Apple App Store Revenue

One of the apps that I help with is the Times & Sunday Times iPad app. It also happens to be the highest grossing app in the UK Apple App store which is not a game. Since the app was rebuilt, it’s been 5th 2013 and 8th 2014 (according to Apple’s ‘Best of’ annual summary).

The apparent drop from 5th to 8th is not due to a decline in sales, it’s related to two other changes in 2014:

  • some of the big title games are getting better at using the Freemium approach and encouraging IAP
  • we actually make a lot more from ‘direct’ sales in the UK as opposed to App Store based IAP

Unfortunately, being part of a listed company has some restrictions which prevent me for sharing the exact values related to this apps IAP revenue vs it’s direct subscription revenue.

Indies should use In App Purchase (IAP)

If you are an indie developer, the Freemium IAP route probably makes the most sense. In fact some indies have started publishing their financial returns, which makes for interesting reading for Apple fanboys but it is potentially disturbing for the folks that still believe in the utopian Android eco-system.

The numbers behind the beautiful Monument Valley game make for interesting reading. Although they do skirt around how they publicised the app. Note that they had to change revenue generating tactics for the Google Play store.

It’s also interesting to note that the Apple IAP ecosystem generated $10Bn in 2014. Not an insignificant sum. However, it becomes a less exciting number when you consider it’s the revenue generated by 1.4M apps.

Then there is the wild, wild west which is Google Play. Even Google recognise that it’s difficult for developers to make useful amounts of profit on the Play store. In my experience Android consumption of paid for content is very low. To the point where you sometimes wonder if it’s worth trying.

Key Apple IAP limitations

  • obtaining customer or address information must be optional. This makes communicating with your customers rather tricky, unless you feel like bombarding them with Push Notifications
  • app bundling only works for paid apps. Paid apps represent about 4% of the apps in the Apple stores. Thus it feels like Apple have missed the opportunity of bundling a group of Freemium apps. Surely this would have been of interest to a large number of developers?

News UK has benefitted from using the IAP approach to generate revenue in non-domestic markets e.g. US, Australia, Canada, Switzerland, France, …

In effect we’ve used the App Stores to test the markets to gauge the level of interest in our brands and content.

It will be interesting to see what we get out of the current App Store Optimisation (ASO) work.

Direct subscriptions

The Times & Sunday Times direct subscription is an interesting approach. It offers customers a variety of combinations (one of the benefits of running MVT on the store front). A shout out to our friends at the House of Kaizen who have helped to transform our stores and checkout. The key elements within the bundle are a smartphone app, tablet app (as the universal approach was not appropriate), web access and exclusive membership offers.

The overarching aim is to wrap the high quality content in a high quality experience. I think it’s fair to say that traditional competitors have poured scorn on this approach, but so far the revenue returned is better than the pure app store approach.

Image courtesy of Times Newspapers Ltd.