App Annie: Worldwide app downloads grew 15% and revenue soared 40% in 2016

App downloads grew 15 percent in 2016.

Downloads, revenue, and time spent in apps all grew by double digits during 2016, according to a report by market researcher App Annie.

Time spent in apps grew more than 20 percent to nearly 900 billion hours in 2016, according to the year-end report. That’s just one sign that the global app economy saw healthy growth during the past year.

In its year-end retrospective, App Annie said U.S. time spent in apps grew more than 25 percent. Worldwide, downloads increased 15 percent by more than 13 billion across both iOS and Google Play.

Revenue paid to publishers grew 40 percent to $89 billion in 2016.

Above: Revenue paid to publishers grew 40 percent to $89 billion in 2016.

Image Credit: App Annie

The platform owners paid out nearly $89 billion in revenues to publishers from in-app ads and app store revenue, up 40 percent from the year before. That means apps generated $127 billion in revenues overall, as platform owners take about 30 percent of the revenue.

The $89 billion figure includes revenue paid to third-party app stores and advertising revenue. If you look at the revenue paid out to publishers by Google Play and iOS, the total is $35 billion worldwide. As with downloads, the increase in the iOS App Store’s revenue was largely driven by China, which contributed nearly half of the App Store’s annual growth.

During the year, India grew massively, surpassing the U.S. as the No. 1 country by Google Play downloads. India grew from more than 3.5 billion downloads in 2015 to more than 6 billion last year. The country’s smartphone penetration stands at only 30 percent, so there is a massive chance for more growth.

While mature markets experienced strong growth in 2016, emerging markets, including India, Indonesia, Mexico, and Brazil, saw even more impressive gains. The average number of apps used per month is about 30.

Average number of apps used per month by country.

Above: Average number of apps used per month by country.

Image Credit: App Annie

China took the top spot for iOS App Store revenue, surpassing the U.S. Overall, Android is more popular in developing markets.

Apps are now disrupting legacy industries, such as banking, retail, and entertainment. And financial technology apps have grown in popularity, thanks to ease-of-use improvements in apps like PayPal, Venmo, and Credit Karma. Venmo’s monthly average users doubled from October 2015 to October 2016.

Video streaming went big time in 2016, with sizeable growth for YouTube and Netflix.

Shopping apps grew 30 percent in year-over-year revenue in the United States during the busy month of November.  France, Germany, and the United Kingdom experienced some of the highest growth rates in the number of sessions in shopping apps this past year.

Gaming also had a huge year, as gaming still accounts for 75 percent of overall revenue for apps on iOS and 90 percent of revenue on Google Play. Pokémon Go generated $950 million in revenue in 2016. And Pokémon Go attracted new users; it didn’t eat into the usage or revenue of other games.

In other findings, App Annie said that Black Friday was the first day to ever generate over $1 billion in U.S. online mobile sales. The average American iPhone user now has over three shopping apps installed.

The top five apps by downloads on iOS and Google play were Facebook, WhatsApp Messenger, Facebook Messenger, Instagram, and Snapchat.

And the five top games by downloads were Pokémon Go, Piano Tiles 2, Subway Surfers, Slither.io, and Clash Royale.

The top five apps by revenue were Spotify, Line, Netflix, Tinder, and HBO Now. The top five games by revenue were Monster Strike, Clash of Clans, Pokémon Go, Game of War: Fire Age, and Clash Royale.

Lastly, App Annie said that average revenue per user (ARPU) has been increasing significantly. Japan stood out, as the top 30 games in Japan monetized over twice as effectively as the top 30 in the U.S. This was almost entirely driven by the Role Playing Games (RPG) subcategory, which accounted for roughly two-thirds of Japan’s top 30 games by revenue.

While Japan maintained its overall ARPU lead, China stood out in  terms of growth, increasing nearly 10 times since 2014. As with Japan, RPGs were the driving force in China. However, a deeper look revealed that a specific type of RPG, massively multiplayer online RPGs (MMORPGs), was especially important.

Average revenue per user is rising in games in a variety of territories.

Above: Average revenue per user is rising in games in a variety of territories.

Image Credit: App Annie
APPS

Slack introduces threaded replies

Slack logo

Image Credit: Ken Yeung/VentureBeat

Slack has introduced a feature many users, particularly those in the media, will be ecstatic about: threaded replies. With this capability, the productivity app becomes more in line with Convo, Microsoft Teams, Facebook, and other products targeting the Future of Work space. But unlike many of these traditional apps, Slack has opted to shift these threads to the sidebar pane, removing the chatter away from the main conversation.

Officially called Slack Threads, the feature has begun rolling out today and will be available for all across the web, mobile, and desktop apps regardless of pricing tier.

Previously, if you wanted to reply to a message in a channel, you’d have to @mention them and have it interrupt the main conversation. In doing so, it throws everything out of order and others will find it difficult to follow the train of thought. Now all you have to do is select the “start a thread” option from the same menu where you’d add a reaction. Then, type in your message in the pane that appears and that’s it. The original message in the channel will be denoted with a label saying there’s a reply and also who is participating in that side conversation.

Replies in the thread are arranged chronologically, not sorted based on relevance to the user. Slack’s core product lead Paul Rosania explained it was done out of an abundance of caution so you don’t miss out on something. Anyone can follow a thread and notifications are given to the original poster and those who reply, get tagged, or voluntarily subscribe to know more. If it becomes too much, you can easily unfollow a thread.

How Slack threaded replies work

Above: How Slack threaded replies work.

Image Credit: Slack

Sometimes you may want to share pertinent replies back into the main channel, so threaded replies has an option where you can take any reply and publish it back. If you’re conversing within a design channel, for example, and elect to have a side discussion about the latest layout, you might want to tell everyone what the ultimate decision is. With the “also send to #channel” element, the reply along with a summary of the original post will be published back into the respective channel.

In the left sidebar where all your channels are featured is where you’ll find a new notification link that will show you all the replies related to you.

Slack limits one reply thread per message, but you can have multiple replies in a channel. Everything will also be searchable.

Developers can also tap into this new product offering with an updated API. This means that third-party integrations and bots can work in the sidebar pane.

Slack messages with replies

Easier said than done

The feature is certainly not unique to Slack, but according to the company’s vice president of product April Underwood, it’s one that hasn’t really been solved in the context of work. “In a world where it’s mission critical for people to take advantage of the transparency of Slack and learn about what’s going on in a channel, but have the flexibility to take some conversations over to the side and tuck them out of the main flow of conversation, you really introduce some complexities that haven’t been solved before,” she said.

For nearly two years, Slack says it’s been working on the right way to implement threaded replies. It counters that launching this feature was easy to do. “This is a big feature for Slack and we took a lot of time to get it just right,” remarked Joshua Goldenberg, the company’s head of design. “Over many iterations, there were a total of 7 designers, 2 user researchers, 1 [CEO] Stewart Butterfield, lots of [product managers], engineers, and [quality assurance testers] that worked on this.”

Slack Threads features a section where you can see all the side conversations you follow.

Above: Slack Threads features a section where you can see all the side conversations you follow.

Image Credit: Slack

The company waged an internal discussion about whether threads should be in-line, inside the channel, or where it currently stands: part of the sidebar. Many similar tools have a more traditional setting that’s inside the channel and in-line. But Slack studied its users and discovered that the preference was more in the sidebar. While highly requested, Goldenberg’s team looked at what exactly people wanted and what the needs and workflows around the underlying request were. “It’s easy to build something that people request, but it’s important to build what people actually need,” he said.

Slack sought to highlight the craftsmanship it takes around the productivity app as another reason why it didn’t release threaded replies years ago. The company views them as side conversations, similar to the ones we have in real life, and these should not really interfere with the normal, everyday group conversations. “Threads are more special because they fundamentally change how Slack works,” Goldenberg claimed. “When we work on something so central to the experience, it demands exceptional care and attention.”

With threaded replies, teams don’t need to move conversations into private messaging, which is not indexed by the search engine. Now, there’s a side room available for discussion.

Targeting larger teams

Slack DAU

Above: Slack’s daily active users growth.

Image Credit: Slack

More than 4 million people use Slack every day, which is certainly beyond simply being a productivity app for small businesses and startups. Now we’re starting to see larger teams use it. With more than 1.25 million paying users, more conversations are likely, which is why threaded replies are needed. Think about it: In real life, you’ll have a group discussion that drastically deviates to random or tangential topics. How often have you heard the moderator say “Take this offline”? This is exactly what Slack wants to do with threaded replies.

“More companies are communicating with each other on Slack. People are creating channels within their Slack teams to communicate with vendors, partners, and employees. They’ve done ad projects where they’re sending feedback, comps, etc. to agencies enabling them to move faster than traditional email. We’re starting to see this use case become prevalent. It’s great for companies because it’s not clogging up inboxes and it’s getting [information] into the right channels to the right people,” the company’s former chief marketing officer Bill Macaitis once told VentureBeat.

For Goldenberg and Underwood, this feature is “an incredibly important feature” and one that underscores the impact Slack has on the workplace across businesses of all sizes. “We have graduated beyond smaller teams using Slack. As we graduate to larger deployments in many of the Fortune 100 customers using Slack, as we see more businesses of every size around the world using Slack, we have to look at some of the features that map to how people use [it] to get work done,” Underwood said.

Introducing this feature isn’t a shock since there have been rumors for months about when it would launch. In April, Butterfield said Slack had been prototyping “various forms of threaded messaging internally for months” — something that the company’s head of user research Christina Holsberry Janzer, echoed during a demo of the new feature. Butterfield remarked at the time that threaded messaging “should hopefully arrive” later in 2016. Well, he was a bit off on the timing.

[Source:-VB]

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