Where do Media Companies Fit in the World of Mobile Apps?
In the last post of our media and entertainment blog series, I highlighted the fact that now almost one-third of U.S. mobile web traffic is driven by the Facebook mobile application. What that means for content publishers is that they have to focus on tailoring their content for distribution and consumption on the Facebook platform.
The prominence of the Facebook mobile application begs the question: Can media brands do well with their own applications and drive the audience to these branded experiences?
Media Brands Must Have Distribution Options
The Atlantic’s Alexis C. Madrigal highlighted the dependence some media brands have on Facebook by using a farm analogy:
“Digital media companies have grown reliant on Facebook’s powerful distribution capabilities. They are piglets at the sow, squealing amongst their siblings for sustenance, by which I mean readers. Think about how this weakens the basic idea of a publication. ”
Bleacher Report’s Chief Content Officer Rory Brown tells Digiday in a recent interview that the sports site is looking beyond optimizing content for Facebook because the social media platform could change its algorithms which would impact its ability to reach audiences. Brown to Digiday: “You want to establish as many traffic channels as possible. If Facebook or Twitter made some kind of algorithm change, it would affect us too, but not as much as some of the others.”
Bleacher Report seems to be getting it right: 40 percent of its traffic comes directly to the site while it’s also the eighth most shared publisher on Facebook, according to the latest Newswhip/Spike data for January 2015. That means Bleacher Report will be able to get to the one-third of the audience who use Facebook as its gate to the mobile web, while also having a direct-to-consumer relationship via its site. Contrast that with Buzzfeed, who just announced that only 5 percent of 950 million monthly video views happen on its own site.
Mobile Apps versus Responsive Design for Mobile
Beyond delivering content via the Facebook mobile app, what kind of mobile experience do you deliver to keep people engaged with your media brand’s content on their device? A responsive mobile optimized site or a mobile app?
Most media companies today offer both experiences for consumers. A responsive site means the media company can deliver an experience that is not dependent on any particular mobile operating system or web browser. The digital experience should display and work in a beautiful and consistent manner across devices.
It may cost more to develop and deliver an app that works on various mobile operating systems, yet applications allow a push environment for media companies to broadcast to audiences. An application will inform an audience with a constant stream of new articles, videos, podcasts, or slideshows. In addition, app notifications will remind audiences of social engagement around content - e.g. new likes, shares, and comments - which encourages fans to join in on the conversation in the brand’s app.
Monetizing Media Apps - Tens of Billions of Dollars
There are several ways media company apps can be monetized. They can be subsidized with in-app advertising revenues, or money can be earned by charging consumers for the initial download. Some apps have a recurring subscription cost. Regardless of the path to make money, there’s a lot of it being made. Research by Asymco shows that just the iTunes Store alone brought in $10 billion in revenues for app developers in 2014. That’s more than the US box office take for the year.
Asymco Chart Showing App Sales on iTunes overtaking the U.S. Box Office Revenues
An app allows a media brand to create more interactive calls to actions (examples: voting, sharing, rating) that creates a deeper set of user behavior data. Such user data can be leveraged to personalize a media experience. NBCUniversal just rolled out an app that packages 40 years worth of Saturday Night Live content. By learning what skits you like to watch, your favorite comedians, characters, and seasons of SNL, the app will then personalize your experience by choosing specific videos from the some 5,000 plus pieces of content. Advertisements in the new SNL app will also be tailored to an individual's viewing experience creating more high value advertising opportunities for NBC. Even though the app is free, it’s a revenue generator.
Media Companies Missing from Top App Charts
In 2015, major media brands are missing from the top downloaded or accessed apps. Again, a majority of the media content is accessed via the Facebook app. No traditional media company ranks in this list of top mobile apps, created by Comscore from mid 2014. The Weather Channel (disclosure, an Acquia customer) is a media company ranking at #15.
Still this Comscore data does not paint a complete picture of how media companies are performing in the marketplace for mobile apps.
Media Companies Must Gamify Their Brands
App Annie has the most detailed app analytics data and it’s worth visiting their charts on a regular basis to look for break out hits and how media companies are faring with mobile.
Taking a look at the stats around February 20th 2015, App Annie shows Warner Bros has the #3 downloaded app: a trivia game called “Heads Up”. The app is featured on Ellen DeGeneres’ Ellen TV show which is also produced by Warner Bros.
The Warner Bros produced game launched in 2013 and is obviously doing well almost two years on after launch, in part because you can keep buying new trivia categories to keep your game playing activity fresh. It’s also really intriguing to see a TV personality who is owning a top downloaded and top selling app and that the app itself is owned by their employer, the TV studio.
But looking at the overall App Annie stats, Warner Bros appears to be the only traditional media company with a top 10 app on the iTunes or Google Play store charts. Beyond Facebook, Instagram, and YouTube, game developers like King Digital with it’s line up of Candy Crush games, or Mojang with it’s Minesweeper game, are the winners on the charts.
App Annie Store Stats Top iOS apps for February 20th. Note only one traditional media company, Warner Bros, has a top selling app.
App Annie Store Stats Top Google Android apps for February 20th. Note only one traditional media company, Warner Bros, has a top selling app.
Microsoft saw Mojang’s success with the Minecraft game and wound up buying the company for $2.5 billion in September 2014. Big Fish Games which also appears on the App Annie Store Stats February 20th top apps chart for its mock gambling apps like Big Fish Casino, was bought by Churchill Downs last year for $885 million. The company is an owner of famous horse racing tracks like the famous Kentucky property Churchill Downs and also owns casinos and other gaming properties. Obviously, the company saw how gaming is dominating the world of mobile apps. I expect to see traditional media companies to buy some of these mobile game developers to enter this lucrative app market, which again just for Apple iOS apps sales alone was $10B in 2014. For example, just recently major TV and film studio Lionsgate invested in game maker Telltale Games, rumored to be a $40 million stake. Telltale also licenses TV show content to create games, for instance titles based on AMC’s “The Walking Dead” or HBO’s “Game of Thrones”. Tech news site TheVerge hints that Lionsgate will move beyond simply leveraging Telltale to make games based on their own content and push the game maker to develop TV series titles that are game like. Celebrities do just as well as media brands with mobile games: Glu Mobile, a game developer made $74 million from the Kim Kardashian : Hollywood mobile app in 2014 and now plans to license Katy Perry’s likeness for a mobile game this year.
Traditional media brands can license their content titles to game developers or develop in house; the latter approach may be harder to scale. The App Annie 2014 Retrospective reports that mobile game apps related to movie titles did well in 2014, and in “some cases extended the life cycle of the intellectual property (IP), fostering brand loyalty and keeping users engaged between movies.”
For instance, a game related to the animated movie Despicable Me ranked among the top 10 games by worldwide December downloads 18 months after the app’s initial release. Note that France’s giant developer Gameloft built the Despicable Me game by licensing the film content from Universal Pictures. ”Family Guy: The Quest for Stuff” appealed to show enthusiasts, but also attracted new audiences and was a top performer. Again the model here was that Fox partnered with San Francisco game developer TinyCo to create the popular game. App Annie believes the 2014 success of games based on media brands, “sets the stage in 2015 for more traditional media brands acquiring and monetizing mobile users through existing game structures refreshed with their well-known IPs.” (App Annie Index: 2014 Retrospective — Top App Trends of 2014)
Moving Media Apps Beyond Gaming
According to Comscore’s US Mobile App Report 2014, mobile app usage accounts for the majority of digital media time spent, at about 52 percent. Mobile apps drive the vast majority of media consumption on mobile devices - about 7 out of every 8 minutes Also of note is a majority of mobile app engagement comes from only a few select categories. So beyond gaming, media companies can also enter the app market by offering social networking (messaging) and radio / music apps, as these along with games, contribute nearly half the total time spend on mobile apps.
Media companies do not necessarily have to buy their way into the app market or license their content to app developers, they can build successful digital brands on their own. A good example is global media giant Bonnier who launched a line of “digital toys” called Toca Boca to find success in the mobile app market. In 2014, Bonnier reported 70 million downloads of Toca Boca apps just a few years after launch of the division.
The App Annie 2014 Retrospective notes that Disney The New York Times, and IAC Corp did very well in both app downloads and also revenues. Note these App Annie charts exclude game apps or game publishers. The full report can be accessed here.
App Annie 2014 Retrospective: Top non-game apps, and top publishers by app revenues.
Beyond gaming, social networking and chat apps, and music it’s important to look at how media brands are performing with their news apps. Turner Broadcasting’s CNN holds the spot for the top free news app on iOS, but is in the 4th spot on the Google Play store, while Yahoo News tops the Google chart but is absent from the top 10 on iOS. So it’s clear media companies have made particular investments in designing and marketing their apps to specific mobile operating systems and app marketplaces.
Buzzfeed and Fox are the two news apps that do very well on both major mobile platforms in terms of downloads, but compete against several new media start ups and news aggregators like Daily, Flipboard, and a few readers that pull content from the social news platform Reddit.
NBC and BBC are not top 10 performers on the iTunes store, but are on Google Play.
Interesting to also note in the news category that military news focused apps and police scanner apps are popular.
Finally, the top earning news apps in terms of revenues are from well known media brands charging you a premium to have mobile subscription access including Time Inc, The Wall Street Journal, New York Post, New York Times, and The Economist. In the case of The Economist, the company recently developed a morning news briefing called “Espresso,” which now is the #8 top earning app on the Google Play in the news category. This is a separate experience from the main Economist app, and it’s designed for the busy executive who needs a single place to get briefed on the day’s news.
App Annie Store Stats Top News Apps for iOS - February 20th
App Annie Store Stats Top News Apps for Google Play / Android - February 20th
The Media Briefing also took a look at UK app store results to see how the UK media brands are faring in the market, and it’s worth a read. Their main take away - The Guardian app is the fourth-most successful non-game app in terms of revenues the UK but mainly due to the success of in app purchases for The Guardian’s crossword puzzles. The Media Briefing found this ironic as News UK and Telegraph Media Group have a much greater commitment to paid content but generate little revenue from their news apps.