AI-powered apps can make money, but struggle with long-term retention, new data shows
New data shows AI apps convert users better but suffer 30% faster churn than non-AI apps.Summary
A new report from RevenueCat, based on analyzing over $11 billion in annual revenue from apps using its subscription management tools, indicates that while AI-powered apps are effective at initial monetization, they struggle significantly with long-term user retention.
AI apps convert users from free trials to paid subscriptions 52% better than non-AI apps and have a 20% better monetization rate of downloads. They also show a 39% higher median realized lifetime value (RLTV) monthly ($18.92 vs. $13.59). However, AI apps experience 30% faster subscriber churn, with annual retention rates at 21.1% compared to 30.7% for non-AI apps.
The report suggests this difficulty in retention might stem from the rapidly evolving nature of AI technology, causing users to frequently switch between apps seeking the most current features, and higher refund rates (20% higher median) indicating users find the value proposition inconsistent over time.
(Source：TechCrunch)