Content owners set to benefit from App Store shift

Apple’s App Store will reach nearly $30 billion in annual revenue by 2021, a Strategy Analytics report predicts (click image to enlarge), with content players benefiting from a growth in subscription services.

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By the end of the forecast period, the iOS  company will have paid out more than $140 billion to app developers.

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Currently, 80 per cent of revenue is made by virtual goods and in-app purchases, with game companies dominating.

In the future, content owners such as Netflix, Hulu and Spotify will see “exponential revenue growth” fueled by in-app subscription sign-ups.

In many emerging markets, users will have access to such services for the first time through their Apple devices, the report noted, adding that when Netflix recently allowed in-app sign-up for its service, it climbed the ranks of the highest grossing entertainment apps in more than 20 countries.

Joshua Martin, chief evangelist of apps research for Strategy Analytics, explained that “the ascent of Netflix to the top within days is a testament to the power of apps and iOS. Simply by enabling a feature Netflix found a new universe of users”.

“The stickiness of subscription services such as Netflix will see content owners sit atop the highest grossing entertainment apps and, in the long term, amongst the highest grossing apps overall globally,” he added.

Martin also said that “in-app purchase will still drive billions in revenue each year, but the growth of subscription and consolidation among key players is a key trend that will drive future growth for the App Store, Apple, and content owners”.

New devices such as Apple TV and the Apple Watch will account for a small percentage of downloads but will extend app capabilities.

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