The app economy is maturing, opening up opportunities for a growing middle-class of app developers and companies to make it big. This is the key finding of The Millionaires Index, a research “snapshot” released as the first phase of a new research program spearheaded by Pollen VC (https://pollen.vc/#/), a FinTech company giving developers quicker access to their app store revenues, together with Priori Data (www.prioridata.com), a data-driven mobile app store intelligence company.
The Index reveals that a total of 1,887 app developers and companies have already generated $1 million in revenues from a mix of app purchases and in-app purchases in the last 12 months. The research draws on recent app store data and a review of “ranked”’ apps, defined as apps that have been listed among the top grossing apps in the Apple App Store and Google Play to track growth in the number of Long Tail app developers and map their monthly revenues. Key findings include:
° Games continue to be the leading app category, with 78 percent of app developer millionaires achieving their revenues from creating and marketing gaming apps.
° Nearly half (45 percent) of app store revenues — or $2.3 billion — will have been generated by apps and games outside the Top 100 ranked apps in 2015.
° A healthy long tail of app developers exists with a total of 75,129 developers making more than $10,000 per year from their apps.
Significantly, the research program findings run counter to popular app developer surveys from market analysis and strategy firm VisionMobile that suggest over 60 percent of developers (52 percent) live under the so-called ‘app poverty line’, or make less than $500 per app per month. According to the Pollen VC / Priori Data “snapshot,” however, over 20,000 app developers and companies will have made over $100,000 in revenues — or $8,333 per month — from their apps in 2015. Overall, some 120,000 app developers will be earning well above the poverty line of $6,000 revenues per year.
Thus, the popular assumption that total revenues are unsustainable for the vast majority of app developers is questionable. Data soon to be released by MiDIA Research (www.midiaresearch.com), a market research and analysis firm focused on digital media content and the App Economy, forecasts a significant rise in revenues for app developers, revealing that the average developer revenue per app will increase by 24.5 percent by 2020.
Karol Severin, MiDIA Research associate analyst, observes that two major platforms are responsible for much of this growth, while others, such as Microsoft Windows Phone, lose steam.
“Android and Apple iOS will drive the growth at 46.8 percent and 19.9 percent respectively,” Severin explains. “There are two key takeaways from these findings: First, iOS and Android are the platforms where the real money is for app developers. Second, other platforms are less saturated with developers and apps, potentially providing better chances of discoverability and ‘survivability’.”
“The research snapshot highlights the emergence of middle-class app and game de-velopers,” adds Martin Macmillan, Pollen VC CEO. “It’s great news for smaller app developer companies and underlines the health of the wider app ecosystem — provided companies have the right understanding of user acquisition and a sound monetization strategy, as well as the right funding strategy in place to achieve success.”
Recognizing that cash flow is a key pain point, Pollen VC accelerates access to earned revenues, thus empowering app developers to build their companies on their terms, rather than wait the lag time between making a sale or clinching an in-app purchase and getting paid by the app stores – which can be up to 60 days, or more, Macmillan explains.
The Millionaire Index shows that “app developers are doing business in an environment which is witnessing growth from all sides,” observes Patrick Kane, Priori Data CEO. “The starting point is, of course, the mobile consumer, and this drives growth and interest from investors, advertisers, suppliers – everyone throughout the mobile value chain.”
It’s a dynamic that ultimately turns up the competitive pressures on app developers to use the tools and services available to them to make smarter, more informed business decisions. “
Opportunities for smaller app developers are growing, but every cycle brings smarter, more experienced, and better funded developers trying to tap into this growth. Therefore, app developers must harness business intelligence to stay ahead of the curve,” Kane concludes.