18 September 2009

'Tangible' Mobile Apps Will Sell, Outing Advises

News publishers expecting to make money online will need to figure out how to offer something tangible -- and mobile represents big-time opportunity, especially for phone applications, advises veteran digital media observer Steve Outing in his latest Stop the Presses column.

Outing has long believed that non-niche news content is better off being free, supported by advertising and other revenue streams. But after talking recently with two mobile gurus, he said, he realized that people seem to prefer to spend money on things they can "keep." A phone app may not be a physical thing, but it's there on your phone every time you turn it on, he writes. It's "yours."

Consider the iPhone, for which Apple CEO Steve Jobs boasted last week that 1.8 billion apps had been downloaded in just two years. An estimated 13% of those apps carry a price tag, according to a February 2009 presentation by Pinch Media; the figure is likely higher today.

For years, Outing points out, publishers had no trouble selling a physical product, the printed paper, which readers got to keep as long as they liked. Efforts to charge for the intangible online product, in contrast, have nearly all failed miserably.

Perhaps, he says, one of the main reasons is that when online news consumers were asked to pay for news, many felt that they weren't getting anything, because they received nothing tangible -- just information (most of which is free online anyway).

The same goes for general news content on mobile phones, Outing says. But, he added, "Fortunately, mobile phones now have something that people will buy: apps. And mobile is poised to become the next growth area for content publishers."

Publishers, he says, should create an iPhone app (followed by apps for other devices such as Blackberries) that offers a better news experience than viewing a website on a phone's browser, as well as other valuable features. And they should charge for it.

"Non-niche, non-unique digital news has no monetary value to most readers. News providers, if they are to make money directly from consumers in the online and mobile worlds, need to come up with non-ephemeral offerings," he says. "The key to getting paid for news in digital format is that what's being sold is not fleeting."

For instance, he suggests:

* Paid news memberships. With a membership to a news organization, you get something -- perhaps including a membership card (physical or digital) to be used repeatedly to get special privileges, such as discounts from advertisers or access to premium content.

* Access. Charging people to read the regular column from a star writer, for instance, may not work, as The New York Times discovered during its TimesSelect paid-subscription experiment. But publishers might take a hint from Fox News commentator Bill O'Reilly, who offers a paid "Premium Membership" Among 16 extra benefits, it includes special access to O'Reilly, including "preferred e-mail" that gets your message bumped to the front of the queue, and a weekly live chat during which Premium members get to ask O'Reilly questions.

* Special Web applications for PCs. If apps sell so well on mobile phones (albeit at generally low prices), news companies may want to consider selling applications for the PC that offer consumers an enhanced online news-reading experience. Readers get to "keep" the software.

More thoughts and ideas can be found in Outing's column, available free for a limited time.

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