The Good, the Bad and the Ugly in Mobile App Subscriptions

Mobile App Subscriptions — Part I

For easy navigation, I separated my random subscription insights into three. This first part gives a taste of the many challenges of mobile app subscriptions which we’ll try to overcome with tips in the second part. The third part is about why recent dramatic changes in mobile app subscriptions might change everything.

The insights are based on our experience at JoyTunes, creating the top piano learning app and service. I’m hoping this will be relevant these days as a new wave of apps are adding the subscription model (the reason for that is covered in Part III), sadly some of which are becoming the target of not-exactly-flattering remarks because of it (not mentioning any names…).

The Bad

Well, the bad is pretty straightforward. People don’t like subscriptions. We’re all very cautious with ongoing payments that are easy to forget and can amount to a ridiculous sum over time. That’s common to all subscription services and important to remember when considering this model.

The Ugly

Subscriptions are feared in general. Sadly, the fear of subscriptions is an order of magnitude worse on mobile.

Why is that? Well, for one thing users are used to free, or almost free, amazing experiences. Heck, you practically expect a $5 app to project holograms and never have any apparent issue otherwise you’ll give it a 1-star-I-can’t-believe-I-paid-for-this-shitty-app review to warn others.

Moreover, people are suspicious of mobile subscriptions because it’s not clear how they work. In fact, we defined a category of support tickets of users asking to cancel “just to know how” and have many others that just don’t understand the device subscription management. This also means you have fewer “forgetful” subscribers because the users are very aware of the price they pay and when the renewal happens.

Another angle to the unfamiliarity of mobile app subscriptions is that developers don’t understand it that much as well. More importantly, while the tools and management options are getting better, they’re still hugely inferior to those available in web services. Basically, at least in Apple’s case, the subscriptions are managed by Apple. This simplifies things but also takes away the control. For example, you don’t know when someone canceled until the end of the subscription duration.

Last, apps are considered as “nuggets” of content/usage, even when that’s not the case. Users often think of apps as having a small, well defined and contained value which is contradictory to the ongoing subscription model. This latter point is probably not that different from the difficulty of moving customers from paid software to SAAS some years back.

Finally, The Good

So much for the ugly sides. Where’s the good you ask? The good part is the trend. The mobile subscriptions offered by Spotify, Apple Music, Netflix and some other giants are a great start in market education but they’re not enough by themselves. With recent announcements made by Apple and Google (see Part III), more and more devs are rolling out subscription services. This trend, along with subscription management improvements being made, will hopefully go a long way in reducing the levels of dramatic fear to a more manageable level of healthy general caution that is common in web-based services.

A working subscription model often means great returns in average revenue per user (ARPU) which is too often meager in the micro-payments ecosystem of the mobile app stores. It also means a commitment to create long lasting value to users. Clearly a win-win if you can only make it work…

So how do you go about adding subscriptions to your great app? See Part II for useful tips, or Part III to get a glimpse into recent industry changes.