How to calculate ARPU
Divide total revenue for the month by the number of users in the month. A service earning $60,000 from 12,000 active users has an ARPU of $5.
Be explicit about who counts as a user. Some services divide by paying subscribers only, others by all active users including free ones. The second gives a lower figure and is the one to use when a free tier is part of the model.
ARPU vs ARPPU
ARPPU is average revenue per paying user. It leaves out free viewers. On a service where 10% of users pay $8 a month and the rest watch free with ads, ARPPU is about $8 while ARPU might be under $2. Both are useful: ARPPU for pricing, ARPU for the health of the whole audience.
What raises ARPU
Expanding into lower-priced markets usually lowers ARPU while raising total revenue, so read it alongside subscriber growth, not on its own.
- A higher tier with a clear reason to upgrade
- Advertising revenue from viewers who do not pay
- Rentals, purchases and live tickets sold to existing subscribers
- Annual plans and fewer discounted months
- Lower fees: commission and transaction costs reduce net ARPU directly
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