Revenue Concentration

Revenue concentration measures how unevenly revenue is distributed across apps within a category. In highly concentrated categories, a handful of top apps capture the vast majority of total revenue. In more distributed categories, revenue is spread across a larger number of competitors, giving smaller apps a better chance of generating meaningful income.

Understanding Concentration Levels

Most app store categories exhibit high revenue concentration. It is common for the top 5 apps to capture 70% or more of a category’s total revenue. This pattern is driven by winner-take-most dynamics where top-ranked apps receive disproportionate visibility, leading to more downloads, more reviews, and higher rankings in a reinforcing cycle. Categories with subscription-based monetization often show even higher concentration because users are unlikely to pay for multiple apps that serve the same purpose. Categories built around casual or impulse-driven usage tend to have slightly lower concentration since users are more willing to try multiple free or low-cost alternatives.

Implications for New Entrants

Before entering a category, assess its revenue concentration to understand your realistic earning potential. In highly concentrated categories, competing for revenue means directly challenging the top players, which requires significant investment. A more practical approach is to identify categories with moderate concentration where revenue is spread more evenly, or to target a niche within a concentrated category where the dominant apps do not fully serve a specific audience. Understanding revenue concentration also helps you choose the right monetization model - in concentrated categories, ad-supported models may be more viable than subscriptions since users already subscribe to an incumbent.