The world of entertainment apps, especially in streaming, is constantly evolving, reflecting significant changes in consumer habits and market dynamics. Since the 2020 pandemic, the streaming sector has emerged as one of the big winners of this digital transformation. And it has seen notable growth in revenue and user base.
Appfigures’ recent report reveals impressive numbers that highlight the central role of streaming services in the app economy. This illustrates the growing importance of these services in consumers’ daily lives and in the technology market.
Streaming App Growth and Revenue
The Appfigures report shows that entertainment apps reached a total of US$3.8 billion in spending in the first quarter of 2024. Of this, US$2.1 billion was invested in streaming apps, highlighting the dominance of this sector over the digital entertainment market. Compared to the first quarter of 2019, before the pandemic, spending on streaming apps increased by an impressive 383%. This growth is a direct reflection of the growing demand for digital content. And it is fueled by changes in consumer behaviors and the increase in time spent on entertainment at home.
Within this sector, music streaming apps also saw significant growth, with revenues growing by 191% in the same period. On the other hand, short-form video apps such as TikTok saw extraordinary growth of over 1500%. This increase is mainly attributed to users spending virtual currencies to reward live content creators. This shows how direct interaction and engagement influence revenues in the digital entertainment sector.
It’s important to note that these figures only reflect mobile payments and do not include revenue from subscriptions made via smart TVs or the web. This is relevant for companies like Netflix, which have chosen to avoid app store fees. And it could influence the financial data they report.
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Impact of Monetization Strategy and Market Dispute
Netflix’s approach to avoiding paying app store fees by disabling the iOS app subscription option has resulted in reduced overall gross revenue from these platforms. In Q1 2024, Netflix only grossed $67 million from the App Store, which is less than Crunchyroll’s revenue of over $130 million, despite Netflix being the most downloaded streaming app on the App Store during the same period.
This contrast highlights a growing disparity between the popularity of downloads and revenues obtained through app stores. Although Netflix continues to lead in terms of downloads, its monetization strategy outside of app stores affects its financial performance on these platforms. In contrast, smaller services such as Crunchyroll, which have not adopted a similar strategy, are able to stand out in terms of revenue, taking advantage of app store fees to maximize their revenues.
These data highlight a growing dilemma in the streaming market: the struggle between download popularity and actual revenue generated through different channels. Companies need to balance their monetization strategies with app store practices to optimize their financial results, reflecting intense competition and a rapidly evolving market.
Panorama shows robust sector
The current streaming app landscape shows a robust and growing industry with significant investment and strong revenue growth. Analysis of Appfigures’ data demonstrates the substantial influence of these services on the digital entertainment market, highlighting both the growing importance of streaming apps and the complex monetization dynamics that shape the industry.
The strategies adopted by companies like Netflix and Crunchyroll illustrate the different approaches to maximizing revenue and market impact. While some companies choose to avoid app store fees, others leverage these platforms to boost their revenue. As the industry continues to evolve, these strategies and the balance between popularity and revenue will be key to determining companies’ success in the competitive digital entertainment market.
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