In 2013, app developers in the European Union earned €17.5 billion in revenue. However, most surprisingly, a lot of this revenue, around €11.5 billion in fact, has been earned from contract labour.
This is an interesting phenomena where freelance coders get a bulk of their work and companies also tend to be looking to work on a contractual basis rather than hire people full time.
So What Are Developers Hired For?
The “Sizing The EU App Economy” report published in Brussels on 13th February, 2014, claims that of the €17.5 billion earned by EU app developers last year, €6 billion came from consumer apps – a mixture of sales, in-app purchases and advertising revenues – while €11.5bn came from “work-for-hire” projects for other companies in industries including retail, financial services and packaged goods.
The report also declares that apps accounted for 1 million jobs across the European Union in 2013, with an additional support and marketing staff boosting that total to 1.8m. By 2018, the report estimates these figures will rise to 2.8 million and 4.8 million respectively.
“The app sector is one area of the digital economy where Europe can really lead,” The European Commissioner for Digital Agenda, Neelie Kroes says.
This can be very easily seen if one is to analyse trends in the gaming apps. Finnish company Rovio Entertainment, the makers of the wildly popular Angry Birds, has earned a $200 million in 2012. Another Finnish company, Supercell, made $892 million from its two apps, “Clash of Clans” and “Hay Day” in 2013.
The report does point out that the five most successful European app companies are firstly all game firms and secondly, account for 49% of all the appearances of European firms in the top 50 grossing apps charts across the European Union and the United States.
What Does It Mean For The Future?
According Gigaom Research the revenue earned by the EU is expected to rise to around €86 billion in 2018 and approximately €63 billion will be from the work-for-hire developers.
Neelie Kroes was more optimistic of and said that… “In the face of increasing youth unemployment, these figures give me new hope.” She also told young Europeans to “go grab you one of these 3 million new jobs in the app economy. These are really exciting opportunities if you are ready for them.”
In Conclusion
While the research prediction that the European apps market will be worth €86 billion to developers annually by 2018 could be seen as fueling the app-hype, its claim that €63 billion of that will come from contract labour rather than consumer apps will remind app developers that a profitable apps career doesn’t depend on making the next Angry Birds or Clash of Clans.
