The Next Top (Content) Model
One model similar to in-app purchasing that has yet to gain momentum, but has the potential to revamp the payment paradigm for the publishing industry, is the idea of microtransactions, or paying for content in small, incremental amounts of money like, say, 10 cents per newspaper article. This way, instead of subscribing to a magazine or newspaper or paying for a single issue, users can pay for a single article. As Beccue notes, this model is a "variation on the theme of in-app purchase, but it really fits well for media. It has been experimented with in Europe a little bit, but it didn't really work yet. I think it has potential. You have an app. The microtransaction would say, ‘You can read the first third of the story,' and then all of a sudden a prompt pops up that says ‘To read the rest of the story costs a nickel.' There is no subscription. And then you start to collect all of your nickels, and that is an opportunity [for publishers] to monetize this in a way that it hasn't been before."
This model resembles the technique of publishers offering e-singles, or short pieces of content sold for smaller prices rather than for an entire subscription or book. As reported in the November 2011 EContent.com feature, "Publishers Get Into the E-Singles Scene," publishers such as Princeton University Press, Rodale Books, and Penguin are already testing short ebooks in the market, and Amazon has found huge success with its Kindle Singles store, which offers reporting, essays, memoirs, narratives, and short stories for download at prices starting at 99 cents. It seems that consumers like the idea of shelling out pocket change for their content, as long as it comes in a format that's new to them.
The Atavist, a boutique publishing house, produces original nonfiction stories that are longer than a magazine article but shorter than a book for digital mobile devices. Curious iPhone users purchase these long-form articles for $2.99 each from within the app. Evan Ratliff, co-founder and editor of The Atavist, explains that at one time, convincing publishers to embrace the singles model was difficult. "They were a little skeptical at first, but now you see them getting into it. You see GQ selling expanded versions of stories as Kindle singles. You see Vanity Fair selling ebooks. This is a new way for everyone to publish, and there isn't really a reason why publishers can't do it as well."
The app is just a finished product, but publishers such as Pearson, an educational publishing company, have found a way to make some cash off their content as well through an Application Programming Interface (API). An API functions as a distribution venue for digital information, so in regard to apps, a company would release its API with coded content to the public; developers could then pull from that content and create new apps. In 2011, Pearson released three of these APIs, allowing developers to reuse its Eyewitness Guides city data, Longman dictionary definitions, and Financial Times press releases for free. In 2012, Pearson decided that it was time to charge developers to reuse its content and released Kitchen Manager, a collection of 2,500 recipes from its cookbooks, and packaged it as a chargeable API. With this decision, Pearson has opened the door for other publishers to monetize their content without even having to go to the trouble of creating an app. Interested developers won't even have to pay until they reach a certain monthly data usage.
Lastly, user-generated content (USG) may step into the app limelight in 2012. Angelo Biasi is VP of business development for DIDMO, a mobile marketing company that created a user-generated mobile content creation service called Magmito. He notes with the increased availability of do-it-yourself app building software, the average, nontechie content lover can become an app developer. "Five-hundred thousand apps in App Store from roughly 150,000 developers is nothing compared to a tiny percentage of tens of millions of small-to-medium businesses, bloggers, and Facebookers-all content marketers-creating and publishing mobile content as the ‘new developer community,'" says Biasi. With its USG app creation software, DIDMO is seeing "users creating apps to promote special talents (i.e., DJs, artists, musicians), support events (weddings, birthdays, etc.), communicate affinity group info (e.g., schedules and highlights for high school basketball teams and book clubs), and even mobile resumes." With a low cost for production (about $4.99 a month), anyone can be a developer in the future.
App Model Takes on the PC
No matter which mobile content model publishers employ to distribute their content, one thing is clear: Apps are influencing every corner of the digital market, and publishers need to keep pace. "Traditional print media, particularly newspapers, have been living in the past when it came to digital media. For them to succeed, they have to embrace these digital opportunities through mobile," says Beccue. "There are indications that, for consumers in general, we're going to see the decline of home computers. The tablet is going to be the replacement for that, because of the touchscreen and the way you interact with it, it is really ideal for some of those publications and magazines to transform themselves."
The popularity of apps and their interactive experiences may spawn an entirely new content model involving the web. "More and more, the interfaces and app-like experiences that we're already seeing on mobile are going to become more a part of the web experience," says Smith. "To some degree we are already seeing that. Google has done this with its Chrome browser. The basic web experience is going to feel increasingly app-like. For instance, a lot of the paid apps that you can find for Sports Illustrated on the tablet and the iPhone are actually also on the web."
And let's not forget web-based social media sites. "The app model is emerging on Facebook. There are some publishers that are leveraging the virtual goods economy that is occurring kind of simultaneously on mobile and also on social media," explains Smith. "There have been some publications that have run trivia contests and games on apps within their Facebook pages that generate revenue through virtual currency."
As technology circles back around from the app to the web, "the hope is that business models will come with it. The hope is that that behavior will migrate back to the web too," says Smith. With all the options out there, we can only wait and see which model comes out on top in the future.
Barnes & Noble
The Financial Times Ltd.
Google Play (formerly Android Market)
GQ, Condé Nast
Martha Stewart Living Omnimedia, Inc.
The New Yorker,
Next Issue Media
Princeton University Press
Vanity Fair, Condé Nast