The Billion-Dollar Subscription Business in the App Store

95
8min.

After trying dozens of app monetization formulas, Apple has come to the conclusion that subscriptions are the most competent. Today, the top five most popular apps in the App Store alone generate over $10 billion for the company. Not long ago, paid subscriptions scared everyone: developers and customers alike. They didn't want to work under this model. What has Apple done to overcome this barrier? Well, here we go!

Rain of dollars.

The Backstory

The first subscriptions were introduced in the XVIII century, distributing books and magazines among the nobles in this way. With the advent of digital technology in the 21st century, Spotify and Netflix took over this initiative. Their user base has greatly expanded, because now you can get access to all the music in the world for $5 a month. Users were willing to pay for services that make life easier and more interesting.

Sacrifices for a Good Cause

Having seen the success of subscription services, other companies were formed with a new business model in mind. Everyone quickly began to realize the potential they now had. Let's find out how they manage to entice users to pay every month.

Money Is Everything

When revenue is easy to plan, a developer is much more enthusiastic about doing what they love to do. The idea of subscriptions was not primarily sold to users, but to developers. It was explained to them how it would work for them, why a predictable income was better than a spike, and how they would now be able to keep their product viable for much longer. Years later, we don't understand how we ever got by without subscriptions in apps in the first place. The idea of paying for a cool service seems as natural as buying food.

Subscription and User

Naturally, Apple has its marketing machine running at full speed. With its help, a trillion-dollar capitalization is maintained.

Train.

Note that this is not an official report and Tim Cook did not give any insights, but we have savvy marketers and copywriters. This team has put together a list that maps out the key points of Apple's subscription rollout policy.

Selling Perfectionism

As it happens, Apple don't sell what doesn't work well. The apps in their shops methodically get rid of bugs and fix glitches promptly. A paid subscription gives the user the right to complain about problems at any time, but if the app is working smoothly, there will be no complaints at all.

Chip Monetization

Often, an app has one super quality and 5-10 smaller qualities. Apple monetize just the super-quality, the rest are given less attention. Blinded by the app's unique qualities, the user realizes what they have to pay for once a month.

Financial Habits

The price of an app is never formed from the ceiling. Marketers working with iOS spend 24 hours a day studying the financial habits of the app's target audience, so they know in advance how much the consumer is ready to pay. Not only the state of the wallet is taken into account, but also age, gender, and geography.

From Interest to Payment

Once the user is prepared, the process of pushing the consumer to purchase a subscription is underway. The user is captured on all fronts, acting on them visually, through design and functional pleasure centres. The user sees for themselves the bonuses they give to their favourite company.

Onboarding

The term originates from the phrase "on board", which means a welcoming phrase in English. For the user, it is the realization that they are now a member of the app's golden club, because they are buying a subscription from it. Especially in app-services, you can see what you can / can't do with a subscription. How can you not get elated with success here?

Trial

The user has to ride the rollercoaster of the app the full way during the trial period. For this purpose, Apple together with the developers are not shy of flooding the trial subscription user with a lot of guides on what to do with the new premium features. All usability triggers come into play. It's hard to go overboard, you need to win the user's attention in a month, so that after that he pays for the service (possibly) for several years.

Family Subscription

Among the other features that try to elegantly hook the user into a subscription, the most practical one wins. Who wouldn't want to pay $5 on their own when in a family of six that amount will be measured in cents?

The obviousness of the benefit pushes for subscriptions in the strongest possible way. Apps like Spotify additionally set up rate packages like "Student." Netflix is also adding affordable packages for Eastern Europe and parts of Asia.

Augmented Reality

Why not make this feature a subscription bonus? In one of our articles, we told you about a furniture shop that made a million-dollar fortune by introducing in-app furniture fitting in your own flat.

If any of the domestic furniture makers would like to implement a similar functionality — a paid subscription will help the implementation and pay for it.

Top Recommendations

This small guide we have compiled, inspired by Meta's recommendations for incentivizing subscriptions:

  1. Start by creating a custom link. Once the feature is implemented, you should post a publication about it on all social media platforms. The publication should definitely include a description of the custom link.
  2. When communicating with your target audience, don't forget to gently remind them that they will experience the real fun and full functionality when they take out a paid subscription.
  3. If you feel strong and confident, go live. This will allow you to speak directly to your subscribers. Their questions may be the most useful feedback you've ever had.
  4. Update your stats on a regular basis. This allows you to better understand what content your subscribers like, and what content would be better to sacrifice for the main goal.
  5. Browser promo link. Encouraging people to buy your app can be done there as well. Moreover, a fine-tuned promotional link makes it possible to avoid unnecessary commissions. We will definitely customize it to your needs.

Output Available Without Subscription

UK developers are still cautiously looking at paid subscriptions for their products. We appeal to them — become bolder! Yes, we are not in America, but thanks to the Internet and comprehensive support from App Store, you are closer to it than ever. Not only do you get a regular income, but also a loyal audience that will stop counting pennies for subscriptions when you can prove your own value to them. You can do it! Brander will help you do just that.

The head is a beacon.
28 December 2023
5 / 5 (1 vote)