Making money from content is difficult. One of the other hats I wear is being non-exec Chairman of one of the leading mobile games and apps store service providers - Selatra Limited (
www.selatra.com) . In this capacity I have front seat visibility of the some of the challenges on the coal-face of making money out of content. Questions are often raised as to why Apple can make such a success from their app store, while every other mobile operator is struggling to make content pay. But to me it is a clear case of
Complexity and
Investment.
Challenge 1: Complexity Versus Simplicity
iPhone apps are not inherently any better or smarter than Java based apps, or other smartphone apps, but they have the advantage that iPhone developers have a very clearly defined problem space. They are only developing for a single device, with high inherent functional capabilities and well understood interfaces. And they are only managing a business relationship with one customer. Whereas java app developers are developing for a bewilering away of hundreds of popular devices, each with a distinct screen size, key layout and inherent hardware capabilities. They are also trying to sell to hundreds of different operators, each with different terms and conditions and business models. Finally, the overhead of re-spinning a java application for hundreds of phones is significant, and this doesn't even include the challenges of testing your app on each phone (most of which you will probably not have access to!).
Challenge 2: Investment
No service is going to be successful without focused intelligent investment. While Apple may have a starting advantage with the inherent simplicity of the model described above, they have also put their money where their mouth is. Massive worldwide investment in Apps as the raison d'etre of the iPhone is yielding results. Compared with this, most SP's have invested practically nothing in making content a real contributor to their bottom line. For all the bold statements made in annual reports, most SP's invest pennies in a long-term apps driven strategy. And nothing good comes without serious, consistent investment
So operators need to completely revisit their apps strategy if they are going to avoid being completely eclipsed by Apple. And its all about tightening up the value chain to make it more efficient and effective. Step 1 is to build much tighter partnerships with the device owners to ensure user access to apps is seamless and painless. Step 2 is to build a consistent approach to delivering app stores across multiple operators, so users don't have to relearn the process every time, and content providers don't have to work to a different business model with each operator. Step 3 is to invest in consistent marketing of Operator Apps, so the user base begins to believe that Apps can credibly come from a non-iPhone source.
Thats the challenge!
Posted
10-02-2009 12:37 AM
by
Martin Creaner