Lesson 3

The App Stores: Charges and Revenue Splits

Monetization starts in the app store. Whether it’s the iOS App Store, Google Play, a third-party Android store or another store like Windows, these app stores are the first step in your monetization journey.

These stores are more than download portals for your app. The fact is your relationship with them can extend far past the initial point of download.

Many first time app publishers are surprised to learn that, depending on what kind of app they have, the app stores may take a cut of their revenue for the lifetime of their app. Therefore, you need to know how revenue shares work before taking the leap to launching your app.

Let’s take a look at the breakdown.

To get your app in the stores (start up costs and annual charges):

  • iOS App Store: $99 per year for an unlimited number of apps
  • Google Play: $25 one-time fee for an unlimited number of apps

For each purchase of your app the stores will take:

  • iOS App Store: 30%
  • Google Play: 30%

After download, the stores will take a percentage of in-app purchases:

For subscriptions, stores take different percentages:

  • iOS App Store: 30% first year, 15% if the subscriber remains past twelve months
  • Google Play: 15%

* You should also be aware of tax charges and implications.

In-App Purchases Have Their Own Rules

The percentage of revenue you will pay as part of any in-app purchase depends on the type of product and/or service you provide.

While the lines can get blurry, generally speaking, if it’s a digital product, such as extra content or game characters, the app stores take a portion of that sale. In contrast, revenue from physical goods, such as a shirt sold through the Amazon app, or a service, like a ride on Uber, is exempt from app store revenue shares.

A Note About Third-Party Android App Stores

The iOS App Store and Google Play generate the majority of app revenue, but there are other stores where it is possible to earn revenue.

Particularly for more globally-oriented businesses, it’s worth learning about markets where the store dynamic is more fractured among multiple players. That way they can strategize to meet audiences that frequent an array of third-party Android stores.

Keep Learning

That's the end of our Academy curriculum for now. Check back as we're always working on adding new lessons, and look through Discover, Strategize, Acquire and Engage for more app strategy.

Next LessonPrevious Lesson