Apps: Exploring the Next Content Frontier

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Apple Is Not the Only Game in Town

Apple was the first to come up with the idea of the App store, and as the numbers show, it has been tremendously successful, but as Mark Caron, CEO at Snac (a company that has developed a widget-based dashboard for accessing fcontent from a fcell phone) points out, in spite of this success, Apple only represents a very small piece of the worldwide cell phone market. "While the iPhone has been one of the most successful mobile devices in history and has clearly created a whole new level of engagement with mobile applications, the excitement surrounding it has blinded the industry as a whole from a frank assessment of how impactful the device can be for a business launching an app." He adds, "While official numbers can be murky, best industry guesses have the iPhone's share of the installed base of US phones at about five percent." Caron says this means it's almost a given that businesses need to develop apps across several platforms.

That said, it's also impossible for content producers to ignore the iPhone at this point. Simon Lord, head of B2B marketing for the Financial Times of London (FT) says his company is trying a diversified approach, keeping an eye squarely on Apple while developing for other popular business phones like the Blackberry. "Whilst BlackBerry is still the predominant mobile device in the business environment, our research suggests a large number of our users have an iPhone for personal use--so Apple is a key part of our mobile product strategy." He says FT tries to provide an easy avenue for its content consumers to get FT content, wherever they are and whatever device they are using. "Digital technology has facilitated the development of targeted, niche products. FT journalism is available across FT.com, FT BlackBerry and iPhone apps, Kindle and 27 third party technology platforms," Lord says.

Elsevier's Jan Pretorius, who is the strategy director for the academic and government products group, agrees with Lord's assessment saying that Apple is simply too important right now to dismiss. "Apple is currently the leader and has set the standard for mobile devices. They generate over half of all mobile web traffic." But he says his company will continue to hedge its bets across a variety of the major platforms. "We'll be device agnostic in the medium term, as long as the device class provides a positive experience for users. That implies a staggered development approach, starting with the iPhone and expanding to other operating systems and device classes."

Apps: Beyond the Bandwagon Effect

Content providers, especially those with a history of print, have been desperately searching for new sources of revenue and the app supply chain certainly offers great potential as a new distribution channel. It is a place after all where people have shown a willingness to pay a small price for content, much more so than the general web where most people expect their content to be free. But should content providers simply jump on the bandwagon because it offers a possible revenue path? Blossom says there is plenty of promise, but there is also much danger of falling into old traps.

"Mobile applications hold out three key promises: premium revenues, content control and better user experiences," he says. Some publishers may even believe that the mobile environment provides a place to finally wall off their content, as many have always wanted to do on the web, but he warns this could end up doing more harm than good. "While apps are likely to help publishers for some period of time to adapt existing business models to mobile platforms, they may turn out to be a crutch that prevents publishers [from making] some hard choices about business models on mobile platforms." Further, he cautions publishers from using apps "simply as a well-featured container for rights management and ecommerce, or they are likely to miss the boat on the real opportunities in mobile publishing."

Petrorius offers a similar caution to content providers saying it's important to manage your content strategy carefully because set backs can be costly in more than just lost development dollars. In fact, success and failure can follow the same path onto today's social web "Positive mobile momentum can be attained virally," he says "but failure unfortunately spreads in a similar manner. Negative web network effects that follow poor app reviews can literally--and rapidly--kill an app's chance of success."

The increasing of size of these app stores, he explains, brings with it increasing competition, and failed apps can have a very brief shelf life. This can result he says, in a negative cycle that can spiral quickly out of the control of the publisher. Because of this, "The Apple App Store has been a graveyard for many new apps in late 2009 and early 2010," Pretorius says.

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