Subscription Apps and Their Evolution

Once you have created an app or platform, you realize how much work goes into it. Building an app is not something that can be done quickly because it needs proper brainstorming, creativity, content, technical frameworks and a lot more. It is absolutely justified for you to monetize the app that you have decided to release. It is also important that you release new content each month and impose a subscription requirement so that your audience and subscribers can grow.

After all, you put a lot of effort into developing the app, and you now need a steady stream of income to support the value you offer consumers. But the question remains: How do you do it all – generating revenue for the app and obtaining paid subscriptions.

Let’s explore what some of the top subscription apps are in more detail, how they have changed over time, and the sectors they are expanding to, such as music, productivity, lifestyle, education, gaming, etc. We’ll also learn about the top subscription apps that are currently dominating the market.

What are subscription apps?

Subscription applications are programs that give users access to certain services, premium features, or content in exchange for a regular fee that you pay each month, quarter, or year. Apps that are designed on a service-based or content-based monetization model have a greater chance of succeeding. In light of this, why should someone pay to utilize the apps? The answer is – quality.

Nearly 3.55 million apps are available at present, and this number is rising. In an industry with millions of apps available on the Apple Store and Google Play, the quality of your app is what distinguishes you from the competition.

When the responsibilities are clearly defined by the audience’s demand and, based on that, you have created an app that satisfies those demands, applications can become a huge success. It is because people only pay for apps that they actually want. According to market trends, many service providers enter new markets and genres.

Some of these endeavors are quite successful, but some can fail spectacularly. Therefore, the content you provide and the timing and technique you implement are most important. Companies that strike the perfect balance with their customers can generate billions of dollars in revenue.

Statistics on subscription apps and why it is dominating the market?

Since many subscription apps fared well during the Covid-19 pandemic, subscription revenues had started to rule the app market. However, the pandemic constraints are almost over, and more crucially, we are staring at new macroeconomics.

By 2026, the app economy is anticipated to reach $614 billion. An increasing user base that engages with the apps for an increased amount of time is an average of 4.2 hours per day which is a positive growth factor.

In 2021, the top 100 subscription apps worldwide generated $18.3 billion in revenue. On the App Store and Google Play, respectively, US users spent $6 billion and $2.5 billion in 2021, increasing by 33% and 78%.

Given that consumer spending on the App Store has typically surpassed that of the Play Store, it should come as no surprise that a significant portion of this subscription money was generated by it. Compared to $2.7 billion on Google Play, which increased by 42% from $1.9 billion in 2019, the top 100 subscription applications worldwide made $10.3 billion on the App Store in 2020, a 32% increase over 2019.

Even while the revenue from subscription apps increased by 26% annually in 2020 to reach about $5.9 billion, this was a slower rate of growth than the 34% observed globally. Overall, the top 10 apps on Google Play and Apple were YouTube, Disney+, Tinder, Pandora, Google One, Twitch, Bumble, HBO Max, Hulu, and ESPN. These top earners show that customers are prepared to pay for their entertainment on a subscription basis, such as streaming services, but it is more difficult for other categories to break into the top ranks. However, dating apps continue to be an exception.

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Types of Subscription based models:

App subscription models come in a variety of forms, which can be paid monthly or yearly. The various subscription based models offered to the customers are given below:

  • Subscription that automatically renews: Unless the user cancels it, this sort of subscription automatically renews at the end of the subscription period.
  • Non-renewing subscription: After the subscription period has passed, the user must manually renew this sort of membership because it does not do so automatically.
  • Free trial membership: With this kind of subscription, customers can test out the app for a certain amount of time before deciding whether or not to subscribe.
  • Pay-as-you-go subscription: Rather than committing to a certain amount of time, this kind of subscription lets consumers only pay for the services they actually use.
  • Multi-level subscription: With this sort of subscription, consumers can select the level of access to services or material that most closely matches their needs.
  • Consumable Subscription: This kind of subscription allows users to access a set number of features or services, after which they must renew their subscription or purchase more.

Areas in which subscription apps are becoming highly popular

App trends keep fluctuating so what is trending today may not hold much relevance tomorrow. If you remember, in the recent past, Candy Crush was a global phenomenon. Now, every season a new trend is being introduced. Subscription apps are becoming increasingly popular in a variety of areas, as they offer consumers the convenience of receiving regular deliveries or access to exclusive content and services. Some of the areas where subscription apps are growing include:

1. Gaming:

In the gaming industry, subscription-based apps are becoming more and more popular since they provide both users and developers with a number of advantages. Access to a big game library is only one of the ways that subscription applications are dominating the gaming sector. For a monthly charge, users of subscription-based gaming services can access a large library of games via services like Xbox Game Pass and PlayStation Now.

Players can do this to find and play new games without having to buy them all separately. Apps with a subscription model give their creators a consistent flow of recurring income, which can support further upgrades and development. Additionally, it provides premium content that might help keep players playing longer, such bonus levels or special in-game goodies.

2. Food and meal delivery:

Subscription-based meal delivery apps are becoming more prevalent, as they allow customers to have fresh and healthy meals delivered straight to their door on a regular basis.

3. Streaming services:

Streaming services such as Netflix, Hulu, and Amazon Prime have become incredibly popular, as they offer a wide variety of TV shows and movies on demand.

4. Online education:

Subscription-based education apps are becoming more popular, as they offer access to a wide variety of online courses, tutorials, and other educational resources.

5. Personalized styling and fashion:

Subscription-based fashion apps that offer personalized styling and clothing recommendations are becoming increasingly popular, as they allow customers to try new styles and trends without committing to a full purchase.

6. Health and wellness:

Subscription-based health and wellness apps are becoming more popular, as they offer access to workout plans, meal plans, and other resources to help users achieve their health and fitness goals.

7. Entertainment and hobbies:

Subscription-based apps that offer access to exclusive content, such as podcasts and e-books, are becoming increasingly popular, as they allow customers to explore new interests and hobbies.

Overall, subscription applications are becoming more and more popular because they provide users with a number of advantages, such as convenience, access to exclusive content, and personalized experiences. Subscription apps are expected to expand into even more industries in the future as technology develops and more companies adopt subscription models.

What Changes have occurred in the app Subscription models and why?

The mobile app sector will also have certain effects, and as disposable money falls, user segments may no longer find it natural or simple to subscribe to apps. As a result, relying on the subscription model in 2023 could not be as successful as anticipated.

We can see that subscriptions are increasing, and some statistics are interesting to review. However, there is a catch, “The changes in the economy”.

Google Play’s app subscription revenue increased tenfold between 2014 and 2017. According to Data.ai, in 2020, subscriptions accounted for 94% of the revenue from the top U.S. non-gaming applications on Google Play and 79% of that from the iOS App Store. Therefore, these results are consistent with studies that emerged from sources like SensorTower and revealed that app users had significantly increased their likelihood of becoming subscribers.

According to Statista, the install rates for non-gaming Android apps decreased by 12% in the months before January 2022 as compared to January 2021. The app store also observed similar patterns, with install rates for iOS non-gaming applications declining by 16% in March 2022 compared to January 2022, while install rates for gaming app subscriptions fell by 18.6%. The gaming app installs fell by 14%. What changed, then, when subscriptions became the norm?

We don’t know when the US economy was impacted by the recession, but it made a difference. People’s anxieties naturally showed up in their buying habits as they reconsidered their financial decisions, which naturally affected consumer spending. Many people are reducing or suspending their subscription services in anticipation of the slump. Therefore, the behavior is evident in app subscriptions.

Since inflation is already a reality, it is linked to the recession and pushes people to think about the worst-case situations. Users create or reduce their monthly budgets, limit their spending, and use every dollar to pay off their credit card loans as a result of the financial strain brought on by rising costs and the declining value of money.

The app market is also impacted by economic shifts. As a result, numerous app market categories are also impacted. The future might therefore be hybrid. Due to the downturn, acquiring new users for your app, keeping those you already have, and recapturing churned users will all take on new forms.

Due to the downturn, acquiring new users for your app, keeping those you already have, and recapturing churned users will all take on new forms.

The secret is to keep an eye on the current economic momentum and modify your products. Therefore, it makes sense to allow your target audience the freedom to receive what they need without committing them to ongoing plans.

When selling subscriptions, it’s crucial to consider how you may incorporate one-time purchases into your app’s monetization strategy. You can keep your users interested even if they can’t commit to recurring transactions by offering simple one-off purchases.

Top Subscription Apps

If there is one business model that has endured in these uncertain times for governments, companies, and consumers, it would have to be subscriptions. In recent years, the digital subscription industry has witnessed tremendous expansion. And the users were happy with that!

Digital subscriptions provide a number of advantages over traditional ones, including being more flexible, less wasteful, and more affordable. For consumers, digital subscriptions have made a variety of daily chores more convenient, including watching movies online, reading the news, going to the gym, and renting a car.

One of the largest subscription areas in terms of consumers, conversions, and revenue would have to be OTT. In the OTT industry alone, the number of subscribers has increased by almost 50%.

What is Digital Subscription?

A digital subscription is a series of planned transactions for a platform or preferred digital product that you use. There are many different product-based subscriptions available that can assist your daily life, so these digital subscriptions aren’t only limited to OTT platforms.

If you want to keep up with the most recent news, you may join up for a digital news subscription. If you would like to get medicinal supplements delivered to your home, you can sign up for a healthcare and wellness subscription. You might also wish to sign up for music streaming services if you like music. So, let’s see what are the best subscription platforms:

Some of the Best Subscription Models/Platforms

  • Disney + Hotstar

If you want to watch something interesting while simultaneously recalling a sentimental experience, Hotstar is one of the best OTT platforms to use. They feature a large variety of Disney films and programmes, including your favorite cartoon characters like Donald Duck, Mickey Mouse and others that you used to watch as a kid. They also feature some of the most well-known films, which you shouldn’t miss. On Hotstar, you may stream limitless live sports events as well as Hotstar specials and serials in 4K quality across four screens.

  • Zee5

Looking for a good regional TV show to watch, preferably one in Hindi? Then Zee 5 is a fantastic choice. Zee 5 has been around for a while and has a lot of happy clients who keep buying more Zee 5 memberships. They broadcast a carefully crafted lineup of the most well-liked shows. The most watched movies and popular serials are both accessible on the same site. TV series, kid’s programmes, and live TV are broadcast by ALT Balaji. Additionally, premium subscribers get access to simultaneous video viewing on up to five separate devices.

  • SonyLiv

If you want to binge on some excellent entertainment selections, SonyLiv is yet another recommended platform. These fantastic shows are simply waiting for you, so don’t miss out! If you’re seeking a localized platform with a focus on Indian viewers, SonyLiv is unquestionably another option. You want to know what SonyLiv’s finest feature is. WWE events, PPVs, live WWE RAW and Smackdown, and NXT are all broadcasted on it.

  • Times of India

With your morning cup of tea or coffee, you need the best news, and a Times of India membership keeps you covered with a vast variety of the most recent and carefully chosen news. The Times of India offers news on sports, business, entertainment, blogs, and opinions from well-known columnists. Additionally, this site only retrieves verified and trustworthy news. They have every feature that you would love.

  • Spotify

For streaming music, many people use Spotify. With the help of a user-friendly software, customers have access to millions of songs and podcasts. Instead of purchasing a song people like to stream music.

Compared to competitors, Spotify offers a better user experience and a larger selection of music. Although there is a free version that contains commercials, nothing can match the thrill of listening to music without the advertisements. Before deciding to sign up for a full membership, listeners can try the service for free for a month. With 456 million active users, Spotify generated over $3 billion in revenue in just the third quarter of 2022.

  • Pharmeasy

Pharmeasy is dedicated to making people’s lives better and making healthcare simpler. They sell medical products and run an online pharmacy. Your drugs will always arrive on time because they also have a guaranteed delivery time of 24 to 48 hours, so you’ll never be caught off guard. Additionally, you can arrange diagnostic tests online using prescriptions. That is unquestionably a lot.

On any orders for medications or medical supplies, you could get an extra 5% cashback. Incentives for diagnostic orders are 10%. There is no charge for a doctor’s teleconsultation. Shipping is free for orders of medication or medical supplies that total more than $200.

  • Twitch

Twitch is a live-streaming app with daily usage of 15 million users. Although DJs and other lifestyle and entertainment content producers use the app, this app is also preferred by DJs.  On this site, the gaming community is considerably large and strong. Professional gamers interact in real time with their viewers while livestreaming their missions.

Through a split-screen option, viewers may see both the game and the player at once. Links are useful for leaving comments and buying games as well. With over 788 million hours of streaming, Twitch hopes to surpass last year’s revenue of $2.6 million in 2022.

Digital subscriptions have made life simpler for mobile users. Additionally, you now worry less about subscriptions and payments thanks to new capabilities in select applications, like auto-renewals and a simple toggle function. All throughout the world, subscription service providers are trying to grow their companies so that they can provide customers complete coverage of every product or subscription they want.

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Subscription Management Platforms/ Tools

 A corporate architecture called subscription management optimizes subscription delivery through tech-driven automation and shared data. Improved customer experiences across the purchasing process encourage adoption, renewals, retention, and growth.

What are Subscription Management Platforms?

A sales enablement technology solution called subscription management software enables you to automate subscriptions, renewals, recurring billing, collections, quoting, and revenue recognition.

It is used in B2B businesses for a variety of purposes, including:

  • Standardize the offerings and terms of payment
  • Streamline renewals
  • Personalized pricing
  • Customized billing
  • Plan change or upgrades

How do Subscription Management Tools Work?

The purpose of subscription management tools is to increase an organization’s ability to forecast resource allocation and estimate revenue while optimizing the value of the customer. Effective oversight must be used during the implementation and upkeep of these models in order to ensure that orders are properly fulfilled, income is appropriately recognized, and consumers are satisfied.

By combining data with financial and resource management data, subscription management extends the client relationship over numerous customer lifecycle cycles. Businesses are able to give each customer a unique solution thanks to this, and they can also boost customer lifetime value, enhance customer experience, and produce more stable revenue, all of which could form the basis for future innovation.

What are the best 5 subscription management tools?

1. Chargebee

Through automated recurring billing, subscription management, and revenue analytics, the Chargebee platform enables subscription organizations to capture, hold onto, and maximize revenue prospects. Chargebee turns into the brain of your revenue operations by easily connecting with your IT stack. It also improves your sales, success, and financial operations’ efficiency to hasten the rise of your subscription income.

2. Sage Intacct

 The versatile and adaptable financial platform Sage Intacct offers thousands of companies all over the world comprehensive accounting capabilities. Sage Intacct may be useful to any account department or finance team so that they can access a variety of essential accounting tools.

Additionally, it includes features like built-in dashboards, real-time reporting, time and expense management, project accounting, revenue management, and worldwide consolidations for several organizations. The software offers specialized features for the following industries: Nonprofit, Software and SaaS, Professional Services, Financial Services, Healthcare, Hospitality, Wholesale Distribution, Construction and Real Estate. The software can be used in a wide range of industries as a horizontal accounting system.

3. Paddle

 The whole SaaS payment, tax, and subscription solution is provided by Paddle. Paddle does everything on one platform rather than cobbling together and managing a fragmented payments stack, offering you a single source of data and revenue truth. It handles every aspect, including dunning, international tax compliance, fraud prevention, reporting, subscription management, payments, invoicing, and renewals.

What is the process?

The following are handled by Paddle on your behalf as your Merchant of Record:

  • Numerous payment service provider integrations responsibility for collecting and sending sales tax from all around the world.
  • Fraud prevention
  • Reconciliation of revenue data for subscription billing and payments. Lowering churn and collecting returned money.
  • Support questions pertaining to billing.

4. Billsby

Billsby is a robust “Saas” recurring payment platform that has been named by G2 as the best subscription billing software. Billsby is made to guarantee that users may go live rapidly, frequently in less than two hours. It has a group of helpful, qualified advisers ready to assist your business in going live to aid with this process.

Billsby focuses on offering excellent customer service at a competitive price; in fact, the clients rank the technology as the best on G2. Billsby features a helpful, well-documented API for developers building solutions for clients. The Billsby team is available to help programmers so that a migration or new system construction goes smoothly.

5. Recurly

Leading companies rely on the subscription and billing platform Recurly to help them increase their recurring income more quickly, intelligently, and effectively. Too many subscription businesses are having difficulty expanding simply because their platform prevents them from foreseeing and addressing client demand.

They are unable to identify the source of their most lucrative clients. They are also unable to modify and upgrade their offers accordingly. They want a user-friendly platform that allows them to react rapidly, data-driven insights to attract and retain more customers, and an experienced partner to assist them in managing subscriptions at scale.

Any e-commerce business must understand subscriptions as a key idea. You shouldn’t undervalue the significance of providing a good user experience and secure payments to your clients. You can achieve it by using subscription management software.

There are various advantages to using subscription management software for e-commerce. These technologies are used for subscriptions to help businesses track customer billing and subscriptions.

You may accept payments online regardless of the size of your audience, and enhancing user experience is crucial to increasing sales conversion. Missing out on subscription management solutions could render you and your company obsolete in today’s tech-driven world.

Conclusion

Although the market for subscription-based apps has enormous potential, the fear of a recession makes it crucial to change the attention to growth factors in order to preserve the app’s financial stability and future prospects. Try out a few other options. Introduce special products, if you can. To determine how well they convert, test different pricing points and offers.

Additionally, spend money collecting zero-party data to customize your app’s features, such as the paywall. Certain demographic groups might have been unaffected by the recession and will react to your offers in a different way. Try targeted offers, to put it another way. Users should be satisfied in the long run so offer compelling content that helps you get more subscribers.

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