App Annie forecasts rapid rise of video apps and subscription app model for 2020

Global consumer spending in Apple’s App Store and Google’s Play store is predicted to hit $105 billion in 2020 driven by subscriptions, according to an App Annie forecast shared with BusinessofApps.com.

The rapid growth follows a successful 2019 during which consumer spending rose 20% year-over-year.

Global mobile ad spending is forecast to reach a whopping $240 billion in 2020, up from $190 in 2019.

App Annie’s predictions for 2020 include five key areas of growth. Let’s take a closer look at each of them.

  1. Consumers will spend 674 billion hours with entertainment and video apps

YouTube and Netflix have made it easier to consume long-form video on mobile devices as the hardware is becoming a popular streaming option. And the recent success of Disney Plus adding 1 million subscribers before it even launched, shows that there’s scope for more and viewers are hungry for mobile content.

At the same time, popular video apps like TikTok and Twitch are making it easier for users to create and share their own videos online. TikTok users in the US spent $23.1 million in the app since 2018.

  1. Subscription models drive revenue for publishers

In the last 12 months ending September 2019, more than 95% of the top-grossing 100 non-gaming apps offered subscription services. Subscriptions allow customers to gain access to more content and Gen Z is keen to join.

Games haven’t exploited the model just yet but are expected to pick up pace as Apple Arcade and Google Play Pass gain users. Global spending on games is expected to reach $75 billion in 2020.

“These subscription services will work particularly well for families. A curated environment where everything is included for one flat price will be a draw for parents looking to reduce their children’s requests for in-app-purchases. There is also potential for this to resonate with those who already identify as gamers by providing continuous access to innovative, well-designed games for one price,” writes App Annie.

  1. Gamers will benefit from 5G roll-out

As multi-player mobile games are gaining interest (e.g. Call of Duty: Mobile was a top-ranking game on iOS and Google Play during its release), the demand for faster networks and lower latency is growing.

By 2024, Ericsson expects 34% of mobile traffic worldwide to come from 5G. Gamers are likely to be early adopters of the technology.

  1. Auto battler games are gaining fans

App Annie also predicts that the Auto Battler games genre is poised for growth in 2020 as eSports developers are tuning in. Developers such as  Dota Underlords (Valve), Auto Chess:Origin (Dragonest Game/Drodo) and Chess Rush (Tencent) have already launched popular games within the genre.

  1. The rise of the progressive web app 

Progressive web apps are mobile websites that look and feel like apps. They offer an enhanced user experience with faster loading times which is likely to boost their adoption in 2020. That’s particularly valuable for countries where network speed is still slow. For example, Facebook Lite was responsible for 90% of India’s Facebook downloads in the first half of 2019.

According to Trivago, engagement rates rose 150% thanks to progressive web apps.