Mobile Monday: New with Netflix, Gaming Audience Potential, and Consumer Spending in Apps
Digital Turbine is constantly keeping tabs on the mobile world, and every week, we’re sharing the most interesting and important need-to-know stories and articles. In this edition of Mobile Monday, we’re covering Netflix’s upcoming announcement on earnings and adding an ad-supported tier, more brands targeting the gaming audience, and the change in consumer spend in gaming and non-gaming apps. Learn all about these stories in this week’s Mobile Monday!
Netflix Won’t Go Down Kicking and Streaming
On Tuesday, Netflix may have one of their most consequential moments of the decade when it announces its second quarter earnings. You may recall their poor first quarter earnings report resulted in a plunge of the streaming giant’s stock, which is now down 70% on the year. With Netflix already giving a 2 million subscriber loss outlook for the quarter, anything worse might result in a seismic shift in the Streaming Video Wars — not only for Netflix, but for the category in general.
Or maybe not. The fact of the matter is, Netflix still has more subscribers than any other service. And if you look at what people are watching, its hit series Stranger Things is still at the top of the most streamed shows. So it’s not like people aren’t tuning in. And as long as that is the case, Netflix will still hold a prominent position in the market.
But they still might be vulnerable. In order to counter their subscriber loss, Netflix is preparing to unveil a controversial ad-supported service tier backed by a controversial ad tech platform of choice in Microsoft. The plan, thankfully, isn’t to start ramming ads onto shows for existing subscribers. Existing consumers will have to make the conscious decision to switch to the ad-supported tier. By offering a lower cost option with ads, we’ll really see if people have a price tag on how much they are willing to forego ads to watch their favorite content.
Netflix’s ace in the hole, however, isn’t an ad supported model or even their bangers of content like Stranger Things (although that is part of it). Their biggest strength is, well, their brand strength. Everyone knows who they are, even if they are lukewarm on their name at the moment. And as our recent BRAG blog points out, that strength can certainly be used to maintain and add to market share in a way that would be much more popular than adding ads to their service.
E.l.f. Recognizes Power of Gaming Audience
As more brands realize the importance of tapping into the gaming audience and how expansive and diverse this group is, E.l.f., the cosmetics company, is the latest brand to target gamers with a new product launch. With their new product line, called Game Up, E.l.f. is including a hidden code within the products that can be used to access promos and points with their loyalty program online. What’s more, E.l.f. is launching the new collection at an arcade bar and streaming the event on their Twitch — further efforts directed at reaching the gaming audience.
Whether it’s beauty, food, cars, or any product in between, brands are continuing to see the power and potential of advertising in games and targeting the gaming audience, as this group is representative of all ages, genders, income levels, education, and more, making them a valuable target audience.
E.l.f. has looked into reaching the gaming audience before, and even indicated that 70% of its social media followers play video games. In addition, E.l.f. made a platform to support female gamers and looked to TikTok to sponsor a series calling on gamers. Following other major food and retail brands, such as Chipotle and Nike, E.l.f. is just one of the latest brands to realize the importance of the gaming audience and generate campaigns dedicated to activating this user base.
Spending More and More with Apps — and Non-gaming Apps are Taking the Lead
Gaming apps spending saw a significant uptock during the pandemic, with downloads and spending breaking all time highs. Things are beginning to shift in some areas, with non-gaming apps earning more than games for the first time ever in Q2 2022, according to Sensor Tower.
The boost in revenue from non-game apps is in part thanks to subscriptions, adopted by non-gaming apps in recent years. In 2Q22, 400 apps generated at least $1 million in consumer spending, up 900 percent from 50 apps in Q2 2016.
Taking a closer look also shows a significant difference between the Apple App Store and Google Play. While Google sees many more downloads (TikTok, for example, was downloaded 140 million times on Google Play — and just over 60 million times on the App Store), Apple tends to be the deciding factor in terms of charts — with users spending more.
Consumer spending on the U.S. App Store from non-gaming apps reached 50%, an increase from just 24% five years ago. Looking year-over-year, however, shows a decline in consumer spending for the first time since 2015 — possibly a natural decline following the pandemic driven boom in mobile consumer spending.