Jacob and David break down the subscription app playbook for 2025

It’s that time of year again! The 2025 State of Subscription Apps Report is here. As always, the report is full of actionable insights about today’s subscription app landscape to help developers understand what’s going on in the industry and make informed decisions about their app’s features, pricing, and retention strategies.

On this week’s episode of the Sub Club podcast, our very own Jacob and David break down the biggest insights from this year’s report.

AI: Not just a buzzword

This year’s report showed that although AI-powered apps don’t convert any better than other apps, they do generate more revenue per subscriber. This points to a trend of users being willing to pay more for AI-powered features. But this isn’t necessarily an easy win (you can’t just slap AI onto an app and expect a hit). As David points out, “I think that the differentiation piece is key, though, because anybody can vibe-code a ChatGPT rapper.” Real success comes from building something unique and valuable that keeps users engaged in the long term. “There’s a million apps on the app store,” Jacob said. “Building the app has never been the hardest part. Getting attention sustainably, building a community, building up a user base… that’s where the rubber really meets the road.”

The best of all worlds

Another interesting finding in this year’s report is that more apps are using hybrid monetization models to appeal to a variety of potential customers and maximize revenue. Instead of only offering monthly and annual subscriptions, many apps now also offer consumable purchases (like Tinder’s “Super Likes”) and the option to purchase a lifetime subscription. In particular, consumables may start to play a bigger role in AI apps, where, as David points out, “a small number of users can create outsized cost and kill your margins.” The solution to this might be subsidizing high operating costs with one-time-use credits, which require heavy users to pay extra beyond a certain usage point. According to Jacob, “there are a lot of apps out there that … provide opportunities to charge on some sort of consumable basis. It’s a good way to make sure the people who want to spend more can.”

Don’t hide your paywall

We’ve said it before, but the data backs it up: your paywall should be part of your onboarding experience. According to this year’s report, 80% of trial starts begin the same day users open an app for the first time. If you want to maximize your conversions, the best way is to put your paywall front and center, encouraging users to start a free trial right away so they see the value of your app before they lose interest. Like Jacob says, “you get one shot” to convince users that your app is worth paying for — make it count.

Mitigating churn

Subscription app developers know that acquiring users is only half the battle. The second half is to retain them — and that’s not as easy as it sounds. According to this year’s report, the majority of churn happens in the first month when users see the charge hit their bank account and turn off auto-renew. Some churn is inevitable, but implementing strong engagement and retention strategies can go a long way toward encouraging users to stick around. Just ask Jackson Huttleworth, head of retention at Duolingo. “The easiest way to retain a user is to not let them churn to begin with,” he says. “So a lot of the features that you’ll see on Duolingo are really focused on building that daily habit. Even things that have users spending one, two days away from the app make it significantly more difficult to get them to come back in two or three days later.” Users need to feel the value of your app quickly and consistently in order to keep paying for it.

Lower-priced apps have higher retention

It might seem obvious, but apps with lower subscription prices have higher retention rates. As David explains, it’s just easier for users to justify renewing an app that has a fairly low price. “Oh, it’s only $20, and I’m still kind of using it here and there,” he said. “It’s a way different decision if it’s $20 versus $40 versus $60 versus $100.” These days, lots of apps are priced higher than $20/month, but if the value they provide is worth it, users will pay. According to Jacob, it’s a matter of realistically weighing how much value your app provides against consumer willingness to pay.  “The higher-price something is, the fewer people are going to buy it,” he said. “You’ve got to play around with that price curve.”

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These are just a few of the insights we’ve discovered about the state of the subscription app industry in 2025. To learn more, check out the full State of Subscription Apps Report.