This Week in Apps - Subscription Economics
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 (vs 30 days ago)
Insights
1. Subscription App Revenue Is at an All-Time High
I recently gave a keynote at the App Promotion Summit about the state of mobile apps. My overall theme was to highlight that it's getting harder to get downloads but every download is worth more than ever before.
But of my 29 slides, one got the biggest reaction and led to the most "hey, I didn't expect that at all" comments after my talk.
Using Appfigures Intelligence, I looked at all the revenue across the App Store and Google Play in August and divided it into revenue earned by apps utilizing subscriptions vs apps that are paid or have non-recurring in-app purchases.
According to our estimates, 45.4% of all revenue earned came from subscription apps. Even if I didn't have any more data to share, this would be quite amazing. Considering most games haven't cracked subscriptions just yet, this is a very big deal.
And the share is rising. Compared to May, August's number is 1.4% higher, which means the scale will tip towards subscriptions before the end of the year.
Right now, of the top five top-grossing apps and games in the US App Store, only two utilize subscriptions, and three use in-app purchases. Yet subscription apps generate nearly half of all revenue. The top 5 are just a tiny glimpse, but an important one.
But let me add to your shock - can you guess how many apps, of all apps and games available in the App Store and Google Play right now, even use subscriptions?
You might guess "somewhere around half" to align with the revenue, but if that's your guess you'd be veeeeeery off. Very very off.
According to Explorer, 3.9% of all apps and games use subscriptions. Not even 5% of (mostly) apps and (very few) games generate almost half of all revenue. That's significant.
If you've got an app in the store that's using subscriptions you should spend as much time as you can getting more downloads and optimizing the free to paid conversion. And if you're not using subscriptions yet - what are you waiting for???
2. The Rankings Unchanged, But Revenue Soars - The Highest Earning Apps in the World in September
The data has been analyzed, and the top earners across the iOS App Store and Google Play for September 2024 are ready to be revealed, courtesy of our App Intelligence. We've also been tracking the top 10's ascent to $1 billion, and they're practically close enough to touch it. Let's dive into what the data can tell us.
According to our estimates, TikTok generated over $250M of net revenue last month, adding $12M to its July total of $240M, a 5% month-over-month increase. YouTube held strong at #2, growing to $166M in September—$9M more than August—thanks to its evolving subscription strategy. And that's all net, which means what the publishers get to keep after store fees.
Disney+, Tinder, and Max maintained their spots from August, but their growth lagged. Our estimates show Disney+ netted $125M (up $1M), Tinder earned $95M (down $2M), and Max's income dipped by $4M to $40M. Again, all net.
Peacock, however, climbed to #6, reaching $48M, up from $44M. This is the highest rank Peacock has ever achieved since we started ranking apps!
The top 10 are closer than ever to crossing the $1 billion threshold with $945M in net earnings in September—a bunch more than in August. A year-end milestone is on the horizon.
3. The Dip Continues - The Most Downloaded Apps in the World in September
Looking at last month's estimates for new app installs, we see a contrasting trend from app revenue continue. Let's go over the top apps using our App Intelligence and explain what we mean.
Instagram ranked #1 globally for first-time downloads, but its 54M total was 10M fewer than in July, which had shown some month-over-month growth.
TikTok, again at #2, also saw a decline, with 45M downloads—down 4M from the previous month. Facebook and WhatsApp maintained their #3 and #4 spots with 39M and 35 downloads, respectively, both down from August's totals of 43M (-9%) and 42M (-17%).
Notably, #5 changed hands, with Meta's Threads moving up to the spot, becoming the #1 free app on iOS and gaining traction on Google Play.
In an encouraging turn, ChatGPT broke into the top 10 at #10 in August and climbed to #8 in September, experiencing month-over-month growth from 19M to 24M downloads — a 5M increase.
Overall, September marked another month of declining new app downloads, with total non-game installs estimated at 334M, down about a 5% from August.
While it's not the growth month we hoped for, the launch of iOS 18, iPhone 16, and Google's compelling hardware may turn the tide soon.
4. ChatGPT Crossed a Revenue Milestone and (Re)Started a Gold Rush
ChatGPT is one of the fastest-growing apps on the App Store (and even Google Play). It should come as no surprise that September was ChatGPT's biggest month of revenue and so was the entire quarter - and we'll get to those numbers in a bit - but it's also restarting last year's gold rush and will likely mint a few more app millionaires.
Can you guess what I'm talking about?
Let's start with the numbers to get an idea for ChatGPT's scale.
According to Appfigures Intelligence, ChatGPT earned a whopping $37M of net revenue - what Sam gets to keep after store fees - from the App Store and Google Play in September. That's roughly 19% of month-over-month growth. Not ChatGPT's highest, but at these numbers, very impressive.
This growth, which is mainly coming from the US App Store, made ChatGPT rank 27th on the US App Store top-grossing chart right now.
Adding all revenue up, ChatGPT has crossed a big revenue milestone in September. Our estimates show that in September, ChatGPT's total net revenue since release crossed $250M. And by crossed, I mean really crossed.
We estimate that quarter-over-quarter cumulative net revenue rose from $177M in Q2 to $315M in Q3. We're talking about a 78% increase in a single quarter. Just wow.
ChatGPT's Gold Rush v2
Last week, OpenAI presented its Realtime API, which means developers can build apps with OpenAI's Advanced Voice Mode. Well, like Advanced Voice Mode, but still very magical.
And I foresee many developers jumping on the opportunity with thin wrappers around this new API, just like the surge we saw last year.
Things are very different now and the Realtime API is really expensive, but I doubt that'll stop most from at least trying. And while the opportunity for thin wrappers is likely a short one, the opportunity for more focused apps that can benefit from voice is much larger and will have much more longevity. I'm sure that's what OPenAI is betting on.
So, if you're planning to jump on this bandwagon my suggestion for you is to find a real need for voice and build for it.
Grow Smarter, with Data.
Keep a close watch on your competitions to stay a step ahead
5. X's Revenue Growth Hit a New Peak
September is behind us which means it's time to take a look at Twitter's, I mean X's, revenue. And with this I'm going to retire that joke and forget about Twitter...
X's revenue has ebbed and flowed a bunch this year, almost exclusively for reasons not related to its mobile strategy, but when we zoom out a bit, the last quarter shows a definitive trend in revenue growth.
According to our App Intelligence, X's net revenue rose to $30M in Q3 of 2024. Not only is this the highest quarterly revenue has ever been, but it's also a whopping 30% higher than Q2. And when looking at the trend, things didn't look nearly as good, with revenue not really growing between Q1 and Q2, making Q3 great for business.
Now, every time I write about X's revenue I get comments about how this revenue pales in comparison to the revenue the platform lost when many advertisers left, and those comments are right. This isn't a comment on X's revenue in general, but on its ability to turn its users into paying user, something social platforms didn't really do before X took the plunge.
Although X (then, Twitter) was somewhat of a pioneer, almost every other platform that followed in its footsteps is earning more from its users. Snapchat, one of the best examples, ended Q3 with more than $100M in net revenue, according to our estimates. Which to me means there's a lot more opportunity for X.
As we get closer to election time here in the US I expect to see demand for X growing and so will its revenue. It's what comes after I'm not entirely sure about.
App Intelligence for Everyone!
The insights in this report come right out of our App Intelligence platform, which offers access to download and revenue estimates, installed SDKs, and more! Learn more about the tools or schedule a demo with our team to get started.
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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.
