Mobile: Paying for functionality in news apps

The RevenueTwoPointZero event happened on Saturday in Washington. This is the report from the mobile team.

Our solutions for monetizing the iPhone are based on existing technology but an emerging audience. The current audience may be small, but it’s clearly growing. Mobile remains new, so it offers opportunities to pursue revenue strategies that may not have worked on previous platforms.

On the internet, information famously wants to be free – that’s why we don’t believe in micro-payments or subscriptions. Mobile users may not be willing to pay for content either, but they are buying iPhone apps that provide features to customize content or deliver new utility. So we propose offering a suite of low-cost features to enhance the experience of content consumption — rather than charging for the content itself.

  • The concept: Generating more revenue from mobile applications lies in developing more elastic mobile apps. These would need some form of graceful degradation and enhancement based on free vs. paid.

  • How does this look? There’s a “lite” version of each application and a more feature-rich version for payment. If we’ve learned anything about online, it’s that if we don’t charge now, we can never charge in the future.

  • The advertising experience: Envision rich ad experiences, perhaps with video interstitials.

  • Info-snacking: Rather than try to direct readers we encourage “information snacking” to make it easier and more fun. We would consider building applications with a “half-life” – an app for a specific event or occasion, for example. This would have revenue potential by driving audience and creating new environments for advertising.

How do news organizations get there?

Enable and facilitate impulse buys: A big part of making mobile apps generate revenue surrounds the issue of enabling simpler impulse buys. Facebook sells icons. iTunes is simple and fun. Airlines sell snacks on flights for small fees. A news app could sell event tickets. We would encourage exploration of what works based on audience reaction to the apps. Nothing should be off limits if it could generate new (and not just incremental) revenue. Any new app would need to show how it pays for itself before development begins.

Niche and meta-apps: One key to moving on this plan would be to create standalone apps based on reusable code. We would want to write the main software once and reuse it. This saves development time, creates standards, and allows news organizations to catering to specific audiences (one example would be sports team apps) that can become a gateway to other content and apps.

The proposal:

1. A new kind of banner ad

News organizations should restrict smart phone apps to a very limited, streamlined, clean interface, maximizing minimal space and making the biggest impact. Ads would slide into a bottom-third view, telling a simple story through brief sequences, then prompting interaction to learn more.

2. Free “lite” version of smart phone app

This would serve local news in a traditional macro feed and might also utilize the same basic code to serve micro niches, for example Chicago Tribune News Reader and Chicago Tribune Sports Reader.

The app would include some robust and easy-to-use features in addition to the typical news feed users would expect, including:

  • Content that’s geographically tagged. We need to begin building in meta data like coordinates and azimuths now for full future versions that would work with all GPS-enabled phones.
  • Links to purchase event tickets would appear with related content, prompting easy one-touch purchases.
  • Search advertising content as well as editorial content – it’s all news to users.


3. Expanded-value version of app (pay model)
A second version of the smart phone app would have a small fee. Users would pay a one-time access fee for richer functionality – they would not pay for content, just the enhanced features. For separate smaller fees users could buy each of five functions; they could buy access to all five for a group price.

The pay-to-access features would include:

  • imageOff-line reading: The ability to download content that’s normally online-only for use when you don’t have web service. This would allow a user to take content with them on a plane or subway for example. Content might expire after a limited time.
  • imageEnhanced geo-tagging features: Helping users find what’s NEAR ME now would connect them with news and businesses as they move through the world. This would open a slew of new experiences users could have with heightened awareness of the news (weather, traffic, events) and commercial (discounts, sales, timed events) happening around them.
  • imageArchive/export: Users would share permalinks in a simple process (through email or a reading list of some kind) for all the content they browse on their device. It’s a way to link the mobile and desktop experience.
  • imageCustomization: Organizing the news the way users want to read it and not so much about setting color prefs and skins (but it’s that too).
  • imageText-to-speech: What better use for a mobile news device than to combine up-to-date news with audio player functions? Perfect for walking, running, subway, trains, etc. …

If we’ve learned anything about online, it’s that if we don’t charge now, we can never charge in the future. While we don’t believe the iTunes model will work for content, we do believe it will work for features that enhance the experience of using the content.

The mobile team: Chris Courtney, William Couch, Steve Dorsey, Tyson Evans, Kaitlin Yarnall

About Matt Mansfield

is a Partner at MG Strategy+ Design.