A Quarter of Apps Make No Money At All

If only everyone learned to code, goes the argument, then everyone would have a job. If only all our college kids stopped sitting around studying anthropology and instead stimulated the economy through making the next Flappy Bird, then we'd be right as rain. The only problem is that the app stores already resemble the rest of the American economy: According to a survey of over 10,000 app developers, the money in apps is extremely concentrated at the top.

The survey, conducted by the research program Developer Economics, found that “the top 1.6 percent of developers make multiples of the other 98.4 percent combined.” Below this tiny number who are make more than $500,000 per month are the hobbyists, the dabblers, the tiny app “middle class” and the 62 percent of developers who are stuck below the app “poverty line,” making less than $500 per app per month.

An astounding 24 percent of all developers that are interested in making money make nothing at all—that would be nearly a whole quarter who are making $0 per month. Another nigh-quarter, 23 percent, of developers make less than $100 per app per month. “This level of revenue is unlikely to cover the basic costs of a desktop machine for development, test devices and an account to publish apps,” the report states. At least 69 percent of developers can't sustain full-time development at these rates.

While it would take someone who studies human behavior—if such a person exists—to truly understand what's going on, in a way the Apple and Android app stores appear to be victims of their own success. “The app stores opened up an extremely straightforward method of both distributing software directly to consumers and monetising it,” the report states. “That created a very low barrier to entry, which in turn resulted in a phenomenal amount of competition from all over the world. Today, app stores are so completely jam packed with consumer apps that an overwhelming majority of them struggle to get noticed or make any significant revenue.”

Developer Economics concludes that the extremely unprofitable life of an app developer is going to spell the end of the “there's an app for that” anarchy we've enjoyed for the last decade, especially as the people who could be making them move on to other, greener pastures. “These days, many mobile app startups look more like resumés for developers who will soon abandon their work following acqui-hire M&A deals,” Sarah Perez at TechCrunch noted.

And if those deals don't materialize, app developers can always go back to school for anthropology.