Get the latest news straight to your inbox.
Register for the Telecoms.com newsletter here.
January 14, 2020
The older characters in the room might not get the appeal of small(est) screen entertainment, but the app economy is real and generating some serious revenues today.
Although gaming is the most obvious segment of the app economy to act as the poster boy, apps are now spanning the breadth and depths of our daily lives. From healthcare to banking and messaging to shopping, if you can think of it, there is probably an app for it.
With 2019 now firmly in the rear-view mirror, Sensor Tower has completed its analysis of the final quarter and the biggest stories over the course of the 12 months. And starting with the top-line figures, the app economy is booming.
Across the 12 months, Sensor Tower estimates there were a total of 114.9 billion app downloads, a 9.1% year-on-year increase, with Apple’s App Store collecting 30.6 billion at 2.7% growth and the Google Play Store at 84.3 billion with growth rate of 11.7%.
Looking at the breakdown of where users are most interested, three areas dominate as most would have expected. Social media, in which we are going to include the messaging applications, video and gaming.
WhatsApp once again claims the title of most downloaded application throughout the year, though TikTok has completed a whirlwind year by claiming second place. While it is undoubtedly a popular application, there has been plenty of negative press to dissuade people from downloading.
In October, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer requested a national security investigation into the app, while the US Army and Navy both banned the use of the device on government-owned devices. To make matters worse, TikTok then had to announce it had fixed a vulnerability which allowed hackers to manipulate user data and reveal personal information.
While all of these incidents tarnish the reputation of the app, it wasn’t enough to stop users downloading. Even for the final quarter, the period where TikTok’s credibility came under the spotlight, it was the second-most downloaded application on the App Store and the third most popular on the Google Play Store.
Another remarkable statistic is India accounted for 45% of the total downloads, while Brazil was the second largest market for TikTok. Revenues for the app are already on the increase, there was a 700% sequential increase for the final quarter, but the remarkable popularity in two of the worlds most attractive developing markets will make this app a very interesting proposition for marketers moving forward.
Looking at the gaming section, Call of Duty publisher Activision demonstrated it is possible to successful take a game from traditional gaming consoles onto mobile. The game led downloads during the final quarter worldwide with 30 million downloads in the US and almost 50 million in Europe.
Gaming will always be the poster boy of the app economy, perhaps because it is the most obvious way revenues are generated through apps. What will be interesting to see over the next couple of months is how many of the traditional gaming titles, those which were designed for gaming consoles, are buoyed by the success of Call of Duty and attempt to crossover.
The final area worth noting from the report is the continued success of video content on mobile, most notably, Disney+.
While there are still questions about the depth of the content library, it cannot compete with the Netflix breadth and depth, the Disney brand and the current assets have produced excellent results after the launch in the fourth quarter. The Disney brand is one of the strongest worldwide therefore there was always going to be good uptake, though it needs to capitalise on this momentum, investing heavily in diversified content, if it is to be a genuine threat to Netflix.
Looking at the downloads, it was the most popular app to be downloaded in the US with 30 million, taking in more than $50 million in revenue in the first 30 days. In Q4, Disney+ accounted for 34% of video content downloads, with Netflix and YouTube tied for second on 11%.
This success was also translated into the revenue share. Sensor Tower estimates Disney claimed 16% of the total revenues across the quarter, just leading Netflix which claimed a 15% share. What should be noted however, Netflix has shifted payment from the app stores and onto online channels.
However, one swallow does not a summer make. We suspect numerous subscribers were downloading the app out of curiosity, therefore a much more telling picture of Disney will be in 12 months’ time. Unless the current content assets are supported by new, and varied, titles, we suspect churn might be considerable. Netflix is still content king for the moment, but Disney could not have gotten off to a better start in its challenge.
You May Also Like