Making Money With Mobile Content & Apps; Curation & Filtering Matters

making money with appsThe last 24 months have seen an avalanche of apps, a rise in mobile video and a myriad of new mobile content consumption patterns. Content and app companies — large and small — are locked in a race to evolve their product sets to keep up with the pace of change. But mobile veteran Dave Moreau believes less is more, and advises app stores and content providers to keep focus and filtering top of mind.

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The explosion of mobile apps and value-added services, ranging from novelty applications to expensive HD games, has unleashed a frenzy of exciting — and expensive — activity in the mobile space. The proliferation of connected devices and platforms may spell opportunity, but it also requires content companies and developers to deliver more apps and services across an ever-growing number of devices, platforms and operating systems. While investors, shareholders and management teams may be nervous about the impact of all this change and flux on revenue projections in the short-term, there is no denying that the potential pay-off in the longer term is worth the effort.

When I started FoneStarz back in 2002 I decided the best and most cost-effective strategy was to hitch our content expertise to the Operator wagon. By supporting mobile operators we could use their traffic to generate interest in our services (distribution), split the revenue with the partner operator and use our share to grow the business.

It was a successful strategy at the time and we grew rapidly, building on the back of one successful case study in the U.K. to roll out to 26 operator relationships in 14 countries including New Zealand and South Africa. Back then the Operator portals were the principal destination for mobile content and services (there were no ‘apps’). And they were super user-friendly to access, often triggered by a hot key on the exciting new devices that were breaking on to the market. Predictably, portal traffic figures went through the roof. In a number of countries, including South Africa, portals are still attracting significant traffic and the growth in mobile Internet services is still impressive. But that’s not the case in regions such as North America and Western Europe, territories where the launch of the Apple iPhone smartphone and the App Store in 2007 threw a spanner in the works.

Shift happens

Indeed, the brilliantly marketed Apple App Store and the ground-breaking iPhone shifted the balance of power in favor of the handset manufacturers. As a result, the handset makers became significant players in the content game and for the first time the Operators surrendered their vice-like grip on the mobile content business.

Today, just four years later, we have a radically fragmented content market with statistics from handset makers —now the leading distribution channel for apps and content —that blow your mind.

Nokia’s Ovi Store, even though it’s a relative newcomer, boasts 9 million downloads a day. Android reports 550,000 new Android devices being enabled every day and Android Market counts a whopping 270,000 apps and rising.

Between Apple and Android there are more than 2 billion downloads a month, with Android catching Apple fast. Independent app store GetJar, with over 150,000 applications, hit the two billion download mark this year. Connect the dots, and we are downloading more apps than ever before — and the upward trend continues. However, the vast majority of all apps downloaded are free (or linked to a freemium model), so where’s the money?

Even mobile video, which accounts for between 40 and 60 percent of ALL mobile data traffic on Operators’ networks, is mainly free. Advertising revenue is starting to kick in, but the flow is currently more like a trickle as agencies are just coming to terms with the mobile medium and how to best spend their money to deliver effective advertising around apps. Indeed, the next 12-18 months will see a new phase of growth and activity in mobile video as the data collected about mobile usage becomes significantly more meaningful to advertisers and a driver for a new wave of mobile entertainment services from 2012 onwards.

The Games Store

Updated Livewire LogoIn such a fast moving space the business questions come thick and fast. Who are the most important players in the mobile content space? How should I place my bets going forward? What are the best and most effective monetization models and payment schemes that will allow us to make money on our valuable content? Can we realistically support all the operating systems, let alone multiple versions of each?

Since FoneStarz was acquired by Livewire Mobile at the end of last year, we have gained a new perspective on these key questions. Our conclusion? Yes, there is uncertainty, but the opportunities are bigger than ever.

Do the Operators still matter to us? Yes, absolutely! They still have a huge say over the icons and shortcuts that are displayed on handsets at the point of sale (the icons that shape the consumer experience from day one). Of course, handset manufacturers also influence and decide the selection of icons, which is why we see opportunities for content specialists (like Livewire Mobile) to work alongside both customer groups — Operators and handset makers.

Can Operators play in the app store space? Yes, provided they choose the right approach. The new Games Store we designed, developed and launched for our Operator client Three in the U.K. and Ireland shows that the user experience is everything.

The Games Store is browser-based, but with an application and widget strategy behind that to give smartphone users an easy way to discover the best range of games for their device. Widgets complement both the apps and the mobile browser sites, enabling Android phone owners to place interesting, updatable widgets on their homescreens which interact in the background with new content feeds. To round it all out, Operator billing has been fully integrated to make the whole experience as clean and easy as it is fun.

Business basics

Over the years the strategies we and our clients have employed to tackle the discovery problem and expose content to mobile consumers have evolved. However, our experience shows the basic rules you need to follow in order to deliver consumers a compelling and engaging experience still hold true.

  • License the best content. Aim to build relationships with the world’s best media companies
  • Think seamless. Make sure it’s available for as many handset/OS variants as possible  — and ensure entertainment services run properly on all handsets and all variants of each operating system, seamlessly
  • Make the pricing competitive and think ‘bundle.’ Local market pricing for mobile entertainment is vital to business success. Understand the pricing issues locally and tailor the proposition accordingly
  • UI never ends. Work hard on the user experience – then improve it further. Watch your competitors, like Apple, for best practice.
  • Rock and roll. Rotate the content according to demand and experience. Static displays are boring, so get the best content in front of your customer
  • Get personal. This is an era where one size does not fit all. Use your data to narrow down the selection process so that you are offering each customer what they like and what the people they respect recommend. (Have a look at our new music webstore as a prime example.)
  • Curation matters. Use editorial and curation skills to anticipate market trends. Having skilled, enthusiastic specialists on your team can help you look out for new, trending entertainment products
  • Connect with customers. Keep in touch with your customers through opt-in CRM and offers. If you are connected to your customer and delivering a great product, further that relationship with direct offers
  • Remember this is entertainment!

Choice and curation

Our customer’s customers are accustomed to choice. However, the real opportunity moving forward may be in approaches that help our customers —and their customers — make sense of the proliferation of apps. In The Paradox of Choice, author Barry Schwartz tells us at what point choice makes it difficult to make decisions. While we assume more choice means better options and greater satisfaction, excessive choice is not always a good thing. In fact, the best solution to our choice overload may be offered by approaches that limit our choices.

In the mobile space there are 110 app stores with hundreds of thousands of apps. It’s tough for an app to get exposure, let alone achieve critical mass. It may seem as if discovery is a totally new issue we need to address. But the proliferation of apps is a repeat of what we saw in mobile content pre-2007, when we faced an abundance of Operator portals and providers offering us a ever-growing variety of video clips, games, ringtones and music tracks. Back then we had technologies in the form of on-device portals to help surface the most popular content across the various categories and be sure it was pushed to the front of the storefront.

Today we have another name for it: “Curation.” This approach to filtering, supported by editorial guidance and a great user experience, is defining what mobile content merchandising is all about. Put another way, effective personalization requires a balance mix of input from technology and real people. It’s important to make the right selections for your customers, and it is essential to complement this with automated recommendations based on their previous behavior and the choices made by their friends, family and community. Employing this hybrid approach has doubled —even tripled — conversion rates across a variety of territories, proving that technology (as always) gives us a huge head-start in capabilities. However, it’s still experienced human intervention that adds the magical extra ingredient to the mix.

About Dave:

Dave MoreauDave Moreau, Chief Operating Officer of Livewire Mobile, has more than 25 years of experience in founding, building and running media companies. Dave joined Livewire Mobile as chief operating officer in December 2010 through Livewire Mobile’s acquisition of FoneStarz Media Group, which he founded in 2002. As CEO of FoneStarz, Dave supervised the build of the company’s award-winning mobile digital storefront and content platform and created partnerships with many of the largest telecom and media brands in the world. Prior to FoneStarz, Dave was vice chairman of the National Association of Press Agencies for four years where he specialized in the monetization of traditional media. He was also the editor of Mason’s News Service and Television News, where he transformed the company into one of the top UK regional news and television agency group and increased revenue more than 10 times in two years while creating four spin-off companies. Dave qualified in journalism through the British NCTJ program at Harlow College. You can follow Dave on Twitter (@davemoreau).

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