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The median annual income for apps on the market is less than $50 per year.
That’s according to a new study from mobile subscription service company RevenueCat (RC). His 2024 report on RC anonymizes data and uses it to analyze what works and what doesn’t as entrepreneurs seek to profit from subscription app revenue. Masu.
Since its founding in 2017, RC has used its tools to track nearly 30,000 apps that collectively generate more than $6 billion in revenue. The company’s clients include Reuters, workspace app Notion, and photo editing app PhotoRoom.
Here are some important findings.
what works
RC noted that while the median monthly revenue for subscription apps is low, the level of success varies by category. Health and fitness apps performed nearly twice as well as all other categories combined after one year. The median monthly revenue for the top 5% of health and fitness subscription apps was $4,564.82.
Other categories had lower median revenue, with social/lifestyle apps having the second highest number. The median monthly income for the top 5% of this section was $2,769.31.
It’s difficult for apps to reach $1,000 in monthly revenue, with only 17% of apps achieving this milestone. From that point on, growth seemed to get easier, with 59% of apps that reached $1,000 reaching $2,500 per month, and 60% of those apps reaching $5,000 per month.
Photo and video apps reached the $1,000 monthly revenue milestone faster than any other category. RC attributes this to the growth of his AI imaging app over the last year.
Related: We tried three AI headshot generators and found a clear winner
There is a huge disparity in profits between high-performing and low-performing apps, with the top 5% earning 200 times more than the bottom 25%.
Still, RC cautioned readers that “not all revenue is created equal,” citing examples of apps that bring in the best revenue but break even or lose money when customer acquisition costs are taken into account. .
RC writes in its report, “Just because you have profits doesn’t mean your business will do well. Having profits does mean your business will do well.”
things that don’t go well
Travel apps had the lowest revenue, with the top 5% earning a median of $852.84 per month. However, travel was the best category for converting trial users into weekly or annual subscribers, with a conversion rate of 54.3%. This could mean that the user had stronger intentions behind their decision to try the app.
According to RC, users will pay for a subscription app if they believe the app will solve a real problem they are facing.
Related: Enjoy lifetime access to this travel app’s useful tools at the lowest price online
“It is your job to demonstrate to the user that you understand the problem and have a viable solution to it, ideally in the first session,” the report says. “In other words, he wants to get users to that ‘aha’ moment within 60 seconds of installing the app.”
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