This App Claims to Earn You Money But Might Just Be Losing Money for Everyone Involved
This is a single insight from This Week in Apps - A Challenging Summer. Check out the full article for more insights.
A few weeks ago, an app called Claim rose to the top of the App Store. With a name like Claim - Make Them Pay, I immediately wanted to know who "they" are and what they're paying me for. And also, how much would I have to pay the app for this pleasure?
Claim helps individuals find out about and join class action lawsuits, the kind of lawsuits a group of people with the same complaint sue together in one case, and others with the same issue who don't join the lawsuit can still share in the outcome.
Notice the word "share". That's important for later.
First, let's talk performance!
Claim launched in February but wasn't on anyone's radar until early June, where we estimate daily downloads were in the hundreds. By mid-June, however, that changed as downloads started spiking and the daily average rose to around 10K.
Like many before it, Claim went viral on TikTok. I promise I'm not looking for these TikTok success stories, they reveal themselves all on their own.
By mid-July, there was enough momentum, and Claim jumped to the top of the App Store, where it stayed for a few days. The trend has ended, and downloads are back down, but still hovering around 10K, which is a nice number considering what the app does.
Appfigures estimates show that since the beginning of June, Claim made its way into 1.2M iPhones (there's no Android app).
But what makes it even more interesting is the revenue. Claiming your money doesn't come free.
Claim's aggressive onboarding promises to get you thousands for just $6/week or $60/yr (or $40/yr if you figure out how to dismiss the initial paywall) and forces you to pay to get started - a hard paywall.
I'll get angry comments for what I'm going to say next, but I'm okay with that - hard paywalls only work at massive scale. They're bad for conversion all other times and win out because some users get confused. That's not how I want to earn money...
The hard paywall gave Claim $2M in net revenue (after fees), and revenue aligns directly with the spike in downloads, which isn't great for a subscription app because it means users are churning.
But there's a twist.
And here's something interesting. While Claim promises thousands in payouts, the average settlement of class actions, according to several sources online, is only a few dollars per person.
Even worse, class actions usually result in a single lump sum being divided into however many people submit a claim, so the easier it is to submit a claim the less each individual will get.
I get the idea of Claim, and I think it's a very clever one, but its longevity is being severely limited by its overly aggressive onboarding, hard paywall, and weekly subscription.
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.
