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February 24, 2019
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US iPhone users spent, on average, $79 on apps last year, up 36% from 2017

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Apple’s push to get developers to build subscription-based apps is now having a notable impact on App Store revenues. According to a new report from Sensor Tower due out later this week, revenue generated per U.S. iPhone grew 36 percent, from $58 in 2017 to $79 last year. As is typical, much of that increase can be attributed to mobile gaming, which accounted for more than half of this per-device average. However, more substantial growth took place in the categories outside of gaming — including those categories where subscription-based apps tend to rule the top charts, the firm found.

According to the report’s findings, per-device app spending in the U.S. grew more over the past year than it did in 2017.

From 2017 to 2018, iPhone users spent an average of $21 or more on in-app purchases and paid app downloads — a 36 percent increase compared with the 23 percent increase from 2016 to 2017, when revenue per device grew from $47 to $58.

However, 2018’s figure was slightly lower than the 42 percent increase in average per-device spending seen between 2015 and 2016, when revenue grew from $33 to $47, noted Sensor Tower.

As usual, mobile gaming continued to play a large role in iPhone spending. In 2018, gaming accounted for nearly 56 percent of the average consumer spend — or $44 out of the total $79 spent per iPhone.

But what’s more interesting is how the non-gaming categories fared this past year.

Some categories — including those where subscription-based apps dominate the top charts — saw even higher year-over-year growth in 2018, the firm found.

For example, Entertainment apps grew their spend per device increase by 82 percent to $8 of the total in 2018. Lifestyle apps increased by 86 percent to reach $3.90, up from $2.10.

And though it didn’t make the top five, Health & Fitness apps also grew 75 percent year-over-year to account for an average of $2.70, up from $1.60 in 2017.

Other categories in the top five included Music and Social Networking apps, which both grew by 22 percent.

This data indicates that subscription apps are playing a significant role in helping drive iPhone consumer spending higher.

The news comes at a time when Apple has reported slowing iPhone sales, which is pushing the company to lean more on services to continue to boost its revenue. This includes not just App Store subscriptions, but also things like Apple Music, Apple Pay, iCloud, App Store Search ads, AppleCare and more.

As subscriptions become more popular, Apple will need to remain vigilant against those who would abuse the system.

For example, a number of sneaky subscription apps were found plaguing the App Store in recent weeks. They were duping users into paid memberships with tricky buttons, hidden text, instant trials that converted in days and the use of other misleading tactics.

Apple later cracked down by removing some of the apps, and updated its developer guidelines with stricter rules about how subscriptions should both look and operate.

A failure to properly police the App Store or set boundaries to prevent the overuse of subscriptions could end up turning users off from downloading new apps altogether — especially if users begin to think that every app is after a long-term financial commitment.

Developers will need to be clever to convert users and retain subscribers amid this shift away from paid apps to those that come with a monthly bill. App makers will need to properly market their subscription’s benefits, and even consider offering bundles to increase the value.

But in the near-term, the big takeaway for developers is that there is still good money to be made on the App Store, even if iPhone sales are slowing.

News Source = techcrunch.com

Apple’s new developer guidelines signal that scammy subscription apps’ time is up

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Apple is sending out a message to app developers: stop tricking users into subscriptions. The company updated its guidelines for mobile developers to more clearly spell out what is and what is not allowed, according to 9to5Mac, which spotted the recent changes. The improved documentation comes at a time when subscriptions are becoming something of a plague on consumers.

Their rapid proliferation is turning everything into a subscription service, which could ultimately see consumers dropping favorite apps because they can’t afford dozens of ongoing payments. But more urgently, Apple’s lax enforcement its rules around subscriptions had allowed shady app developers to financially benefit.

Subscriptions are a big business the app stores, as the industry has begun to shift over to a recurring revenue model instead of one-time purchases within free apps or paid downloads. For developers who continue to improve apps and roll out new features, subscriptions give them the financial means of continuing that work, instead of constantly hunting for new users.

However, not all developers have been playing fair.

As TechCrunch reported last fall, a number of scammers had begun to take advantage of the subscription model in order to trick consumers into recurring payments, in addition to constantly pestering their free users to upgrade.

We found apps that constantly popped up upgrade prompts or hid the “x” to close the prompt’s window, as well as apps that promised free trials that actually converted after a very short period – like three days, for example. Others had intentionally confusing designs where subscription opt-in buttons would say things like “Start” or “Continue” in big text, while the text that explains you’re actually agreeing to a paid subscription is tiny, grayed out, difficult to read, or hidden in some other way.

Apple’s developer guidelines had clearly prohibited fraudulent behavior related to subscriptions, but Apple has now spelled out the details in black-and-white.

As 9to5Mac spotted, updates in Apple’s Human Interface Guidelines and App Store documentation now explicitly state that the monthly subscription price has to be clearly displayed, while information about how much people can save if they opt for longer periods of time, like a year, has to be less prominent.

Messages about free trials have to say how long trials last and what will be charged when the trial ends.

The new documentation has also been clearly organized, and includes screenshots of what a proper subscription sign-up flow should look like, as well as sample text developers can modify for use in their own apps. It even suggests that developers allow customers to manage their subscriptions within their app, rather than requiring them to find the subscriptions section in the App Store.

Today, many customers don’t know how to stop their subscriptions once activated – it takes several steps from the iPhone’s Settings to get into subscriptions, and still a few from within the App Store. (It’s also not that obvious. You tap on your profile icon on the top right of the Home page, then your Apple ID, then scroll down to the bottom of the page. By comparison, you can reveal the “Subscriptions” section with just one tap on Google Play’s left-side hamburger menu.)

While the existence of clear documentation that better spells out the do’s and don’ts is certainly welcome, the real question now is how well will Apple enforce its rules?

After all, Apple was supposedly not okay with subscription fraud and tricks before, yet its App Store was home to a good handful bad actors – particular in the utilities section.

Of course Apple doesn’t want to develop a reputation for allowing misleading or scammy apps to thrive in its App Store, but it simultaneously benefits when they do.

Although games still account for the majority of App Store spending, non-gaming apps across app stores now account for just over a quarter (26%) of total spend, according to App Annie’s “State of Mobile 2019” report. And that number has increased 18% since 2016, mainly because of in-app subscriptions.

Getting a handle on the proper way to market subscriptions is key. But there’s also the larger question as to whether subscriptions will be a sustainable model in the long run for the developers. There’s a bit too much of a gold rush mentality around subscriptions in today’s App Store, and it’s hard to resist the near-term benefit of money that rolls in monthly.

But as more developers adopt subscriptions, consumers will ultimately have to decide which have value for them. People are already paying for so many subscriptions – both inside and outside the app stores. Streaming video like Netflix, streaming music like Spotify, streaming TV like YouTube TV, subscription boxes like Ipsy, Prime memberships, grocery delivery like Instacart, smart home subscriptions like Ring or Nest, newspapers and magazines and newsletters, and so on. What’s really going to be left for a selfie editor, to-do list or weather app, in the end?

Many consumers are already starting to hit the point where they don’t have much more to spend, and will have to turn some subscriptions off in order to turn others on. Subscription app user bases could then contract, with only core customers remaining paying subscribers, as casual users return to free products – like Apple’s own built-in apps, for example, or free services offered by well-heeled tech giants, like Google.

Apple would do well to advise developers when subscriptions make sense for an app, not just how to implement and design them. Subscriptions should offer a real benefit, not just continued ability to use an app. And there could be cases where a one-time purchase to retain a customer who continually declines to subscribe makes sense, too.

 

 

News Source = techcrunch.com

Roku’s à la carte premium subscriptions arrive today, but without HBO

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Earlier this month, Roku announced it would soon begin selling subscriptions to premium video services directly from its own TV and movies hub, The Roku Channel. Today, those subscriptions are going live, allowing Roku users to sign up for channels like EPIX, Showtime, STARZ, and others, then stream them without needing to install the channel’s own app on their Roku device.

Instead, all the content from the add-ons will be found in The Roku Channel section itself, alongside the other free and ad-supported TV shows, movies, news, sports, and entertainment programming already offered. However, the premium channels will have their own area inside The Roku Channel, including a spot on the homepage, as well as their own dedicated tabs, the company earlier said.

In time, Roku hopes to leverage the data from users’ unique blend of subscriptions to better personalize its recommendations.

A number of companies today offer the ability to watch premium programming through add-ons subscriptions, but fewer allow you to do so à la carte – that is, most require you to subscribe to a core TV package first before adding on extras. Amazon’s Prime Video Channels is probably the best known of the à la carte providers, though Sling TV rolled out a selection of premium a la carte channels last year.

Roku doesn’t plan to offer its own “skinny bundle” base package of streaming TV content at this time, the company recently told TechCrunch.

“I think where we are today is really focused on these à la carte subscriptions,” said Roku’s vice president of Programming, Rob Holmes. “Ultimately, from a user standpoint, there’s a lot of value in being able to pick and choose exactly what you want to sign up for — without having to sign up for one of these base packages to start with. That’s how we think about it today.”

Once subscribed to one of Roku’s premium selections, customers will only be able to watch the content through The Roku Channel itself. In addition to the revenue split on these add-ons, this benefits Roku because it puts attractive premium content right next to Roku’s ad-supported fare of some 10,000+ free movies and TV episodes. When customers are in search of something to watch next, it will be easy for them to just browse within the section they’re already in.

Plus, Roku says add-ons subscribers won’t even be able to use the premium networks’ own apps at launch, which keeps them further isolated in Roku’s own universe.

In order for customers to watch the premium content outside of Roku devices, like Roku TVs or media players, they’ll need to install the free Roku mobile app. The updated version of the iOS app is arriving today, and the Android update will be available in mid-February, the company says.

The selection of premium networks at launch includes: STARZ, Showtime, EPIX, plus Baeble Music; CollegeHumor’s DROPOUT; CuriosityStream; Fandor Spotlight; FitFusion; The Great Courses Signature Collection; Grokker; Hi-YAH!; Hopster; Lifetime Movie Club; DOX, LOLFlicks, Monsters and Nightmares, Magnolia Selects, and Warriors & Gangsters presented by Magnolia Pictures; MHz Choice; NOGGIN; Shout! Factory TV, Smithsonian Channel Plus; Stingray Karaoke; Tastemade; Viewster Anime; and ZooMoo.

Notably missing from the lineup is HBO, which offers its own over-the-top streaming service, HBO NOW, and has deals with a number of à la carte and streaming TV providers.

Roku says the Premium Subscriptions feature will become available on select Roku devices in the U.S. today. They offer a 30-day trial period, and are paid for using the payment info you have on file with Roku’s own billing system.

All supported devices should receive the update in the coming weeks, starting with Roku players and then Roku TVs. To see if your device has been updated, look for a new row called “Browse Premium Subscriptions” below the Featured row in The Roku Channel.

 

 

News Source = techcrunch.com

Top 10 U.S. subscription video apps pulled in $1.3B last year, a 62% increase from 2017

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Subscriptions are booming on the app stores, and particularly subscription video apps thanks to the growing number of cord cutters who are choosing to stream their TV shows and movies, instead of paying for cable or satellite. In the U.S., the top 10 subscription video apps by revenue pulled in $1.27 billion in 2018 across both the iOS App Store and Google Play, according to new data from Sensor Tower – that’s a 62 percent increase over the $781 million spent in 2017.

It’s also three times higher than what was spent in these apps back in 2016.

The top app, not surprisingly, was Netflix – which snagged the spot for the second year in a row. It earned an estimated $529 million in the U.S., the report found. However, Netflix won’t maintain the top spot in the rankings in 2019, as the company recently made a decision to keep more of its subscription revenue to itself.

Netflix in 2018 had dropped in-app subscription sign-ups in its Android app on Google Play, then did the same on the iOS App Store in December. That will decrease its in-app subscription revenues this year, though it won’t immediately to zero because of revenues from existing subscribers.

The No. 2 top grossing app was YouTube, which is maybe more of a surprise to those who don’t realize that the app they use to watch free videos is making quite so much money through in-app purchases. But YouTube offers a couple different types of in-app purchases, including subscriptions to its ad-free tier, YouTube Premium, as well as virtual currency to be used in Super Chat.

Sensor Tower says YouTube took in less than half as much revenue as Netflix at around $223 million, but it grew substantially in 2018 – up 114 percent from $104 million in 2017.

HBO NOW was the No. 3 top grossing app, even though its subscriber base declined. The app generated 12 percent less in 2018 at $166 million, down from $189 million. The reason, naturally, was that the app was without “Game of Thrones” to attract viewers. That doesn’t bode all that well for HBO’s future without “Thrones,” unless its spin-off becomes a hit.

Hulu and YouTube TV were the No. 4 and No. 5, apps respectively. Hulu grew by 68 percent while YouTube TV jumped up a whopping 419 percent. CBS’s streaming app is doing decently, too, with 57 percent year-over-year growth in subscriber spending.

Much of that comes from streamers interest in the new “Star Trek” series. In fact, with the Season 2 premiere this month, CBS said its streaming service hit a new milestone across both subscription sign-ups and unique viewers in a weekend. While the network didn’t share exact numbers, it said the January ’19 weekend when the new season of “Star Trek:Discovery” aired eclipsed 2017’s previous record from the series premiere by over 72 percent, in terms of sign-ups.

 

Combined, 2018’s top 10 subscription streaming apps accounted for a sizable chunk – now 22 percent – of non-game app revenue on the app stores in the U.S. Their 62 percent revenue growth was also more than all the other non-game apps combined, which grew 56 percent year-over-year, the new report said.

Subscriptions – and not just for streaming apps – have become the new driver for non-game spending on the app stores, and that isn’t going to change anytime soon.

According to App Annie’s recent forecast for 2019, 10 minutes of every hour spent consuming media across TV and internet will come from streaming video on mobile. It estimates that total time in video streaming apps will increase 110 percent from 2016 to 2019, with consumer spend in entertainment apps rising by 520 percent over that same period. Most of those revenues will come from the growth in in-app subscriptions, the firm had said earlier.

 

News Source = techcrunch.com

Consumers spent $329M on the top 10 subscription video apps last quarter

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Last year, the top subscription video apps like Netflix and Hulu raked in a combined $781 million, and that trend is showing no sign of slowing down in 2018. In the third quarter of 2018, U.S. consumers spent an estimated $329 million in the top 10 subscription video-on-demand apps across the App Store and Google Play – a figure that’s up 15 percent from the $285 million spent in Q1.

The data is the latest in a new report from app intelligence firm Sensor Tower, which has been following the growth of subscription video apps for some time. Last year, for example, it found that Netflix’s app topped the charts in terms of revenue, when compared with all the other non-game apps on the market.

Netflix hasn’t fallen from its top ranked position, the new data shows. In fact, it’s continuing to grow.

The app pulled in an estimated $132 million in consumer spending across the app stores in Q3, which is up 78 percent from the $74 million spent in the third quarter of 2017.

However, Hulu is now growing faster, the report found. It saw subscription revenue jump 86 percent to $39 million, up from $21 million a year ago.

It seems some consumers may have made the move to Hulu thanks to the extra cash they had on hand, thanks to dropping their HBO subscription.

The only subscription video app that saw revenue decline in Q3 was HBO NOW, which took in $41 million in the quarter, down 40 percent from the $68 million in Q3 2017. But notably absent this quarter was the network’s biggest draw, “Game of Thrones,” which had been airing at this time last year. A drop was expected.

The top grossing chart of these subscription video apps for Q3 2018 looks very similar to last year’s in terms of the apps included, and sometimes, even their rankings.

But two services made moves, the report says.

YouTube TV jumped from $3 million in the year-ago quarter to $16 million in Q3 on Apple’s App Store, thanks to its expanded market penetration and consumer adoption. And ESPN Live Sports, which added in-app subscriptions in Q2, grossed $4.6 million in the third quarter, up 119 percent from Q2.

Even CBS is doing well, despite the fact that not everyone loves the new “Star Trek.”

Still, it appears CBS made a good move by betting on fans’ devotion to the franchise, as U.S. consumers spent $6 million in the app in Q3 2018, up 50 percent from the $4 million spent in Q3 2017.

The report’s data includes subscription revenues only, not refunds or in-app advertising revenues, Sensor Tower notes.

The broad increases in consumer spending on these video apps is yet another example of the significant and growing subscription business – much of which is taking place on mobile. Subscriptions accounted for $10.6 billion in consumer spend on the App Store in 2017, and are poised to grow to $75.7 billion by 2022, an earlier report found.

However, the top subscription apps aren’t all video apps. Others that consistently rank highly in the U.S. include Tinder, Spotify and Pandora, for example. Currently, the top grossing chart for the App Store includes a number of non-games, like Netflix (#1), YouTube (#2), Tinder (#3), Pandora (#4), Hulu (#7), and Bumble (#8).

News Source = techcrunch.com

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