“Monetise the user, not the channel” is something I’m sure we’ve all heard before in strategy presentations internally and at conferences. But what, in practical terms in 2013, does this mean?
Ian Fogg, analyst at IHS, addresses the second annual Mobile Media Strategies conference this morning in London, telling the assembled media executives that successful mobile business models are distributed across media. His talk had all sorts of meaningful stats and lessons for media owners:
No is safe from the mobile revolution
It’s important to remember that the advent of smartphones doesn’t just change everything for us – professional content businesses – but for everyone.
Six years ago when Apple launched the iPhone, there was no app store ecosystem… What’s striking is the ripples of innovation have rippled out to other parts of the economy. First mobile, then tablets, then to other phones like Windows Phone… then to PCs and other parts of the market.
The app store model is in the car, it’s on the PC, it’s on the Mac, it’s not just on mobile but other adjacent markets too.
Fogg mentions the current woes facing Blackberry, which missed the app store party by waiting too late to join in – a cautionary tale for media owners:
At the time when Apple was doing well and disrupting, Blackberry was doing really well… They took three years to react and build a new OS, but it took too long.
This change is shfiting value between companies, it’s not just about media, it’s not just about mobile.
Apple vs Google
Fogg says Apple still wins hands down when it comes to the amount of money spent per user on apps and services, but Android reaches a much broader set of people. He’s in no doubt it is a duopoloy in mobile between those two players: “other players are going to struggle.”
Pick the right partners
There is much talk of working with Apple and Google from an app store point of view, but what about partnering with another key part of the mobile ecosystem: mobile operators.
We think of Google and Apple as the only people who matter – actually they’re not. There’s tremendous opportunities to work wth operators, they’re huge businesses, they have 4G and they have big marketing budgets.
They are looking for not just video, but any kind of rich media that can drive subscriptions.
Fogg points to content deals operators such as O2 and EE have signed with the likes of Sky and Spotify. Operators need to add value to their 12- and 24-month subscriptions, both to keep customers and acquire new ones. Why not add publishing content to that mix?
Perhaps the most salient point Fogg has to make is this: don’t forget in-app payments. These are what drive a huge chunk of app store income and represent the most profitable element of many app-making businesses, especially games. The most downloaded apps are not the top grossing.
If you have got the relationship, you can do it though the app. To say in-app purchasing isn’t the best way to get money out of people is like saying the iPhone is a prototype.
Fogg points to Angry Birds maker Rovio and FIFA developer EA, which saw a 73 percent year on year increase after pushing through a new in-app payments strategy. The Guardian, incidentally, does use in-app payments for its mobile products, as do several other publishers, but the point stands that it’s under used.
Don’t “monetise mobile”
Angry Birds is sold at a big discount – £0.69 or $1. That might sound shortsighted – why not charge more for such a hugely popular game? Rovio makes 45 percent of its revenues from non-mobile sources such as brand licensing and merchandise. “Maybe mobile monetisation is the wrong question and it’s more about making money from the brand.”
And finally, what happens to the media owners who are still waiting for the right time to seriously launch their mobile business models?
“You need to be in mobile at least to test it and work it into your core busines… If you aren’t in mobile you’re in denial and the world would move around you.”