App monetization strategiesApp publishers and developers have several possible strategies available when it comes to generating revenues from their audience interactions. Freemium models allow users to unlock all the features of an app after paying a single or recurring premium but grant access to basic functionalities for free. In the United States, while revenues generated by recurring subscription payments have been increasing, one-time or lifetime subscriptions still hold their share in major industry verticals. In recent years, app developers have increasingly paid attention to users’ experience, and new in-app advertising methods reflect this aspect. Playable ads and rewarded videos expose users to advertising in a more entertaining way, while still allowing developers to monetize via in-app ads.
App stores commission rates under scrutinyAs of July 2022, the standard commission rates on revenues generated from apps hosted on the Apple App Store and the Google Play Store were set at 30 percent. However, between the end of 2020 and mid-2021, both Apple and Google were forced to address the criticism of their app store policies. In 2020, the European Union drafted the Digital Market Act, with the purpose of ensuring a healthy degree of competition in the tech environment. In August 2021, the United States Senate presented the Open Apps Market Act to reduce tech giants ‘control over the digital app market. In the same month, South Korea amended the Telecommunication Business Act, which will allow app developers to use third-party in-app payment methods. The latest news report that an antitrust case against Apple has been presented to the Competition Commission of India.
In 2026, mobile app spending is forecasted to reach 161 billion U.S. dollars and 72 billion U.S. dollars on the Apple App Store and the Google Play Store, respectively. While both Google and Apple started applying some changes in their app store policies in 2021, like lowering commission fees for small publishers generating less than 1 million U.S. dollars in yearly revenues, the two tech giants might face additional restrictions and limitations in all their major markets. In the case of Apple, the latest developments have seen the company finally allowing some app developers to redirect users to external websites for transactions.