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Subscription Video Services Lift Global App Spending

Mobile users around the world keep spending more money on apps every quarter, and one of the big drivers of app revenue growth are subscription video services like Netflix and HBO Now. That’s according to new data from app analytics specialist App Annie, which published its Q3 market index report Monday.

Worldwide iOS and Android app revenue reached $17 billion in Q3 of 2017, according to that report. That’s 28% year-over-year growth, and far surpasses the 8% growth in app downloads App Annie tracked for the same time frame. In other words: People aren’t just downloading more apps, they’re also increasingly spending money on those apps.

A big chunk of that revenue growth is being driven by entertainment apps, which saw a 30% revenue growth on iOS and a 45% growth on Android/Google Play. “On iOS, Tencent Video experienced the highest quarter over quarter share change in the Entertainment category in Q3 2017, followed by Youku and Starz. On Google Play, HBO Now had the highest share change followed by Netflix and Starz,” said App Annie industry analysis manager Matt Miller in a blog post.

Starz is likely experiencing an “Outlander” bump here, with users flocking to the network’s subscription app to watch Claire’s latest time travel adventures. But the growth of Tencent and Youku for Apple is equally interesting. For one thing, Apple has had some recent troubles in China, with iPhone sales declining over the past few quarters, and regulators now cracking down on the Apple Watch’s wireless connectivity.

But growth in Tencent and Youku revenue also seems to indicate that Chinese consumers are increasingly willing to pay for subscriptions, something that Google isn’t profiting from in the foreseeable future. The search giant left China in 2010, and has since been unable to sell apps and content to Chinese consumers.

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