App Spending Continued To Increase In 2016

While it is true that mobile users based in the United States spent more dollars than ever on iPhone mobile apps last year, one category has significantly stood out in 2016 -- Entertainment apps. Indeed, consumer spending on entertainment has increased by a whopping 130 percent year over year, according to a new report published by Sensor Tower. 

Entertainment apps include familiar titles like Netflix, Hulu, and HBO Now, just to name a few, and the increase in their usage is further proof that more and more consumers are doing away with traditional TV services in favor of streaming TV. And it bears noting that in 2016, some of the biggest earning mobile apps were from the entertainment category. 

For instance, the HBO NOW has seen growth of more than a couple of million subscribers last year, more than doubling its user base in 2015. Meanwhile, Netflix also enjoy an improvement in customer numbers. Since it introduced an in-app subscription back in the latter part of 2015, the app has contributed an estimated $7.9 million in gross revenue in Q4 2015, and that number has since increased to over $58 million by the final quarter of 2016.

In other iOS app categories, subscription services also registered some considerable growth. Take the Photo & Video category, for instance -- helped by the growing popularity of YouTube Red (the subscription service from YouTube), the revenue per active iPhone of the category increased from $0.30 to $0.70 from 2015 to 2016. As expected, the Social Networking category continued to register growth, increasing from $1.80 to $2.00. One of the top earning apps leading in this category is Tinder, the popular dating app that launched its subscription offering in the early part of 2015. Meanwhile, due to the strength of the brands of Spotify and Pandora, the Music category increased from $3.40 to $3.60. Unsurprisingly, the category that contributes most to the App Store’s earnings is the Games category. Last year, over 80 percent of the US App Store revenues came from game apps.

Overall, owners of iPhone devices who are based in America spent an average of $27 per devices on games in 2016, improving upon the $25 posted the previous year. And while it is true that app spending has increased in the Games category, the number of games installed per device has decreased from 10.5 in 2015 to 9.9 in 2016. This suggests that mobile users are spending more money in fewer game titles, which could be due to the Pokemon Go phenomenon.