The in-app subscription market continues to grow, according to a new report, despite increasing consumer fatigue with the trend to turn everything into a recurring payment. Surprisingly, the most common subscription model is reportedly now a weekly one.
The switch from buying apps outright to paying for them on a subscription basis has been one of the biggest trends over the past 5-10 years – and one of the most controversial …
A company which supports developers with in-app subscriptions says the number of apps adopting this model has grown by 15% year-on-year.
Developers argue that recurring revenue best equips them to keep improving apps, while many consumers object to what typically amounts to a far higher lifetime usage cost. Back in 2017, I outlined four reasons the model can be problematic – including that lifetime spend:
I can’t even remember now what I paid for my three versions of Lightroom, but from memory the last one I bought – Lightroom 3 – cost me about $150 back in 2011. I’m still using it today. If I’d instead been paying $9.99/month, that same app would by now have cost me $720 – and counting.
But subscription fatigue doesn’t seem to be doing anything to reverse the trend, according to Adapty.
The in-app subscription market continues its robust growth in 2024, with global revenue projected to exceed $120 billiona significant increase from last year. Despite challenges such as inflation and harsh data regulations, the sector is thriving, with a 15% year-over-year growth in the subscriber base.
While monthly and annual subscriptions were once the norm, the company says that the most common subscription period now is weekly, responsible for some 55% of the total.
Adapty believes there are three reasons for this switch. First, developers are using it as an alternative to a free trial, where consumers can trial an app for seven days at low cost, while still generating some revenue.
Second, consumers themselves may be more willing to commit to this lower spend for a shorter period, helping overcome resistance to subscription apps.
Finally, showing the cost on a weekly basis makes the app look cheaper than quoting monthly costs.
However, the long-term benefit to developers is more questionable. The average weekly subscription is renewed eight times, for a total of two months, while monthly subscriptions are renewed four times on average, for a total of four months.
But Adapty says that mileage can vary considerably between apps, and that experimentation with different models is the most effective way to maximize revenue. Indeed, it says, the more subscription models a developer tests, the more likely they are to hit on the best one for their app.
Developers who conduct the most A/B tests on subscription models can make as much as a hundred times more than those who launch with a single model and stick to it.
What’s your view on subscription apps? A good way to support developers, or an ever-increasing financial burden? Please share your thoughts in the comments.
Photo by Alexander Grey on Unsplash
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