Subscribe to this blog's feed
The Coming Importance of Apps
Last week I found myself in conversations with a number of very bright, plugged in people from around the business media world. And, as sometimes happens, many of them wanted to talk about the same thing: the coming importance of smart phones and the applications written for them ("Apps" as people like to call them). The conversations generally went like this:
1. Apple's iPhone has now changed the way in which people will interact with the internet. In the future, more and more consumer and business information will be accessed on smart phone screens rather than via desktop or laptop computers. Small screens are our future.
2. And it's not just Apple. Palm just released its new "Pre" and Blackberry is upgrading its line of devices to encompass smart phone applications.
3. These Smart Phones are important, but not that revolutionary. People have been able to access the internet from handheld devices for quite awhile. The revolutionary part--the real game-changer--is the development of the iPhone App Store and similar offerings from other manufacturers. Those stores make it easy to download specific applications,with just a few clicks, often for free or at low price points.
4. Media companies are realizing that the traditional website, while important, is not a replacement for their newspapers and magazines, particularly when it comes to revenues. Advertisers are simply not willing to run brand-focused advertising at high prices, as they do in print. Instead, the web is the place for direct marketing, where advertisers judge the value of an ad by the number of clicks it gets and calculate return on investment on a minute-by-minute basis. With the supply of website pages going up and advertising dollars flattening out or declining, the price charged per thousand page views is dropping, making the switch of ad dollars from print to web a no-win situation.
5. Without sufficient advertising support for their websites, media companies are turning to their readers to help cover the cost of gathering, editing and distributing information. But in many cases, readers have been trained for ten years to expect that information on a website will be free of charge. There's a lot of talk about the transition from free to paid models on the web, but precious few examples. As it happens, our legal sites are one of the more successful examples of user willingness to pay for valuable information on a website. But our readers are the exception, not the rule.
6. And so, a number of B2B media companies are turning to the App Store idea as a way to monetize their content and create tools for their audience. Not surprisingly, the technology-focused media companies are the first to go in that direction. One told me that he has pulled his developers off of all web development projects, and is entirely focused on building apps for distribution through the Apple, Blackberry and Palm stores. He hopes to have over 300 apps on the market by year-end. Other media companies focused on tech industries seem to be moving in a similar direction.
I don't know yet what to make of all this in terms of our customers, but I think we need to watch carefully. In the first instance, we are making all of our websites accessible on mobile platforms, so that those wishing to access our information while on the go will be able to do so easily. The next step will be to ask which of our products and services are appropriate to the creation of smart phone apps, and how we would want to sell those. And, of course, we'll need to decide which platform our audience will favor--Apple, Blackberry, Palm or something else--since we may not have the resources to simultaneously support all platforms.
Some of you already have iPhones or similar devices, and undoubtedly have experience with apps both free and paid. Do you see the proliferation of smart phones and app stores as a "game-changer" or simply one more step in the evolution of technology? And what do you think we should be doing, if anything, when it comes to developing apps for our products?
Bill -
I think the apps are more about ways consuming information through mobile devices than monetization. You need to address how your information is delivered so people can effectively consume it on the mobile device. The apps and monetization come along with that. I am glad to hear that you are working on making your sites more mobile friendly.
I think you have recognized that the focus is the content and how you access it. For a long time, books and magazines were the only way. Then the internet allowed content to be viewed on line in 800px wide screens. Screen sizes and resolutions grew allowing more information in one screen viewing. Now it has swung the other way, with people accessing information through smaller screens.
For a media company, apps merely seem to be a way for them to deal with mobile devices. But it also possible to create mobile-friendly websites without apps. (For an example, look at my site on the iPhone.)
Unfortunately, that generally means stripping out the parts that take up space and bandwidth. Ads generally fall in that category. Apps seem to be a good way to deal with reformatting the information which is key to the monetization.
Unfortunately, the answer to what we should be doing to develop apps for our products isn't easy. Part of our problem is a generation gap. The established attorneys - who influence the buying process - are likely to remain attached to their Blackberries (a February 2009 Corporate Counsel survey had 95% of Fortune 500 legal departments issuing Blackberries). At the same time, the younger lawyers are using their iPhones whenever possible.
From watching what other companies are doing and how people react, the solution seems to be to do as much as possible. A likely solution would be to:
1. Get an application out and circulating. This first step would be a trial and error period where applications could be developed and scratched quickly as we decide how to handle the process. Palm's WebOS is the natural choice here as it is based on the skills we use for web development and therefore quick and easy to develop.
2.Reach a wider audience. We need to take what we learn in developing the first app and apply it to something that reaches more of our customers. Right now that would seem to be Blackberry.
3.Prepare for our future audience. iPhone apps currently see low use among lawyers, but they bring publicity and make our products more relevant to the younger audience who will one day be the bulk of our customer base. An iPhone app would appeal to younger lawyers, law students, and our other audiences - including SES and Real Estate - which have been quicker to embrace the iPhone.
Throughout this process, we try to monetize. We won’t know what works until we try it. Will advertisers pay to appear in our application? Will users buy the apps? Or even use them?
We can guess at these answers or we can research them. In the end, though, the best answer might be to just make it happen. Create applications and put them out there. If something doesn’t work, change it. Once it works, apply it wherever it seems relevant. And then do it all over again.
I have to both agree and disagree with Doug regarding the utility of mobile applications and what it can mean for media companies. On the one hand, as with everything.. content is king, so yes mobile applications are simply a new method through which to consume information.
However, unlike with the internet at large where users have been conditioned to expect their content free, mobile providers have done a better job of conditioning users to be open to the idea of buying applications and/or games.
One example would be CBS's use of mobile applications during this years March Madness (link): http://tinyurl.com/c59wtf
In addition to a coordinated campaign where they were able to market across platform(ultimately resulting in a 60% increase in traffic). They also were able to debut an iphone app (priced at $4.99) which ranked 2nd most popular at the iphone store.
Interestingly... for most categories paid applications outnumber free ones: http://tinyurl.com/64g6hm
Thus far I agree with Chris, as I am an iPhone user and do download both free and paid Apps. As a “trained” programmer you can basically program an App for Blackberries and iPhones at the same time, and the trial and error is the best way to go.
A little background on Apps - usually there is a free version and a premium version—kind of like our Websites. Many of the Apps that I download all come with free updates (where better versions are offered, bugs are fixed and so on). I think that we should start with a free version, see how well it is received and then move on from there.
To address Christian's comment, oddly enough most of my apps are paid apps. I guess it all come down to the saying “You get what you pay for”. I think that most people assume that when paying for a full version of an App the quality will be better than the free version. This isn't always true, but in most cases, it is worth purchasing the full version as there are limitations with the free versions.
Bill,
FOD theory (“field of dreams”) has been around for a long time (particularly in relation to social software developers) and continues to be a recurring theme I hear when talking with my business associates. Chris Whissen’s comment above suggests such an approach: develop an app, get it circulating, and figure out how to monetize during the process. I understand the sentiment all too well, after all, when people see what you can do and the type of content you can deliver to them, they will want to pay for access. Right?
We recently had the opportunity to exchange a series of e-mails with an iPhone app developer specializing in legal apps, and his take was simply this: sales are small. Now, this is probably a reflection of the statistics of iPhone users in the legal community, and as that community grows so does your potential customer base. But it certainly doesn’t make me want to rush something out the door just so I can have a presence.
Now, if Incisive can create an app tool that somehow gives me a greater experience than your mobile site, it might be worth buying. But if not, why distract yourself?
On this front though, you should go read Dan Bennett’s comments to a post by Greg Lambert on Thomson West’s Black’s Law Dictionary app. (It's on 3 Geeks and a Law Blog, titled "Black's Law Dictionary for the iPhone - Did Somebody Forget Who Their Market Is??") If you’re not familiar with the name, Dan was one of the developers of the app. My takeaway from his comment was that West is betting on the iPhone OS carrying the day, not BlackBerry. For me, I don’t necessarily want to be platform dependent, so enhancing the mobile browsing experience is key.
Anthony Paonita forwarded me this piece about an iPhone app being sold by a consumer publisher, in this case Men's Health Magazine (Rodale Publishing).
http://www.minonline.com/news/11336.html
Perhaps not directly relevant for us, but for those who don't have an iPhone it illustrates some of the ways publishers might think about using the app tool. --Bill