of TikTok, it's that compensating creators is a big component of a platform's success these days. YouTube does it well and that's why it's so successful. Same for TikTok.
Even though every other platform already added audio rooms, and Twitter basically ate Clubhouse's lunch, there's still some potential for Clubhouse to enable monetization for creators at a scale Twitter hasn't reached yet (in terms of monetization, not total audience).
But to do that it needs to make it very easy for people who come into the platform to find stuff they're interested in. Splitting up the monolith is a must for that to happen.
Maybe if it spent as much time thinking about its business model as it did about its icon things would be different...
2. Twitter's In-App Revenue Rebounded in July, But Ever So Slightly...
Twitter's new hellish "normal" continued in July as Elon pulled out of the deal he fought so hard to get and Twitter's board decided to sue him for that. What a rollercoaster. But, let's ignore that for now and talk about what really matters for the platform – in-app revenue.
I pulled up Twitter's monthly in-app revenue for July and was happy to see it didn't go down as I expected.
Our estimates show that Twitter earned $462K of net revenue from its iOS and Android app in July. That's only a tad bit higher than June's total, which was $439K of net revenue. And this is net, meaning after Apple and Google take their fees.
That's small, but it's, at least, a bit bigger than the difference between May and June, which was just about $5K. It's that tiny increase in June that made me think the tide is turning and that growth has ended for Twitter.
I'm glad to see it didn't, and still believe there's much more potential to this than Twitter is currently enabling. It's a shame their stock price is governed more by one-off tweets than it is by their ability to grow.
But in Twitter's defense, revenue has nearly doubled since the beginning of the year, which started at $244K of net revenue. So that's something.
3. The Same but Bigger – Ranking The Highest Earning Apps in July
This week, I ranked the highest earning apps in the US, where much of the money is, this list is almost an exact copy of June's. And I'm not at all surprised.
Tinder was the highest earning app in the US in July, raking in $48 million in net revenue, according to our estimates. It reclaimed the top spot from master streamer HBO Max, which came in second in July with $47 million in net revenue from its iOS and Android apps.
HBO Max also updated its logo recently, making it darker and slightly less friendly. Maybe it's a sign of things to come, now that movie theaters are trying to find their place in our society again.
YouTube, TikTok, and Bumble complete the top 5 in our list for July. All of those, except for TikTok, earned more in July than they did in June.
TikTok's revenue has been sloping down for all of 2022. It's still massive, but it's interesting to see how the growth in demand isn't generating more revenue but rather less.
If you're interested in my thoughts on TikTok's revenue vs. downloads and prediction for the future, check out this episode on YouTube, where I'll get into it a bit more. It's not live yet but will be soon.
The remaining 5 match June's list perfectly, starting with Disney+ at #6 all the way down to LinkedIn in #10.
Disney's revenue stagnation is one of the factors that led to the price increase it announced recently, which covers Disney+, Hulu, and ESPN. All three will see a price increase later this year, but it's ESPN that will be hit the hardest as it's currently the lowest. This change is both a good and bad sign at the same time. Also, another reminder that the streaming war is close to over.
Net revenue for the top 10 combined inched a bit in July to $307 million, up from $299 million in June. Nothing to write home about, but at least it didn't go down. I expect to see it rise again in September as kids return to school and "normal" work resumes.
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4. TikTok Reclaims the Lead! The Most Downloaded Apps in the World in July
Time for our monthly ranking of the most downloaded apps in the world for July. The gist for July is that one app disappeared from the list, another was added, and most apps on the list got more downloads than in June.
Also, TikTok flexed its muscle!
TikTok reclaimed its top spot in July as the most downloaded app in the world. It added 61 million new users to its platform across the App Store and Google, according to our estimates.
Instagram, which almost made a big mistake a few weeks ago but decided not to follow through with it, came in a close second. Considering TikTok is still banned in India, Instagram's biggest area of growth, I see this as a massive win for TikTok.
Shorter has become better over the last few years, and TikTok is the champion of that. I expect to see it in the lead next month as well.
Facebook, WhatsApp, and Snapchat complete the top five, matching June's list perfectly. The bottom 5 align almost perfectly as well, but for one exception – Google sheets.
In July, Google Sheets saw enough downloads to rank 8th on our most downloaded list with 22 million estimated downloads. As more professionals travel during the summer, demand for mobile productivity tools grows as well. Google Sheets took SHEIN's place. With a little under 19 million estimated downloads, SHEIN couldn't beat last place WhatsApp Business.
Together, the top 10 most downloaded apps in the world found their way into 358 million devices in July, according to our estimates. That's a small increase from June's total, which isn't all that significant, but also wasn't a decrease.
5. What to Make of Unity's Love Triangle + The Numbers That Matter
A few weeks ago, Unity and ad network ironSource announced they're merging. I looked at the number of apps and games using both technologies and concluded ironSource would gain much more than Unity in a merger and questioned the merit of it.
Well, this week, ironSource's chief rival AppLovin announced they want to buy Unity instead, at a price tag of $20 billion.
The thing is, Unity's market cap as of right now is right under $17 billion.
Things are finally starting to make sense!
Unity is much more valuable than what it's trading now, in my opinion at least, and don't take this as investment advice because it isn't. A merger means it isn't, but a purchaser who's willing to pay more is.
Does it make sense for AppLovin to buy Unity?
From a purely competitive standpoint, one that isn't even looking at numbers, the answer is absolutely!. If Unity merges with ironSource, as I showed a few weeks ago, they'd have a huge ad network that will be able to offer advertisers endless opportunities. That would make AppLovin far less interesting.
But just how big is AppLovin?
Again, I'm using our SDK Intelligence, in which we scan free apps and games and extract all the technologies they use.
For starters, according to our data, AppLovin is used by nearly twice as many apps that are currently available for downloads in the App Store and Google Play.
With roughly 114 thousand apps and games in its network, AppLovin is one of the strongest ad networks around right now. And unlike Unity and ironSource, AppLovin is used in many apps and not just games, making it a much more diverse opportunity for advertisers.
To answer the question, AppLovin is pretty big!
And that's also, in my opinion, why it's trying to acquire Unity.
ironSource is a weaker competitor on its own, but with Unity under its wing, ironSource will easily overtake AppLovin. I ran the numbers, and f the two do merge, the UnitySource network would include more than a quarter of a million apps and games.
AppLovin can't have that, and if I'm Unity, I may be rethinking my strategy right now.
What would you do?
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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.