Users of 16 popular iOS and Android apps claim that they would be willing to pay a monthly subscription for popular apps if there was no longer a free version.
WhatsApp was the one most users would rather pay for than give up, while YouTube was the app for which they’d be willing to pay the highest subscription fee…
The McGuffin survey of 2,000 consumers found that a massive 89% of WhatsApp users would pay a monthly subscription if the messaging service were no longer available for free. The average amount users said they’d be willing to pay was $2.38/month.
When it comes to the amount people would be willing to pay, YouTube topped the rankings. The top five by value were:
- YouTube (72%): $4.20
- Google Maps (78%): $3.48
- Google Drive (79%): $3.31/month
- Facebook (64%): $2.92/month
- LinkedIn (79%): $2.84/month
Apple’s FaceTime app took sixth place in the ranking. Some 79% of users would pay a monthly subscription, with an average value of $2.78/month.
McGuffin then did some sums to see what the theoretical value of these subscriptions would be to the companies concerned.
Once we gathered data showing what consumers would pay for various apps, we were eager to compare each company’s current advertising revenue against what they would hypothetically earn if they charged the percentage of users willing to pay the average amount respondents established per app.
To establish revenue projections, we used the latest publicly available data from each company, with regard to annual ad-based revenue and number of active monthly users (sources available upon request). Then we created an adjusted projection of monthly users per platform, based on what percentage of our respondents said they would not pay anything for a given app. With that new number of users, we multiplied by the average monthly fee established by our respondents, then by 12 months, to establish projected annual revenue.
They then showed which apps would, in theory, make the greatest percentage gains by switching from ads to subscriptions.
Of course, the big problem with any calculation of this kind is the often vast chasm between what people say they would be willing to pay, and what they would pay in reality. Especially once you start multiplying those relatively modest monthly fees by the total number of apps people use on a regular basis.
It’s exactly the same as websites being funded by subscriptions rather than ads. Ask users if they would be willing to pay a few dollars a month instead of seeing ads, and they vast majority will say yes. But as soon as they realize the total cost for the websites they visit regularly in the course of a month would add up to $100-$200, it’s a different equation.
For most consumer apps and websites alike, subscriptions are unlikely to replace ads anytime soon.
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