Subscription App Revenue Growth in 2020

Record App Downloads and Subscription Revenue in 2020

Global app downloads and consumer expenditure reached unprecedented levels in 2020, totaling approximately $111 to $112 billion based on various estimations. A significant portion of this spending was attributed to subscription payments, as highlighted in a recent report by Sensor Tower.

Growth in Subscription App Revenue

Last year witnessed a 34% year-over-year increase in global subscription app revenue generated by the top 100 subscription apps (excluding games), reaching $13 billion. This represents a rise from the $9.7 billion recorded in 2019.

The App Store, historically leading in consumer spending, accounted for a substantial share of this revenue. In 2020, the top 100 subscription apps generated $10.3 billion on the App Store, a 32% increase from 2019. Google Play recorded $2.7 billion, a 42% growth from $1.9 billion in the previous year.

Potential Peak and Shifting Dynamics

Evidence suggests that the growth rate of subscription revenue may be approaching its peak. A degree of deceleration and stagnation can be linked to larger applications, such as Netflix and Tinder, which have implemented strategies to bypass in-app purchase requirements imposed by the app stores.

Globally, revenue from the top 100 subscription apps constituted around 11.7% of the approximately $111 billion spent by consumers on in-app purchases in 2020. This proportion remains consistent with that observed in 2019.

In the fourth quarter of 2020, 86 of the top 100 highest-earning apps globally offered subscriptions, a decrease from the 89 that did so in the corresponding period of 2019.

U.S. Market Trends

Growth in subscription app revenue within the U.S. is now lagging behind global trends. While still experiencing a 26% year-over-year increase to reach nearly $5.9 billion in 2020, this growth rate is slower than the 34% observed worldwide.

Subscription payments from the top 100 apps represented 17.6% of the $33 billion U.S. consumers spent on in-app purchases in 2020, a decline from the 21% share recorded in 2019.

During the fourth quarter of 2020, 91 out of the 100 top-grossing apps in the U.S. were subscription-based, down from 93 in the same quarter of the previous year.

Top Subscription Apps

The leading subscription apps differed between the App Store and Google Play. YouTube topped the charts on the App Store, while Google Pay users favored Google One, Google’s cloud storage service. Tinder secured the second position on the App Store, and Disney+ claimed the second spot on Google Play.

The top 10 apps across both platforms included YouTube, Disney+, Tinder, Pandora, Google One, Twitch, Bumble, HBO Max, Hulu, and ESPN. These top performers demonstrate consumer willingness to pay for entertainment subscriptions, such as streaming services. However, other categories face greater challenges in achieving similar success, with dating apps being a notable exception.