Avoiding the App Store Is Becoming a Trend
Generating revenue from paid apps, in-app purchases, and app subscriptions is lucrative for the app store and app developer. But it’s important for app developers to control costs and foster their communities if they want to sustain profitable apps. Unfortunately, developers often face the challenge of achieving this as many rely on top app stores, such as Google Play and Apple’s App Store, to handle all their transactions, which, ultimately, eats into their bottom line profits. But today’s big names are starting to avoid app stores, and for good reason. Here’s why:
App stores typically take up 15 to 30 percent of the profit from apps. That’s why developers and brands for popular mobile apps, such as Spotify, Netflix and Epic Games, are circumventing major app stores. They are doing this by bypassing the app store’s payment portal and not allowing their users to pay or sign up via the app stores. Instead, the apps prompt new users to pay directly via a mobile version of the developer’s or brand’s site.
By having users pay directly, developers avoid paying the revenue fee for selling on the app store. This has become a cost-effective way for major app developers to generate revenue. Spotify helped set this trend by ending the ability to sign up for a new Spotify account via Apple’s iTunes. Instead, the popular music streaming app requires new users to go directly to Spotify’s site to sign up for its service. This helps the company save on the 30 percent fee and allocating that revenue to cover other expenses, such as operational or marketing costs.
It Facilitates Direct Relationships With Users
Direct relationships are important for building a community of users and advocates for the developer’s brand. They help you to strengthen relationships with customers and build a loyal following. You get to manage your community directly and control how to handle issues and poor reviews. However, this isn’t always the case when using an app store to distribute apps. This helps explain one of game developer company Epic’s primary reasons for bypassing releasing Fortnite on Android. The company’s goal was to have a direct relationship with the users of the app. This action helps Epic have a direct relationship with all its customers and not have a third party in the middle.
It Provides a Way to Directly Bill Customers
Expenses, such as marketing and operational costs, take away from developers’ profit margins. Because developers are sensitive to the app revenue fees, it’s often a goal for developers to find ways to reduce or eliminate these costs. One way to get this done is via direct billing. Being able to directly bill customers gives developers more opportunities to get the full profit of their apps. As one of the most used apps in Apple’s App store, Netflix started “testing” redirecting its users to its mobile site to sign up for accounts or enter payments. With this method, Netflix has a clearer understanding of how many people are signed up to pay monthly and can better predict its revenue margins.
Fostering Engagement for the Future
From Netflix to Spotify, major players in popular app stores are taking steps to bypass app stores as a way to absorb complete revenue, directly bill customers and foster their community of users by building a direct relationship with their customers. Building a direct relationship with the customers is essential for fostering engagement for the future and creating an authentic interaction with your users. But it’s also important to keep users returning to use your app. At YouAppi, we help brands get this done. Whether it’s dynamic ads or increasing touch points, we help brands drive re-engagement using AI-powered technology that helps developers boost sign-ups and registrations and keep its users coming back.