--- title: "What Is ARPU? Average Revenue per User Explained | RentAnOTT" description: "ARPU is the average revenue a streaming service earns per user in a period. See the formula, how it differs from ARPPU and what moves it." url: "https://www.rentanott.com/glossary/arpu" markdown_url: "https://www.rentanott.com/glossary/arpu.md" category: "Metrics" updated: "2026-10-05" --- # What is ARPU? ARPU (average revenue per user) is a service's total revenue in a period divided by the number of users in that period. It shows how much each user is worth on average, across subscriptions, advertising and one-time sales. ## 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 ## ARPU on RentAnOTT RentAnOTT analytics report revenue from subscriptions, transactions and ads on every plan. The revenue calculator models revenue per user across AVOD, SVOD and TVOD. [Try the revenue calculator](https://www.rentanott.com/tools/ott-revenue-calculator). ## Related terms - [ARPPU](https://www.rentanott.com/glossary/arppu) — ARPPU (average revenue per paying user) is the revenue a service earns in a period divided by the number of users who made at least one payment in that period. Unlike ARPU, it leaves out everyone who used the service for free. - [MRR](https://www.rentanott.com/glossary/mrr) — MRR (monthly recurring revenue) is the subscription income a service can expect every month from its active subscribers, with all plans normalized to a monthly amount. It excludes one-time sales and other irregular income. - [LTV](https://www.rentanott.com/glossary/ltv) — LTV (customer lifetime value) is the total revenue, or margin, a service expects to earn from one subscriber over the whole time they stay. It tells you how much you can afford to spend to acquire a customer. - [Churn rate](https://www.rentanott.com/glossary/churn-rate) — Churn rate is the percentage of a streaming service's subscribers who cancel or fail to renew during a period, usually a month. It is the main measure of how well a subscription service keeps its customers. - [MAU](https://www.rentanott.com/glossary/mau) — MAU (monthly active users) is the number of unique users who were active on a service at least once during a month. On a streaming service, active usually means signing in or starting playback. - [Hybrid monetization](https://www.rentanott.com/glossary/hybrid-monetization) — Hybrid monetization is the practice of running more than one revenue model on a single streaming service, such as subscriptions, advertising, rentals, purchases and in-app currency, so that each viewer can pay in the way they prefer. - [Localized pricing](https://www.rentanott.com/glossary/localized-pricing) — Localized pricing is setting a different price for the same streaming plan in each country, in the local currency and at a level that matches local incomes and competing services, instead of converting one global price at the exchange rate. - [CAC](https://www.rentanott.com/glossary/cac) — CAC (customer acquisition cost) is the average amount a service spends on marketing and sales to gain one new paying customer. It is total acquisition spending in a period divided by the number of new customers won in that period. ## Further reading - [OTT subscription plans and tiers](https://www.rentanott.com/blogs/ott-subscription-plans) - [Localized pricing calculator](https://www.rentanott.com/tools/localized-pricing-calculator) - [Content monetization platforms compared](https://www.rentanott.com/blogs/content-monetization-platforms) ## Frequently asked questions ### What does ARPU stand for? ARPU stands for average revenue per user. It is sometimes written as average revenue per unit. ### Is ARPU measured monthly or yearly? Monthly is the norm for streaming services. Any period works as long as revenue and users are counted over the same one. ### Should ARPU use gross or net revenue? Net of app store commission, payment fees and taxes is more useful for planning, since that is the money you keep. State which you are using when comparing figures. All 163 terms: [Streaming and OTT glossary](https://www.rentanott.com/glossary). ## Book a demo Tell RentAnOTT what you are launching. The team walks through the platform and maps the path to go-live around your catalog, markets and revenue model. Book a demo: https://www.rentanott.com/contact ## More from RentAnOTT - [Home](https://www.rentanott.com/index.md) — What RentAnOTT is, what every plan includes, and how launch works - [Features](https://www.rentanott.com/features.md) — Every core feature and optional add-on - [Pricing](https://www.rentanott.com/pricing.md) — Platform tiers, apps, add-ons, usage rates and example bills in INR and USD - [Free tools](https://www.rentanott.com/tools.md) — OTT app builder and calculators for streaming revenue, bandwidth, bitrate and pricing - [Insights](https://www.rentanott.com/blogs.md) — All streaming business articles - [Glossary](https://www.rentanott.com/glossary.md) — Definitions of streaming and OTT terms - [Book a demo](https://www.rentanott.com/contact.md) — Talk to RentAnOTT about your launch Full site in one file: https://www.rentanott.com/llms-full.txt