The mobile app business is turning out to be much more massive than everyone thought
Plenty of people still don't "get" Facebook or Instagram or Periscope or Tumblr or Candy Crush Saga. (I still have a few friends who refuse to join Facebook. They are like those hippies your parents knew, who refused to watch TV.)
Sharing a selfie on a phone app feels trivial. But as new numbers from App Annie, the company company that measures app sales and user traffic, show, it is anything but trivial from a financial point of view.
The app business is well on the way to becoming a bigger medium than box office cinema, and it is already far, far bigger than the music business.
Here is how it breaks down:
- App revenues: $34 billion (global sales number estimated for 2018, based on historic 1.7 times annual growth rate.)
- Movie box office revenues: $46 billion (global sales estimated for 2018; sales today are about $40 billion).
- Music revenues: $15 billion (sales for 2013, according to industry group IFPI)
More money is spent at the box office now, but movie sales growth is marginal. App growth is still nearly doubling every year. After 2018, films will be the also-ran to apps, which will become humanity's No.1 entertainment medium.
Apps are already bigger than the GDP of small countries, like Paraguay or Bolivia.
Music was probably eclipsed by the internet sometime in the 2000s, when the industry failed to respond in a way that consumers wanted to the Napster threat.
Those are just the numbers for sales inside Apple's App Store and Google Play. They do not include in-app advertising and competing app stores. In other words, Facebook's app-driven business - worth several more billion in sales - is not included in that number.
So the app business's gross revenues are hugely understated in this analysis.