Charge Me Once, Shame On You (and Your iOS Subscription Strategy)
It was June 2016, when Apple announced that they would be rolling out subscription capabilities to all 25 app categorizes. Previously, in-app subscriptions were limited to only certain apps and industries.
Since the 2016 announcement, the quantity of subscription apps increased in the top grossing list. At my previous company, Tinybop, we were transitioning from premium apps to subscription. I noticed the push to move to subscription when I was applying in the job market. Many app companies were looking for product managers with subscription knowledge . In the end, I was hired to be the first product manager at a game studio in Milan called Colto. Colto has partnered with Highlights for Kids working to build The Highlights Hidden Pictures App. Building off a brand with extensive knowledge of publication subscription, it has been my distinct challenge to model those learnings in the digital space.
With that, I wanted to publish my personal research on iOS app subscription for any iOS companies exploring subscriptions, Whether you have an app already or are looking to make one, It helps to get some general understanding of
- What companies are charging?
- When in the “user story” are they prompting users to subscribe?
- How are they delivering their pitch?
Without further ado, here we goooo!
1. What companies are charging?
Not surprisingly, the prices ranged as much as the samples I pulled. I chose different apps from different industries to get a general understandings of how companies are linking their value to a cost.
Here is what I saw:
Observations:
- The three higher grossing apps Netflix, Spotify, and Tinder, all share similar price points that range from $8.99 to $9.99.
- The one social app, Tinder started out free presumably to gain enough user base for the platform to become available
- Tinder’s sliding scale based off price is likely to better target their ideal demographic but also to appeal to different price points users will be willing to pay (i.e. older people may be able to pay more than younger people).
Opportunities
- Consider that a ~$9.00 a month price tag will put you in competition with larger and more trusted brands
- A price model can scale around different types of users based off the type of user base you are trying to create or around the difference price points different users may have according to their needs.
- Experimenting with different types of payments such as freemium, in app purchases, etc may be more insightful than just sticking with a singular price-point plan.
- If your product isn’t well known, a strictly subscription model may be limiting. Many companies that do not produce well known and understood value are offering free trial to give users a taste before requesting a subscription.
- Price points can change by the length of the subscription.
2. Where in the “user story” are they prompting users to subscribe?
There are three main prompt approaches I’ve seen which include prompting users after they make an account, as soon as a user enters the app, and consistently throughout the users experience. In the chart below, I track which company used what approach as well as their trial length.
Here are some screenshots:
Day One prompts users when a user engages in locked content. When users make a journal entry, they are able to do so under the free plan however if you try and add more than one photo or engage any of the premium features that seem accessible to you, you are prompted with an offer screen. Additionally, it seems Day One is engaging in some A/B testing since I recently re-downloaded the app and was prompted to start a 3 day free trial that auto subscribes users to a year membership. In my experience, automatic trial to subscription is great for the company but pretty frustrating for users.
As mentioned, another approach is for companies to prompt users throughout the experience. In the New York Times app for example, users get 5 free articles but throughout your experience, you are able to see the subscription option at the top center. Youtube has a similar approach to promote Youtube Red.
Observation
- No apps have visibly locked content. Users can only see things are locked when they try and use it.
- Similarly the limits of the free experience are not emphasized until a user hits the end of their experience.
- Youtube prompts subscription after a user does something that only an engaged users might do (ex. Share a video)
- The higher the price point, the longer the trial
- If there is a login, it is more often than not before a user is prompted to subscribe.
Opportunities:
- Trial length can vary greatly between companies but it should ideally wrap around your experience, in the sense that users have to get enough taste for your product yet end the trial wanting more.
- Subscription prompt doesn’t need to be visible all the time. Most companies tuck away their subscription options, possibly to let the free trial run its course then convert users to paid.
- The subscription services I tried veered away from pop ups and constant reminders about trials.
- Prompting users to subscribe when they partake in an ideal user activity (ex. Youtube prompts when you share a video which is a clear indication that you are an engaged user)
3. How are they delivering their pitch?
We covered timing and price, but what about the way companies are laying out their offerings? In general, I saw mainly, a “Carousel” model, or a simple list. Here are some examples
“Carousel” Model:
Tinder had the most robust example of the carousel as it had more screenshots and didn’t bunch many offerings in one page. They also only put one offering
Life sum has a carousel similar to Tinder that bunches their offering into buckets .
Many companies simply listed out their offering in one page which is what I am calling the “List” Model. Here are some examples:
Observations:
- If there are different subscription options (annual vs monthly) most subscription offerings suggest one of the options as a default.
- Most offer screens offered a summary of offerings with options to read more information in another place.
- Companies with less offering might be best with the list view to make offerings look more numerous.
Opportunities:
- Many companies list out their app capabilities in words when prompting. There could be opportunity however for a less static approach to display one’s premium benefits.
- There are many A/B testing possibilities for what type of offers you want to advertise to convince a user to convert to a subscriber.
(Side note: For my projects, I have worked on offer screens and Apple has recently changed their requirements for users to have more warning of payments and requires offer screens to contain text informing users about how the payment will auto-renew and how users can cancel anytime. They have changed these requirements twice in the last 6 months and I suspect more rules around offer screens are to come in the near future.)
Overall, it seems that many companies are approaching different aspects of subscriptions with different strategies. Tinder has explored numerous subscription options and in app purchase choices, New York Times has explored numerous options with the amount of content users get that entice them to subscription, and Youtube has gotten creative about skillfully prompting users to subscribe at times when they would be more likely to. Essentially while there is no industry standard yet for most of these things, there is incredible opportunity to get creative with the price, how subscription information is presented, and when it is presented. Innovation and creativity in these fields may prove to be essential for maintaining revenue in the app store.
This article may be an on going project for me so if anyone would like to contribute or have any comments, feel free to respond below.
Special Thanks to Matt O’Hagan, Alexis Foucard, Christian Espinosa, Davide Jones, and Martina Dell’Acqua for edits.
Resource Links:
Apple: App store subscription — https://developer.apple.com/app-store/subscriptions/
Apple: Designing for Subscription Success — https://developer.apple.com/videos/play/wwdc2017/814/
Business of Apps : App Revenues 2017 — http://www.businessofapps.com/data/app-revenues/
Nieman Lab — New York Times has halved its free monthly articles to 5 — http://www.niemanlab.org/2017/12/the-new-york-times-has-halved-its-free-monthly-articles-to-5-its-most-significant-paywall-change-since-2012/
FeedDough — How does Tinder make money — https://www.feedough.com/tinder-make-money-business-model/
the verge — https://www.theverge.com/2016/6/8/11880730/apple-app-store-subscription-update-phil-schiller-interview
