Hemendra Singh

3 years ago · 4 min. reading time · ~100 ·

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How App Subscription Business Model helps to maintain apps sustainability

How App Subscription Business Model helps to maintain apps sustainability

Enterprise Plan


How App Subscription Business
Wr) Model helps to maintain
apps sustainability
Ie) 32995
— App Subscripbon

The app stores on Android and iOS are both crammed with millions of apps, and more are being released each year. There is a huge competition and Apple and Google benefit because the more apps there are, the more revenues they would collect. However, an app development company in India who is trying to feature his apps on the store would need to find innovative ways to stand out from the crowd. Monetising their customer base effectively is one of the most crucial tasks for the developers. Over the years, there have been different business models on how the apps should be monetized.

One of the best ways is to utilize a subscription model, and these apps rely on the habits of the customers. They are aligned with the needs and preferences of the users. An Android app development services would need to put better content while developing the apps in order for them to survive through subscription models. The design needs to be better, and so does the user experience.

What are the different types of subscription business models?

The subscription business model is of three types - paid, non-paid and circulation. The paid option yields the highest profits, and this is where developers like to focus on. In this paid subscription model, the customer would need to a subscription price periodically. On payment of the subscriptions yearly, monthly or seasonally, depending on the user's choice, the users would be able to gain access to the products or services partially or fully.

The price that the users have to pay is often known as the membership fee and is deducted automatically on a fixed and predetermined date from the authorized credit card or the online wallet of the user. The subscription fees can be varied depending on some factors:

  • the number of users - 
  • Personal or family subscriptions or companies

  • the type of access - 
  • Full price for premium access or the minimal amount for limited access.

The users would generally be able to unsubscribe at any point of time without any restriction. But some businesses include a penalty or switching costs in this process. This measure prevents customers from leaving the subscriptions in certain time frames.

How is the app subscription business model doing in the recent days?

One of the indications that the industry has changed in recent years is apparent from the announcement Apple made in 2016 that subscription models have been opened to the developers. So any app development company in India can now develop apps for the businesses that can be monetized easily. The apps that have successfully deployed the subscription models would be having higher user lifetime values (LTVs) than the ones that promote in-app purchases or the paid apps. The higher LTVs also help the developers to invest more resources in paid user acquisition, which drives sustained growth.

Why should companies and app developers convert to this business model?

About 78% of the subscribers, according to insights from Google, start with a free version of an app and then subscribe. The opportunity to try some apps for free mostly encourages the users to try the apps. The app development company in India uses this trick to entice new users. Having good content is necessary to make users move beyond the free trial period and subscribe. Not only that, the developers must continue providing good content. Some of the reasons according to Google which makes users subscribe to include:

  • 26% of the users like to enjoy additional content that is available only to the subscription users
  • 23% of the users took the subscription due to the availability of a discount
  • 17% of the users converted because they liked the app and wanted to continue using the app

How is it possible to make users opt for the subscription model?

  • Content drives the conversation. It is of insurmountable importance to ensure that the apps are based on an impressive content strategy. The paid subscriptions, undoubtedly, should offer better content than the free trial. Fresh and valuable content would keep the users subscribing. The content releases should also be timed well so that the users keep on getting new content consistently.
  • The users need to be reminded through campaigns that the subscription versions do not have ads. Ads irritate users, and it is obvious. If users are reminded of this plan subtly, the app development company in India can generate a fair amount of leads.
  • A remarkable strategy to sell the subscription model to the users is to offer exciting discounts. It would be a good idea to focus on users whose free trials are ending shortly. They would be the ones most interested in opting for the subscription models if they like the app.
  • The users should be made aware of the convenience of subscribing to the apps. They should be told about the additional features and tools they would be able to access through the tools. The campaigns should offer interesting options through the subscription model.
  • The free version of the app should not allow users to log in through different devices. One device should be the limit. This strategy would help you in gaining conversions. As an android app developer, you should allow the users to use the app on different devices through paid subscriptions. The developers should also let the devices sync together.

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The simple strategy to increase conversions involves telling the users about the advantages they would miss out on without subscriptions. The messages need to be delivered at the right time and just in the right way. Push notifications can be used for reminding the users by spacing out the messages.

What are the other ways to market the subscription models?

  • A good strategy could be to ask happy users to share reviews. These can be done through the app store reviews or social media platforms. Another way to do this is through the Firebase invites as these invites are recommendations and shareable in-app content that can be sent by friends or contacts through SMS or emails. They are available on Android platforms.
  • A reputable top mobile app development companies in India would have a reward program for the app subscribers who recommend the apps to others.
  • An influencer program does the job much better, where the influencers share content about the app.

How much should the monthly subscriptions charge?

The subscriptions should be priced right. They should neither be too cheap nor too costly. The prices should also depend on the category of the apps. Most subscriptions would charge from $5 to %20 per month. Apps for the categories like News, Education, Dating or Sports are priced between $5 to $20 per month, while the apps in the niche Health, Entertainment, and Music charge between $5 and $15. If the monthly fees are outside these ranges, the takers are very few. An Android app developer would test the figures before going with a final price.

The app publishers sticking to the subscription business model would generate more revenue over time. The average revenue per user can be increased by charging app users on a regular basis. However, the model works only if the developers would offer proper value.

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