mHealth Apps Publishing: Strong on Ideas, Weak on the Bottom Line?

I am not sure that I’ve seen as much hype around an industry silo than that surrounding health and the mHealth app movement. So, it is not surprising that research2guidance’s mHealth App Developer Economics 2016 report highlights what many developers and publishers might be ignoring: the imbalance between supply and demand. The story here is that 259,000 mHealth apps are available for download in major app platforms while the download growth rate has slowed by a whopping 28 percent since 2015. Crazy, right?

Accordingly, not only are there too many choices, but, a majority of publishers (78 percent) have made <$100,000 from their entire portfolio. Moreover, the download cap appears to be $10 for either a monthly subscription, one-time download or single-session access to an expert. In other words, mHealth apps publishing appears to be a bust from a financial standpoint even though projections tout 15 percent revenue growth through the year 2020 to reach $31B. However, with so many “shareholders,” one must consider where and what strategy to pursue that will yield the largest return(s).

The Silver Lining

There’s a silver lining here, one that I wove data point by data point and I hope that an mHealth app publisher will take this seriously because if done correctly, it is going to help burst the financial ceiling.

If you dive into the details, chronic diseases tend to come out on top and in fact, 56 percent of app publishers report that chronic disease sufferers are a target group that can benefit most from mHealth. The ‘sexiest’ condition and the one with a clear opportunity appears to be diabetes, which, 73 percent of publishers rank as having the highest business potential.

If you are wondering what it is that makes diabetes a ‘sexy’ opportunity, it is that optimal management relies on data sets—in particular blood sugar levels, dietary habits, exercise and medication. mHealth apps provide a perfect bridge between self and clinical monitoring, and also create a means by which the patient journey can monitored and ultimately influenced for positive outcomes. It’s an obvious win-win for the publishers, the patients and the clinicians who treat them and payors who remain an elusive target but can benefit from healthier diabetes patients/improved behaviors.

Another potential opening is the newly-created partnership between government and medical health officials – Prevent Diabetes STAT – the goal of which is to prevent diabetes altogether (STAT is an acronym for screen, test, act today). The program currently offers a ‘tool kit’ for three primary health stakeholder silos: patients, providers, and insurers, one that appears to be sorely lacking in sophisticated technology to tie it together. If you consider what Apple’s Care Kit is doing with Mass General and its GlucoSuccess app, it makes perfect sense to create multiplatform remote diabetes monitoring apps that can be introduced within the clinical setting at initial diagnosis, used to track diabetes and communicate results, and then connect on the payor side to incentivize sustained behavioral changes. And, that’s only one example of the endless possibilities.

Mhealth App Developer Economics 2016 report highlights that there are five primary revenue streams: service (backend servers, medical staff, individuals interested in personalized health), device (hardware specific sales), transaction (drug/medical product sales through the app), paid download, and advertising. The majority of profit—when there is any—is currently derived from device sales but with the growing interest in personalization of medicine, the focus on prevention to save health dollars and a movement toward remote/telemedicine monitoring, there are novel revenue streams to be had.

While the economic forecast is not that impressive from an individual publisher standpoint, there are major gaps in the current marketplace that just scream to be filled. It’s time for the hyped up rubber to meet the road.

*N=2,600 global respondents accounting for roughly 7,900 published mHealth apps (~5% of the global total).

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