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.
$10/month is a good price point, balancing willingness to pay with retention.
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.
Offer a 1 month subscription, with a discounted annual plan.
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:
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%.
Offer a 1 week trial.
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.
Monetize via subscription.
Subscriptions dominate revenue. One off in-app purchases are somewhat effective (25% of revenue) in gaming. But are irrelevant across all other categories.
Focus on iOS.
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.
Health, business, and education apps convert the most users into paying users.
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.
Similar to conversion, health and business lead monetization.
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.
The first $1k MRR is the hardest.
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.
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