2024 Status of Subscription Apps

Revenue Cat released an amazing 120 page report on subscription apps. We read through all of it and summarized the most actionable insights.

Source: Revenue Cat --State of Subscription apps 2024

The State of Subscription Apps is a must read for anyone looking to grow a subscription app or enter the space.

We work with many apps and understand what's important. After going through the 120 page report as a team, we put together this 1-pager with the most actionable insights. If you're growing a subscription app, this is a must-read.

We will cover:

  1. Pricing
  2. Retention
  3. Trials
  4. Monetization
  5. iOS vs. Android
  6. Conversion
  7. Revenue
  8. Growth

Pricing

Our Take:

$10/month is a good price point, balancing willingness to pay with retention.

The Details:

The most common price points are in the table below. In general, $10 is the most common price point. Above $30, it's recommended that you offer a longer term engagement, at least 3 months.

Pricing is a balancing act. On the surface, $5/week sounds more lucrative than $10/month. But as we'll see in the next section, retention is a function of pay periods.

Retention

Our Take:

Offer a 1 month subscription, with a discounted annual plan.

The Details:

The most important variables for retention are: billing cycle, category, and location (of user).

If you want a long term relationship with your customer, offer an annual subscription for a health and wellness product targeted at the Japanese market.

70% of health and wellness subscriptions are annual plans. Productivity and travel are not far behind, each at 54%.

Categories that have excellent retention:

  • Business productivity
  • Shopping
  • Media apps

Country with the lowest churn: Japan

Keeping your subscribers around, is really difficult. Switching from a weekly to a monthly subscription is an easy way to increase retention/renewal by 10%.

Trials

Our Take:

Offer a 1 week trial.

The Details:

50% of apps offer a trial.

90% of these trials are less than 9 days long.

Keep in mind, SKAN conversion windows are short. If you offer a trial, measure engagement with some sort of conversion in the first 24-48 hours. If you trial takes longer than this to convert, you may not be able to attribute trial conversions to your ad campaigns.

Monetization

Our Take:

Monetize via subscription.

The Details:

Subscriptions dominate revenue. One off in-app purchases are somewhat effective (25% of revenue) in gaming. But are irrelevant across all other categories.

iOS vs. Android

Our Take:

Focus on iOS.

The Details:

Revenue Cat didn't offer meaningful insights regarding iOS vs. Android. Though iOS is the more lucrative platform with the Apple App Store bringing in 88% more revenue than the Google Play Store despite fewer downloads.

Conversion to Paying Users

Our Take:

Health, business, and education apps convert the most users into paying users.

The Details:

Execution and category are the largest lever when it comes to converting a free user into a paying one.

Health, business, and education apps have the highest paying users/install ratio with a median of ~6%. For those that execute well, this number more than doubles to 13% for the upper quartile of apps in these categories.

Revenue

Our Take:

Similar to conversion, health and business lead monetization.

The Details:

Once again: Health is the best category.

Within 14 days of a download, health apps see $0.50/customer. A whopping 3x better than the next best category, business.

Gaming is a tough business seeing only $0.05/customer within 14 days of a download.

Growth

Our Take:

The first $1k MRR is the hardest.

The Details:

Focus on getting to $1k MRR.

Only 17% of apps reach this. However, of the apps that reach $1k MRR, 60% will go on to +$5K MRR.

How to Grow Through Paid Ads

Our Take:

Hire Validated.

To apply, book an intro call.

The Details:

Validated is an AI-enabled marketing agency focused on serving digital apps. Our customers have scaled from 0 to +4k new users/day profitably.

We fully take ads off your plate including setting up attribution, creative, and managing you ad account. To do this, we pair expert marketers with custom, world-class AI tooling to run the most efficient ads possible.

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