News publishers are making more and more content available via mobile, and the seemingly ever-increasing development costs of apps are under scrutiny. We all realise that we need to change and offer multi-platform products. The trick is how to do so profitably.
(Rupert Murdoch reportedly invested US$30 million in News Corporation’s iPad app, The Daily).
In the United Kingdom, there are various newspaper groups trialling new payment models. The U.K.’s Daily Mail made its “Mail Online” app free to access for the first 60 days originally, after which it would be monetised solely through subscriptions. Payment options were set at £4.99 (US$8) for six months or £8.99 (US$14.50) for a year. At the time, they said that the functionality and value of apps make users willing to pay for them.
However, it’s also now trialling other business models such as advertising-funded apps, with its third-party app publishing strategy. The company is apparently preparing to drop the 59p (US$1) download fee for its iPhone game Bamboozle in favour of ad funding.
The Guardian was one of the first publishers to launch an iPhone app in December 2009. Costing £2.39 (US$4), it has had more than 200,000 downloads since. However, last January, they switched to a subscription model, charging users £2.99 for six months’ access or £3.99 for a year. The switch followed a survey of more than 10,000 users and was accompanied by an improved version of the app, offering more video and audio content.
At my company, the Telegraph Media Group, we continue to look at all options, holding focus groups to help guide next steps. We have experimented with different pricing models including sponsorship across our iPhone and iPad apps. Our iPad product, currently free, is sponsored by Audi and has been downloaded 120,000 times since it was launched last September. We also tested a paid-for model through our Telegraph Fantasy Football app, which costs 59p (US$1) to download.
The Financial Times applies the same hybrid model it operates across its print product: subscription and advertising. Its digital subscription model — which allows access to its Web site and iPad, iPhone and Android apps — costs £215 (US$350) for an annual pass. Subscription levels have reached over 200,000.
The FT says they’ve seen a big jump in demand for mobile advertising, with about one-third of client briefs asking for its inclusion. Some 20% of new digital subscriptions each week come from mobile. They reckon that in the next two to three years, they could see half of digital FT readers accessing content through mobile.
All this is very interesting, but we must be careful not to confuse the market completely. It will all settle down and clear strategies will emerge on what works and what doesn’t. To some extent, I guess we need to hold our nerve and press on with what we believe to be the right model for our own individual markets. However, determining what that actually is, has to involve research, observations, experience (however limited it may be at present) and a firm belief that our products are worth the time, focus and investment. They are! Mobile is still an emerging space and will be for a while, but there are now clear signs that mobile publishing is worth more than initially anticipated.
Download figures and subsequent user behaviour led The Guardian and Daily Mail to believe they had underestimated the value of the mobile app market. However, we must ensure that confusion does not cloud our overall messages to readers. At the end of the day, we want them to read news, be entertained and interact with us using their mobiles, tablets and desktops and in print. We all need to keep our minds focused on how best we can achieve this. Experimentation may be part of all this. But but remember the user experience, too.