The 2025 State of Subscription Apps Report
On the podcast, I talk with Jacob Eiting about how AI is transforming both what apps do and how they’re built, the link between price and retention, and why React Native apps often monetize better than native.Check out RevenueCat’s State of Subscription Apps 2025 report here: https://revenuecat.com/reportTop Takeaways:📊 AI apps: Higher revenue per user, but differentiation is keyAI-powered apps don’t convert users at a higher rate, but they earn more per subscriber. People are willing to pay for AI-enhanced features, but success depends on offering real value - simply wrapping a chatbot isn’t enough. The best-performing AI apps focus on unique, high-value use cases.💰 Hybrid monetization is gaining momentumMore apps are mixing revenue models—offering subscriptions, consumables, and lifetime purchases to appeal to different types of buyers. AI-powered apps, in particular, are finding success with credit-based systems that let heavy users pay more without forcing everyone onto a subscription.⚡ Most subscription churn happens in the first month—act fastA huge percentage of cancellations happen right after the first charge. Users need to feel the value of your app immediately, or they’ll turn off auto-renew. Strong onboarding, personalized engagement, and proactive retention strategies make all the difference.⏳ 80% of trial starts happen on day one - don’t bury your paywallUsers decide quickly. The vast majority of free trials begin the first time someone opens the app, and if they don’t start one then, they likely never will. A clear, compelling paywall in onboarding is essential to maximizing conversions.📉 Lower prices mean higher retentionApps with lower subscription prices retain users at significantly higher rates. High-ticket subscriptions can work if the value is obvious, but in many cases, a lower price makes the renewal decision much easier. If churn is a problem, pricing strategy should be one of the first things to review.About Jacob Eiting: 👨💻 Founder & CEO of RevenueCat, the platform powering in-app subscriptions for thousands of apps.🎯 Jacob helps app developers navigate pricing, retention, and monetization strategies to build sustainable businesses.💡 “If your differentiation is community, if your differentiation is distribution, like you have some unique angle, you’re serving a niche, and you want to be on both platforms, React is probably a really good place to start today.”👋 LinkedInFollow us on X: David Barnard - @drbarnardJacob Eiting - @jeitingRevenueCat - @RevenueCatSubClub - @SubClubHQEpisode Highlights:[1:10] The power of AI: AI apps don’t convert users at a higher rate, but they do generate more revenue per user.[12:28] Battle of the app stores: The App Store generates more money than the Play Store because there are more iOS users (not because Android users pay less).[18:20] Hybrid vs native: A wider range of development frameworks is lowering the barrier to entry for app developers.[24:12] Downward slide: Retention rates are declining year over year (but that’s to be expected).[26:51] Failure to launch?: One out of every 20 apps makes more than $9,000/month one year after launching.[34:37] Diversifying revenue: More apps are experimenting with hybrid monetization strategies, combining monthly subscriptions with consumables and lifetime subscriptions.[39:53] Press start: 80% of free trials start the day users first open the app.[42:13] End of the line: Cancellations of annual subscriptions happen most commonly in the first and last month.[45:12] The price isn’t right: Lower-priced apps retain users better than higher-priced apps.[54:20] Last touch: Active renewal rates are highest for annual subscriptions and lowest for weekly subscriptions.
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