ARPU (average revenue per user)
Also known as: Average revenue per user
Average revenue per user is the average recurring revenue a publisher earns per subscriber, typically per month.
It's a key input to lifetime value and a useful way to compare plans and cohorts.
The formula is simple: ARPU equals monthly recurring revenue divided by the number of active subscribers in the same month. A title with £18,000 MRR and 2,000 subscribers has an ARPU of £9. Because both inputs move, ARPU is best read as a trend over several months rather than a single figure.
What makes it useful is what it exposes. Two publishers with identical subscriber counts can differ twofold in revenue, and the gap is almost always pricing, plan mix and discounting rather than editorial quality.
Why it matters for publishers
ARPU tells you whether growth is coming from more readers or better monetisation. It is also half of the lifetime value equation, so a small, sustained ARPU improvement compounds into a materially more valuable subscriber base.
How publishers use it in practice
- Calculate ARPU as MRR divided by active subscribers, monthly.
- Segment it: annual vs monthly, direct vs discounted, trade vs consumer — the blended figure hides the story.
- Discounting and heavy trial use suppress ARPU; measure it after promotions expire.
- Raising prices for new subscribers only is the lowest-risk way to lift ARPU.
- Normalise annual plans to a monthly figure so plan mix does not distort the trend.
Worked example
£18,000 MRR across 2,000 subscribers is an ARPU of £9. Moving a fifth of those subscribers onto a £15 tier lifts ARPU to about £10.20 and MRR to £20,400 — without acquiring a single new reader.
Levers that lift ARPU, ranked by risk
| Lever | Typical effect | Risk |
|---|---|---|
| Price rise for new cohorts only | Gradual, compounding lift | Low — existing subscribers unaffected |
| Shallower annual discount | Immediate lift on annual mix | Low |
| Add a premium tier | Lifts ARPU on a minority of subscribers | Medium — needs genuinely extra value |
| Fewer acquisition discounts | Higher ARPU, fewer new subscribers | Medium |
| Price rise for existing subscribers | Largest immediate lift | High — expect a churn spike |
ARPU, MRR and LTV together
MRR tells you the size of the business, ARPU tells you the quality of each subscriber, and LTV tells you what you can afford to spend acquiring one. Read alone, each can mislead: MRR can rise while ARPU falls because of heavy discounting, and ARPU can rise simply because your cheapest subscribers churned.
The healthy pattern is ARPU flat or rising while subscriber numbers grow. That means you are adding readers without buying them with discounts.
Frequently asked questions about arpu (average revenue per user)
- What is a good ARPU for a publisher?
- Consumer titles commonly sit between £5 and £15 a month; specialist B2B and trade titles run several times higher because the subscription is expensed.
- How do I increase ARPU?
- Price rises for new cohorts, an annual plan with a smaller discount, a premium tier, and fewer deep discounts on acquisition.
- How is ARPU calculated?
- Divide monthly recurring revenue by the number of active subscribers in the same month. Convert annual plans to their monthly equivalent so plan mix does not distort the result.
- What is the difference between ARPU and LTV?
- ARPU is revenue per subscriber per month; LTV is total revenue expected across a subscriber's whole lifetime. LTV roughly equals ARPU divided by your monthly churn rate.
- Should trials and free readers count in ARPU?
- No. Count paying, active subscribers only, otherwise a big trial push will look like a collapse in monetisation.