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Report: The number of people who are fine with paying app subscriptions is growing

Published Nov 8th, 2018 12:09AM EST
App economics

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Apple has been making a big deal lately out of the company’s shift toward being increasingly driven by services and subscriptions, and new data from the 2018 Mobile App Engagement Index makes it clear that such a shift is happening at a great time. The key takeaway from the data, which comes from the mobile app marketing firm Liftoff and mobile engagement platform Leanplum, is that while users once might have hesitated about paying for mobile app subscriptions except for some must-haves, that appears to be changing.

According to the index, mobile subscription app engagement globally, as measured by the conversation rates of people installing and eventually paying subscriptions for apps, has grown 32 percent this year compared to 2017.

Intuitively, that makes sense, especially as consumers’ favorite apps like Spotify and Netflix acclimate them to subscriptions as opposed to individual purchases of the things and content they love. Per Business Insider, “The report, which studied 257 billion impressions across 58.4 million installs from September 2017 to August 2018, found that global subscription app engagement jumped to 3.3%, up from 2.5% in 2017.

“The rise in subscription app engagement is a boon for developers, as the subscription app model provides them with more consistent revenue streams. That’s because subscription apps generate revenue from recurring weekly or monthly payments from established consumers, rather than unpredictable, one-off purchases, for example.”

The report goes on to note that iOS users tend to provide the best return on investment in the long run for mobile app developers. Their average engagement rate for subscription apps, according to the data, was 3.4 percent. That’s more than double the engagement rate among Android users.

Inertia is certainly a powerful economic force at work here, since you can imagine it generally takes the average person a while before they’re motivated to cancel a subscription they’ve signed up for. They’re easy to start, and easy to ignore them as they keep recurring, week after week, month after month, in the background. It will be interesting to see how pervasive this eventually becomes, especially as mobile users show an increasing appetite for wanting to pay a little bit in recurring costs and get many benefits as opposed to making a one-off purchase here and there.

Said Liftoff CEO Mark Ellis in a statement: “Acquiring users for this app category isn’t inexpensive by any means, but the year-over-year data showcases major momentum for subscriptions … there’s no question that the long-term benefits of the subscription model, in the form of loyal users and stable cash flow, are worth the investment in service quality and marketing spend.”

Andy Meek Trending News Editor

Andy Meek is a reporter based in Memphis who has covered media, entertainment, and culture for over 20 years. His work has appeared in outlets including The Guardian, Forbes, and The Financial Times, and he’s written for BGR since 2015. Andy's coverage includes technology and entertainment, and he has a particular interest in all things streaming.

Over the years, he’s interviewed legendary figures in entertainment and tech that range from Stan Lee to John McAfee, Peter Thiel, and Reed Hastings.