Four weeks ago I had a meeting with an executive trainee at one of my clients. I had to introduce him to the mobile content product development started in 2006.
2006? More than a year before the first iPhone was launched? Yes, there was a mobile Internet time before the iPhone and before apps.
From a content provider or publisher perspective the mobile Internet in 2002-2006 was one of the best periods: unsophisticated xHTML sites and a paid content model. The reach was limited but the users chose the one-click-payment via the mobile network operator (MNO) to read the daily news or sports live tracker.
The first mobile marketplaces were established by KPN (i-mode) and Vodafone (Vizzavi/Vodafone live!). Just as Apple does now, back then these operators controlled who was joining the marketplace and what kind of content could be published. And last but not least, your revenue split — in the case of Vodafone — was only 60%.
The advantage? Economics of scale. One of the most important rules in digital media. Every mobile content product was developed in HTML with a minimum of individual features. Pure and clean. The focus was the editorial content.
The new possibilities created when the Apple iPhone developer kit was released inspired agencies and management. All of them were running behind the huge numbers of app downloads and the rumour that paid content had been found.
Four years later the reality for paid news apps is that they account for only 1.9% of the iPhone app downloads in September 2011. The top 3 types of downloaded content (source: xylogic.com):
- 51% – games.
- 9% – entertainment.
- 7% – social networks
And on the other side, development costs exploded. To launch a state-of-the-art news app you have to invest US$75,000 to US$150,000 minimum. But the expensive point is the running costs. Approximately 25% of the initial investment must be spent for adjustments and bug fixing. Every year.
In the shadow of the app universe the mobile browser market has reached a tremendous level. Special thanks to Google. But not because of mobile search; the failure of the Android market pushed the user to the browser.
Some 2.2 million unique users are monthly surfing on the mobile Web site of the daily newspaper BILD. It is the mobile interpretation of the leading fixed line news site with a scaled concept of delivering content on multiple mobile devices. The business case is based on media sales and paid content for regional news. The surprise: users are paying for content again as they did 10 years ago.
The conclusion for publishers:
- Apps are for CEOs and investors.
- Mobile Web sites are where the money is.