Subscription 101 — A Road For App Developers To More Revenue, And Longtime Success

Cherry
4 min readJan 31, 2022

Subscription-based apps are the future of the mobile app industry.

Today’s customers are more demanding and less loyal than ever before. They want their needs to be met, but they also want to be entertained. As a mobile app developer, you might find it difficult to meet these demands, and at the same time, you look for ways to utilize your apps to make money. And one of the most fundamental ways to make profits from an app is to offer subscription plans.

If you are planning on using a subscription-based business model to monetize your app, keep reading. Here’s everything you need to know and frequently asked questions by developers about the subscription model.

What Are Subscription-based Apps?

Subscription-based apps are the kinds of apps that sell repeatedly accessed services. In this sense, they are very similar to monthly magazine subscriptions, only instead of a physical copy, you’re getting access to an app or program through your smartphone, tablet, or computer. They’re also known as access-based apps.

Apple announced that subscription-based apps would be allowed in the App Store in 2016. Since then, more than 1/3 of all apps use it and subscription for iPhone became a popular business model.

What Are The Top Subscription Apps?

According to the latest metrics, YouTube, Disney+, Tinder, Pandora, Google One, Twitch, Bumble, HBO Max, Hulu, and ESPN are the top subscription-based apps in both stores. Entertainment, music, and dating services dominate the top-earning apps.

Image: SensorTower

How Do Subscription-based Apps Work?

Subscription-based apps offer periodic (daily, weekly, monthly, seasonal, etc.) usage to their service. These apps provide a free trial for a limited time and then receive payment on a regular basis.

Why Are All Apps Subscription-based? Why Do So Many Apps Have Subscriptions?

The advantages of using a subscription model for your mobile app,

1. Better Revenue Prediction & Cash Flow Management
2. Improved Customer Loyalty
3. Better Growth Opportunities
4. Higher Customer Engagement

So, as you can understand, from the biggest companies in the world to small businesses, seeing your future and having a repeated payment circulation is beneficial in every way.

Do subscription apps make money? How Much Do Subscription Apps Make?

The revenue of subscription-based apps increased to $13 billion in 2020, iOS was responsible for 79 percent of revenue. From 2016 to 2021, subscription-based apps continued to grow and are estimated to provide more revenue in the future.

Source: SensorTower

Do You Pay Monthly For Apps?

Not all apps receive payment monthly. Each mobile app that’s working with a subscription model receives payment on a different time basis.

Daily, weekly, bi-weekly, monthly, semi-annual, yearly/annual, or seasonal are the time basis of subscription model businesses,* so as subscription-based apps.

Are Subscription Apps Worth It?

Subscription-based apps are primarily customer-driven applications. The user requests the product and is in charge of how much they want to use it, as well as when they want to use it.

These apps can send out notifications about new products and give the consumer the option of either canceling or resubscribing. Also, subscription-based apps can offer discounts to the users, since they can see the revenue they will get in the long run. So in the end, subscription-based models are worth it to use for developers and a smart and profitable choice to make the most of their mobile apps.

We’ve covered why subscription-based apps are beneficial in our blog. If you’re interested and want to know more about this topic, you can read our article from here.

Does Google Take A Cut Of In-App Purchases?

Google Play Store used to cut 30% in the first year, and 15% after a year from apps and in-app purchases.

But from the beginning of 2022, this amount of cut has been reduced to 15%.

Brett Jordan on Unsplash

Does Apple Take A Cut Of In-App Subscriptions?

App Store also cut 30% in the first year, and 15% in the second year from apps and in-app purchases. If you make less than $1 million in a year, App Store cuts 15% through Apple’s App Store Small Business Program, if your app is qualified enough to their standards.

Building a mobile app adoption strategy is crucial if you want to succeed in today’s fierce competition. Mobile applications tend to go viral, attracting and racking up millions of users very quickly. Unfortunately, not every mobile app is lucky enough to get featured on the Apple App Store or Google Play Store for free.

And in some cases, a subscription-based model could be the best choice for your mobile app.

So, if you are interested and would like to know more,

please drop us an email: “hello@getcherry.app

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Cherry

App Publishing Company. | Unlock the full potential of your app. Submit your app now: https://getcherry.app