Apple’s special conditions for subscriptions allegedly only provide higher developer income in practice in a few cases. Apple is reducing its commission after the first year of subscription from 30 to 15 percent, but due to the high bounce rates among subscribers, according to an analysis by an app service provider, only relatively few apps benefit from this – most of them would have to continue to pay almost 30 percent of their in-app sales cede the iPhone manufacturer.
High bounce rate for monthly subscriptions
With monthly subscriptions, an average of 13 percent of customers drop out every month, so that after twelve months only 20 percent of the original subscribers remain – and Apple only lowers the commission for these, Revenue Cat calculates, which offers special tools for delivering in-app purchases, thereby gaining a deeper insight into the business of in-app subscriptions.
Only if the subscriber pays consistently for more than a whole year does the more advantageous 85/15 split apply. If the subscription is canceled or the subscription expires for any other reason – such as an expired credit card – and the subscription is not renewed within a grace period of 60 days, Apple resets the counter. The bill applies not only to iOS and the App Store, but also to Android – at least with regard to Google’s Play Store, where the same conditions apply, as Revenue Cat notes.
Over many years, apps can slowly collect long-term subscribers and benefit from the platform provider’s reduced commission, but apparently only very few apps manage to do this: Since subscribers who have dropped out are at best replaced by new, different subscribers, the 70/30 Split and thus less stuck with the developer: Only 16 percent of the apps can achieve a share of sales of over 75 percent, writes Revenue Cat with reference to its own customers.
Special conditions only for video services
With annual subscriptions, only around half of the subscribers jump off in the first year, the service provider notes, so that providers can benefit more from the reduced Apple commission in the second year. Since annual subscriptions usually only make up a small part of the subscriptions, this often makes little difference overall. It makes sense, of course, to optimize its app to keep subscribers, is the conclusion of the provider, but developers should not do this solely with regard to the 85/15 split.
Only providers of video services receive special conditions from Apple under certain conditions: In this case, the 85/15 division applies from the first day of subscription. In addition, these app providers can also bill content via their own payment interface, so that no commission has to be paid to Apple – this is otherwise strictly forbidden.