This Week in Apps - All About the Money!
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.
In This Edition
- Twitter's big revenue expansion in February
- Snapchat+ is... working
- The streaming race isn't over
- CapCut is about to hurt an entire industry
- People want Temu
1. Twitter's Mobile Revenue Hit a New Milestone in February
February is behind us, which means it's time to check in on my favorite social network's mobile revenue.
I've been watching Twitter's mobile revenue ever since it started offering in-app purchases, and love seeing it rise.
February made me extra happy because Twitter hit a new milestone.
I skipped January's report so let's start there.
According to our estimates, Twitter's monthly net revenue from the App Store dropped in January to $1.6M. That's a 3% drop from December's total of $1.75M. And that's net, meaning what Twitter gets to keep after Apple's fees.
I'm not too surprised by this drop. There's so much controversy around Twitter and blue checkmarks have become somewhat of a political statement at this point. It's terrible, but some think it is.
But to put that in context, comparing Twitter's revenue before Blue for all and after, it's obvious it was a good move.
Another thing to remember is that Blue is expanding internationally, and opened up in Japan in January. It was a fairly small first month so it couldn't really help this total.
But then things changed in February.
Our estimates show Twitter's App Store net revenue rising above $2M for the first time ever. A "quieter" month in terms of controversy and the promise of monetizing tweets led to more Blue subscriptions. Blue's expansion to more countries, including Brazil, India, and Indonesia, didn't hurt either.
It also didn't help much... The three, combined, earned under $100K of net revenue from the App Store in February.
I expect more growth in March because less controversy = more revenue, and so far things are fairly "quiet".
P.S. - I still miss Tweetbot and still tap its icon, which I refuse to delete or move away from my home screen, at least twice a day.
2. Does Anyone Still Pay for Snapchat's Premium Subscription?
Another fairly recent subscription I've been keeping an eye on is Snapchat+, which I called a paid beta when it first launched last July.
The launch surprised me, and with nearly $6M in net revenue from the App Store, I was surprised by how much people are willing to spend to beta test an app. Retention wasn't amazing in month two, which aligns with what I thought - people were curious and the subscription cost wasn't high enough to prevent them from trying it out.
But growth since has been pretty healthy that it's safe to say it's working.
Let's look at the numbers.
Snapchat's month two of revenue, which I take as a better starting point to measure growth because it doesn't include the hype, totaled $4.4M from the App Store, according to our revenue estimates. And that's net, meaning what Snap gets to keep after Apple takes its share.
It's been on the rise since.
Snapchat+ earned $5.6M of net revenue from the App Store by the end of 2022, a 27% increase from August. Since December, net revenue rose another 21%, ending February with $6.8M, according to our estimates.
I expect revenue to continue at this rate for much of 2023, making Snapchat+ a decent revenue stream for Snap. It won't compete with its ad revenue, which rose to $4.6B in 2022, but still has a lot of room for growth. Especially if it can become more useful.
Snapchat+ and Twitter Blue are very similar in that they go after a user base that isn't used to paying, don't offer too much that's exciting, but are growing at a healthy pace. The only missing ingredient here is better features and that growth can 10x overnight. They have the users.
3. Peacock & Paramount+ Doubled Monthly Revenue in the Last 12 Months
Did you think the streaming race is over? That HBO Max and Disney+ won while the others flail?
You'd think that if you haven't been reading for a while because that's what it looked like last year.
But that's not the case anymore.
Yes, HBO Max continues to lead the race with Disney+ somewhat behind it, but Peacock and Paramount+ are making a serious run for it.
The pair grew its subscription revenue from the App Store by nearly double in the last 12 months, and the trend is very positive.
According to our estimates, Peacock and Paramount+ started 2022 with $6M and $7M of net revenue in January, respectively. HBO Max and Disney+ started 2022 with about 10x that, each.
Not even close!
But exclusive shows and moves combined with sports elevated both in 2022.
In February, Peacock's App Store net revenue, meaning what NBC gets to keep after paying Apple its fees, grew to $18M. A 2x increase in a little over a year. Paramount's App Store net revenue rose to $17M on February, an increase of 143% from January of 2022.
While still far, these get much closer to the bigs, who also grew, but not by that much. HBO Max grew to $56M and Disney+ to $66M, in February, according to our estimates.
Peacock and Paramount have both been hard at work on exclusives, which is how they both grew so much. It reminds me a lot of how HBO Max and Disney+ were back in 2021. I haven't seen that much new from both in 2022 or in 2023 so I expect Peacock and Paramount+ to continue to catch up this year.
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4. Five Months In, CapCut Is a Bigger Threat to Video Editors Than Expected!
I've been following the rise of CapCut, TikTok's video editing app, for quite a while now.
CapCut launched as a free app back in 202 and quickly became a threat to an industry that was generating millions.
A few months ago, CapCut introduced a new Pro subscription that adds more editing features + the ability to store more creations on its cloud.
CapCut's revenue crossed a big milestone in February, just five months into its paid subscription.
Let's have a look at the numbers.
In February, CapCut's net revenue from the App Store rose above $1M for the first time ever, growing 25% month-over-month.
Looking at the competition, CapCut isn't in the lead yet. Splice, the leader, generated over $4M of net revenue from the App Store in February.
But the range between the two isn't as wide as it seems. GoPro Quick, VideoLeap, and Prequel, popular video editors that rank below Splice and above CapCut, made under $2M of net revenue in February, according to our App Intelligence.
Given CapCut's downloads far outpace all of those competitors, it's only a matter of time until it'll outpace their revenue. And once it does there's no going back.
Unless TikTok gets banned in the US and then everything will change. But that's a big if...
5. What Does Temu's Latest Milestone Mean for App Makers?
Temu has been on the App Store since September of last year, but unlike many most other apps that come and go, Temu didn't.
For the last six months, Temu has been the #1 most downloaded app in the US App Store. Temu was dethroned a few times for short periods, but overall it's been the top result every day since launch.
How many downloads is that?
Well, this week Temu hit a new milestone!
As of this Wednesday, we estimate that Temu's App Store downloads crossed 20,000,000.
20 million iOS devices have the Temu app. That's a lot of downloads for a brand-new app that competes with big names such as Amazon and SHEIN. Temu's downloads outpaced both. Combined.
Is there really that much demand for another shopping app? Maybe, but unlikely. Like most other shopping apps, I believe these downloads are the result of several massive ad campaigns.
According to our Apple Search Ad Intelligence, Temu's campaigns span more than 3,000 keywords. That's quite a few, and that's just on Apple's ad network...
Obviously, Temu really wants to be on as many phones as possible at all costs, and has the funding to do it. Not something most apps have, making it somewhat of an unfair competitor.
But what Temu gets by paying you can get for free.
I inspected some of the keywords Temu pays for and noticed two interesting trends:
- Many of the keywords are really generic and unlikely to drive any downloads. Keywords like
urban decayare irrelevant money burners and probably the result of a broad match campaign (which you should always avoid).
- Temu doesn't rank well organically for the more important keywords, leaving the door open for competitors.
Temu is an extreme example of a big spender in a market that doesn't include too many small apps, but that shouldn't discourage anyone from competing with big spenders -- The key is to do what they don't.
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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.