Mobile media revenues to pass $90bn in 2018
IHS forecasts that total revenues from mobile media and advertising will pass $90 billion in 2018, up from $53 billion in 2014.
In a new report, IHS says mobile advertising will become the leading mobile business model, overtaking paid content revenues in 2015. In-app purchases will remain the primary revenue stream for app developers as mobile search stays higher than mobile display advertising revenues.
The report also finds that Amazon has the most highly monetised user-base generating over $350 revenue per year from each of its active customers, but with more than 30 times higher profit per user Apple’s profitability dwarfs all others in the mobile industry. Currently, Japan is the most successful mobile content market with average mobile content revenues of $40 per subscriber in 2013 compared with $21 in South Korea, $15 in the US and $12 in the UK.
Wearable devices are a new focus for mobile app developers, with Health & Fitness and notification services attracting most interest so far. However, the report says many of these apps remain too focused on one-off payments and need to a find a way to create sustained revenues from users through subscription and service based models; Health and Fitness apps took only around 1% of top UK app store revenues in Q1 2014, but accounted for 6% of the leading paid downloads.
IHS has analysed the total mobile content spend of mobile subscribers in a number of major markets – looking at music, video, apps and games – and also compared how leading companies in the mobile ecosystem monetise their users. It found that games and driven freemium in-app revenues continue to be the standout category for overall app store revenues. Virtual currencies are driving games freemium success; accounting for more the 70% of the top US in-app purchases in Q1 2014. But outside games, subscription models are often the best route to monetisation with dating and music apps among the most successful.