Although demand for mental health apps Calm and Headspace has been declining since 2020, revenue from them hasn’t fallen – quite the opposite.
2022 was a massive revenue growth year for the pair, with revenues up 18% and 15% respectively.
Calm started 2022 with the highest revenue in the app’s history – $13 million in net revenue in January. Headspace too, according to AppFigures estimates, with $8 million in net revenue. And that’s after “tax” payments to Apple and Google.
Even though revenue was falling throughout the year, these two companies had their best year in money, earning $94 million and $61 million in net revenue.
But that amazing growth didn’t continue in 2023.
Calm’s revenue fell to $77 million and Headspace’s revenue fell to $49 million, with 2 more weeks of December bringing revenue back to 2021 levels.
Looking at the number of downloads, this trend is unlikely to stop anytime soon because both apps have seen downloads drop over 70% since 2020.
The invasion of new competitors – both indie and well-funded – combined with the fact that users have grown to dislike long meditations has prevented both apps from increasing revenue and forced them to look for other ways to monetise.
This is a good example of the importance of analysing market trends before entering it. Those who rushed into developing a meditation app because they were popular in 2022 may not be able to continue riding a wave that has clearly ended.
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