There's more to making online content pay than just wrapping it up in an app, says Gary Marshall
How long does it take to make $2billion? According to former Nokia manager Horace Dediu, the answer depends on the business you’re in. If you’re a record company, 34 months. If you’re a developer, just 31.
In the eight years since it launched, the iTunes Music Store has generated around $12billion for record labels. The App Store is younger, and it’s making more money more quickly. Apps, it seems, are bigger than The Beatles.
That’s interesting for several reasons. It’s interesting because apps are often simple front-ends for online content; content that’s often freely available via the same device’s web browser. It’s interesting because it shows the power of a decent micropayments system, facilitating impulse buys and in-app upgrades. Most of all, it’s interesting because something strange happens in the move from the browser to the dock: apparently worthless content becomes worth something. With a few exceptions, if you take online content and put it behind a paywall you’re writing your site’s suicide note; take the same content, wrap it in an app and you’ll hear the merry sound of tills jingling.
The wrapping needs to be done properly, though. Take iPad magazine apps: sheer novelty helped Wired sell 100,000 copies of its debut iPad edition; by November sales were down to 23,000. Glamour’s sales dropped 20 per cent in October and 20 per cent the following month, with just 2,775 sales in November. The same month saw GQ’s lowest-ever iPad sales, shifting 11,000 copies. Men’s Health struggled to do 2,000 copies. And so on.
The problem is that those apps don’t add value: they’re digital representations of printed products, and in many ways they’re inferior to those printed products – especially when going digital often costs more than taking out a subscription to the print editions.
“Fancy something with terrible text rendering and file sizes so large you can’t download on the move and you have to delete half of your music and video library to make room for a few
issues?” isn’t a great pitch, and the sales figures prove it.
Like the music industry before them, publishers are focusing on the wrong thing: the format. Had the major record labels paid attention in 1999 and realised what was happening to music, they’d have moved into live music promotion and digital music. But they didn’t. They thought what really mattered to people was the CD, not the music, so when people embraced MP3s for convenience and live gigs for the experience, the major labels could only watch as Live Nation and Apple raked in the cash.
It’s like that with apps. Just putting a front-end on existing online content won’t cut it. Apps need to do something to make users’ lives richer, whether that’s by making something more convenient or by delivering a new experience. If apps don’t add value, people won’t value them.