Podcast Summary: Sub Club by RevenueCat

Episode: The 2025 State of Subscription Apps Report
Hosts: David Barnard, Jacob Eiting
Date: March 17, 2025

Overview

In this special episode of Sub Club, hosts David Barnard and Jacob Eiting dive deep into the key findings from RevenueCat’s mammoth “2025 State of Subscription Apps” report. They unpack the hottest trends, surprising data points, and actionable insights for app businesses navigating the rapidly evolving app subscription ecosystem. Topics span the rise and monetization of AI apps, the nuanced interplay between pricing and retention, platform differences between iOS and Android, the comeback of hybrid frameworks like React Native, and the practical realities behind building a successful app in today’s marketplace.

Key Discussion Points & Insights

1. The AI Wave: Monetization and Differentiation

[01:21–09:15]

• AI Monetization Surges

  • While AI apps don’t have notably better conversion rates than non-AI apps, their revenue per user is “significantly higher” in both one-month and one-year view ([01:37]).
  • There’s a cultural shift: “People are starting to get a little used to paying $20 a month for something on their little pocket computer...” — David [01:59]

• Where Does Value Accrue?

  • Last year, the consensus was that B2B/enterprise would win with AI. Now, "it’s actually the consumer/app layer where the differentiation and value lies." — Jacob [02:30]

• Differentiation & Distribution

  • Simply making a ChatGPT wrapper isn’t enough. Success comes from building something unique, hard to clone, and/or with strong brand or community hooks.
  • “Building the app has never been the hardest part. It’s getting attention sustainably—building a community, user base—where the rubber really meets the road.” — David [04:00]

• AI Lowers Barriers & Increases Competition

  • Tools enable “one-shotting” of simple apps, leading to more niche markets rather than overpopulation in existing verticals.
  • “It’s a very exciting time to be building apps that are AI first and doing novel things.” — Jacob [05:57]

• Distribution as Differentiation

  • Viral distribution on channels like TikTok can be a unique advantage. Influencer and community-led approaches are increasingly effective ([07:26], [09:44]).

2. App Store vs. Play Store: Revenue & Monetization Strategies

[10:25–15:18]

• iOS vs. Android Revenue Insights

  • iOS continues to massively outperform Android in total revenue generated.
  • However, "when you look at Realized LTV, people who do pay on Android pay relatively similarly to iOS payers." — David [10:25]
  • Lower payer percentage on Android, not necessarily more price sensitivity [11:27–12:15].

• Hybrid Monetization on Android

  • Success stories on Android increasingly come from hybrid monetization: combining purchases, subscriptions, consumables, and lower price points, especially in emerging markets ([13:16], [14:00]).
  • Example: Dramatically reduced prices in Brazil matched with cheap advertisements led to positive ROAS ([14:00]).

• Ad Monetization

  • Ad rates (CPMs) are much lower on Android, further encouraging low price experimentation and diverse monetization tactics.

3. React Native, Hybrid, and Native Apps: A Surprising Monetization Edge

[15:28–20:10]

• React Native Outperforms
  • Apps built with React Native show strong monetization, dispelling the indie developer “snootiness” about native vs. hybrid ([15:28], [16:17]).
  • These frameworks (React Native, Flutter, etc.) dramatically lower time to market and open app dev to wider audiences.
  • "If your differentiation is not on design polish... it's a great option.” — Jacob [16:17]
  • The rise of AI-augmented coding further advantages JavaScript/TypeScript-centric tools ([18:44]).

4. Retention Trends: The Tough Reality

[20:21–22:47]

• Downward Trend in Retention

  • Year 1 retention continues to fall year-over-year, a byproduct of more competition, easier app creation, and more money flowing into the space.
  • "You can still build good long retaining cohorts...but things get harder over time." — Jacob [20:54]

• Retention Decline Linked to Broader Funnel

  • Monetizing more ‘incremental users’ with lower intent likely leads to higher churn. “Push on one part of the funnel, it’s going to pop out in another part.” — Jacob [22:02]

5. Revenue Realities: Most Apps Earn Modest Amounts

[22:47–26:48]

• Only 5% of Apps Make $9K+/mo After 1 Year

  • “One out of 20 apps makes enough within its first year to sustain at least one person—which is pretty cool…like a lottery ticket.” — Jacob [22:58]
  • Most successful apps start as side projects; even modest revenue ($500–$1,000/mo) can make a meaningful difference for indie creators [24:50].

• Stickiness and Long-Term Growth

  • Apps that survive often do so because of founder persistence, community focus, and time—a compound growth story.

6. Hybrid Monetization & Lifetime Subscriptions

[27:08–30:54]

• Shift to Hybrid Monetization
  • More apps are combining subscriptions with consumables (credits, in-app purchases). Especially vital for AI apps with variable costs.
  • “Consumables make a ton of sense for AI... You pay a subscription for credits, then buy more as needed.” — David [28:47]
  • Lifetime subscriptions remain rare and risky except for very specific circumstances.

7. User Behavior: Trial Timing, Churn, Retention, and Usage

[31:09–44:25]

• Trial Offers: “Paywall in Onboarding is King”

  • Over 80% of trials start on Day 1—apps get “one shot” ([31:09–32:26]).
  • “Not having the paywall in onboarding is such an ‘L’... just gotta show it.” — Jacob [32:28]

• Churn Patterns

  • Over 40% of annual subscribers cancel in Month 1 after subscribing.
  • “People see the charge hit their bank account; that’s what’s really driving this.” — David [34:52]
  • Few users cancel in the final renewal month, contradicting earlier assumptions.

• Google Play Churn Surveys: Why Users Cancel

  • Top reasons: Cost and low usage (“value equation does not balance out” — Jacob [35:44]).
  • Churn is rarely about competitors; it’s about falling out of love with your app.

• Retention by Price Point

  • Lower priced apps have higher retention.
  • “Lower priced apps indeed retain better, but correlation is not causation. You could have a high price app that retains incredibly well if you deliver a ton of value.” — David [40:08]

• Active Usage at Renewal

  • Surprise finding: Many renewing users are not actively using the app within their renewal period, especially for weekly/monthly subs ([43:19]).

Notable Quotes & Memorable Moments

• On AI Monetization:

  • “The revenue per user at the end of a year, at the end of a month, is significantly higher on AI than it is the rest of the app industry.” — David [01:37]
  • “Everybody has access to Cloud 3.7, but you can bring something unique in terms of brand and translation, and that’s what’s going to drive people to convert and retain.” — Jacob [02:30]

• On Distribution:

  • “Building the app has never been the hardest part. It's getting attention sustainably—building a community, a user base—that's where the rubber really meets the road.” — David [04:00]

• Retaining Value:

  • “Most people aren’t falling in love with another app when they churn—they’re falling out of love with your app.” — Jacob [35:57]

• On Pricing & Retention:

  • “The more value per dollar you can deliver, the better that looks and feels to the customer... if you’re delivering consumer surplus, they’ll feel it’s a good deal, they’ll tell their friends.” — David [41:13]

• The Odds:

  • “One out of 20 apps makes enough within its first year to sustain at least one person... Would you buy a lottery ticket where you have a 1 in 20 chance for an annuity?” — Jacob [22:58]

• On Data-Driven Strategy:

  • “Don’t read any one data point and go change your whole strategy. Take it, read it, let it give you some things to try, some new ideas for 2025.” — Jacob [45:21]

Timestamps for Key Segments

• AI & Monetization: 01:21–09:15
• App Store vs. Play Store: 10:25–15:18
• React Native & Hybrid vs. Native: 15:28–20:10
• Retention Trends: 20:21–22:47
• Monthly Revenue Realities: 22:47–26:48
• Hybrid Monetization: 27:08–30:54
• User Behavior & Churn: 31:09–44:25
• Wrap & Strategic Advice: 45:21–48:49

Takeaways for Subscription App Builders

• AI is monetizing exceptionally well, but success requires real, non-commoditized differentiation and strong distribution.
• While iOS still dominates revenue, hybrid monetization (especially with ad-supported and micro-transaction models) is where Android apps can win.
• React Native and other cross-platform frameworks are better than ever, supported by AI tools, and do not hamper monetization.
• Retention is harder than ever, as competition intensifies and the market matures—push for deep value and engagement, not just quick conversions.
• The vast majority of apps are modest revenue earners; treat big success as a statistical outlier, but recognize side project potential.
• Trial and onboarding monetization strategies must optimize for an “all-in” conversion push on Day 1.
• Retention is closely tied to price and perceived value—don’t overcharge unless you deliver outsized value.
• Hybrid monetization models (especially for apps with real usage-based costs, like AI) are on the rise.
• Churn is about value, not competition: keep users engaged and satisfied, and price correctly for retention.
• Use data as a compass, not a map: Don’t overreact to single data points, but let broad trends guide strategy.

Related Resources

• Full Report Download: revenuecat.com/report
• Recommended Episode: Phil Carter’s Subscription Value Loop Calculator (Dec 2024) for deeper discussion on benchmarks and strategic application.

Conclusion

This episode delivers a hard-hitting, data-rich overview of the subscription app economy in 2025, giving both sobering realities and clear opportunities. For anyone looking to build or scale an app business, the insights here are invaluable—whether you’re an indie developer riffing on a side project or part of a large studio unlocking new markets and monetization models.

(All page numbers and data references are per the 2025 State of Subscription Apps Report as noted by hosts.)