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BREAKING NEWS & VIEWS
People Makes Mobile Pay…Two WaysThursday, May 28, 2009 Can the mobile platform do for digital content what the Web couldn’t? Can a diminutive smartphone (of all things) re-create the  experience of print as well as its combination of subscriber fees and ad support? In most cases, mobile users have been offered a stark choice between fee-based content products with no advertising or free apps and mobile sites that run ads. People.com editor Mark Golin doesn’t buy it. “It is an interesting thing. If you are charging, you can’t sell ads. I don’t understand where that came from. You buy a magazine; there are ads. There are ads on cable. You buy a movie ticket and still see ads.” Last week People launched its “Celebrity News Tracker” for $1.99 in the iPhone/iPod Touch mobile App Store. As we recount in our interview with Golin in next week’s issue of min, People’s decision to charge for its app puts a small stake in the ground for the value of premium brands. The direct revenue from a fee-based app is incremental at best. Apple changed the game for mobile content last year when it offered developers and publishers in its store a straight 70% cut of gross revenues from an app. Nevertheless, even free versions of iPhone apps have a limited distribution potential. Condé Nast Digital’s Style.com app is considered a success at 200,000 downloads in less than a year, and it costs users nothing. Even if People’s app sell hundreds of thousands of downloads, the publisher is realizing only a one-shot fee up front. Until Apple changes its billing structure later this summer, fee-based apps only charge once at the point of purchase. Ongoing revenue off of the same user needs to come from a recurring ad stream. Unilever is supporting the People app launch with integrated ad units. A page view is a terrible thing to waste when you are a brand like People, which racks up 750 million a month online and about 12 million to its existing mobile Web page. Users are addicted to photo galleries and the celebrity database, so People will insert interstitials and banners as users rifle through the pages. In fact, one theory regarding fee-based content is that even when users pay a nominal up front fee they tend to use a site or application more often and so become better audiences for the advertiser. Mobile is also a potential platform for magazine branded video and pre-roll advertising as well. In this first version of the Celebrity News Tracker, Golin says the company decided to stick with text and images. Mobile demand for video is small compared to the celebrity hunters’ insatiable thirst for pix, pix and more pix. If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com
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