Subscription apps like Netflix or Spotify net billions in App Store and Google Play revenue increase

Back in the Q4 2015, the App Store netted $3.4 billion in revenue from non-gaming apps, while Google Play made out with $1.8 billion. Fast forward a year, and there is now a whopping 67% increase in App Store revenue for Apple, to the tune of $5.4 billion made from non-gaming apps alone in Q4 2016. Google's revenue growth year-on-year is even more spectacular on a percentage basis - 82% to $3.3 billion.

What's behind that unprecedented increase in non-gaming revenues for the two most popular application stores? Well, the giant increase in music and video streaming subscriptions, of course. Both Spotify and Netflix are increasing their user bases significantly by using the App Store and Google Play as subscription vehicles, and that is why they are easily digesting Apple and Google's 30% (or 15% if you hold the subscription for a year) cut from the fee pie. Back in December, after it announced offline downloads for select shows and movies, Netflix became the top-grossing iOS app, as a harbinger of things to come.

Thus, those two media streamers currently occupy the top spots as App Store revenue generators outside of the gaming universe, followed by other subscription services like Pandora, HBO NOW, Tinder or Hulu. The Play Store differs somewhat, as Spotify is missing from the top ten there, but Pandora, Tinder and HBO NOW are still in the top five. Love it or leave it, this symbiosis proves to be a win-win-win scenario for all three parties involved - the subscription services like the unprecedented exposure they get on iPhones and Androids, the users love the subbing simplicity, while the app stores are laughing all the way to the bank.



1. RebelwithoutaClue unregistered

I wonder how many Spotify & Netflix users on Android pay for their subscription outside the Playstore.

2. tedkord

Posts: 17357; Member since: Jun 17, 2009

I do. Netflix should profit from their work, not Google. Netflix not only gives me access to past TV shows and movies, they also offer some top rate original programming, more than any of the broadcast networks. I don't have Spotify, my music sub is Play Music. Google makes money from me there.

4. RebelwithoutaClue unregistered

Was surprised to see Netflix missing on the Playstore top list. I myself pay directly to Netflix too mainly because they support a certain payment type in my country that Google (or Apple for that matter) doesn't support.

3. cmdacos

Posts: 4208; Member since: Nov 01, 2016

Just the smart ones :)

6. Back_from_beyond

Posts: 1421; Member since: Sep 04, 2015

I pay for both outside of the Play Store. On iOS I believe you have no other choice but to go through the App Store as Apple forbids apps to have the option of paying through the app itself or a subscription login that isnt connected to the App Store. One way of guaranteeing Apple sees a piece of the pie, but one that annoys certain parties out there, including Spotify.

7. RebelwithoutaClue unregistered

It's not allowed to get a subscription inside the app that doesn't use the Appstore. But I do think you are allowed to get a subscription outside the Appstore in itself (it's illegal to forbid this). But I do believe the subscription fee outside the Appstore can't be lower than the fee in the Appstore.

5. airoid

Posts: 128; Member since: Dec 13, 2016

Sheeps still prefer Spotify hmm

9. Tziggy14

Posts: 624; Member since: Sep 02, 2014

If you actually tried Spotify, it's algorithm, simplify of UI layout, and music discovery is second to none. Even over Apple Music.

8. nothingmuch

Posts: 201; Member since: May 03, 2013

I dropped Netflix in favor way more variety of new movies and new tv shows!

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