Andrew Seybold wrote a
great piece on FierceMobileContent this morning bemoaning how Apple has taken us back to the future by creating their own version of the walled garden from the bad ol' days (not that long ago) when the only way to get content for mobile devices was through a carrier deck. The smartphone revolution was supposed to liberate us all from those proprietary, AOL-esque environments, and give us access to a universe of content available across devices... right? Well Apple apparently didn't get that memo and/or think that was a good idea, at all... and instead took the opportunity to Think Different.
The crux of the matter, and content owners and creators need to understand this, is that (big headline) Apple is not in the content business... at least not the way most folks think they are. As I'm very fond of saying (eyes roll collectively) Apple is in the reverse razorblade business. Despite having a huge ecosystem of 185k Apps, thousands of movies & TV shows and millions of songs, they run iTunes, as Peter Kafka recently
pointed out, as a pretty much a break even business. Content is a means to an end for Apple. Their interest is in creating a hyper-competitive market featuring proprietary, low-priced Apps and other entertainment content, that makes consumers excited about buying every form-factor of their high margin devices... and upgrading them regularly. You know all your friends who are crazy-passionate about Apple products? They've bought into this hook, line and sinker and now that they've spent a significant chunk of their disposable income on music, movies and Apps for their iPhones and iPads, (guess what?) they're never gonna switch to an Android device or a BlackBerry... but in the next year they'll probably spend what's left in their wallets on a new a sexy new razor to show off all those blades.
Content owners and creators who are hoping Apple will winnow the field of Apps or move prices higher in the market, so they may realize better margins, are deluding themselves. The model is all about you fighting for your very life, against hundreds of others, so Apple customers get the best content at the lowest price (why not free). They definitely don't want any one provider getting too much pricing power within their ecosystem. Oh yeah, and remember you're playing in Apple's sandbox... so that tech innovation leveraging their platform, that's giving you some competitive advantage... Apple might just decide one day to roll that out to tout le monde.
For some small companies this highly manipulated, low-price, high-volume market provides a real opportunity. Moreover, the sheer scale of it, the shopping experience and the elegant billing mechanism makes it an important place to play for all content providers. But iTunes is a very dangerous market in which to place all your bets. In terms of closed markets, content owners should ultimately be favoring those in which the owner's interests are more closely aligned with their own. More importantly, if we hope to see a healthier mobile content ecosystem, content owners and creators need to support, and advocate for, more open standards and markets.
This is a good sign, but I'm hearing from a lot of publishers of paid apps that sales in this channel are still insignificant and there's a lot of concern that it's over-cluttered with low quality CrApps. On the free advertising front I'm hearing more enthusiasm. Also, word is that the nascent carrier curated and billed tabs in the Android Market are performing very very well... let's hope that trend continues.
€mils
That said... there is light at end the of the tunnel. “Although the number of mobile gamers has declined in the past year, there is reason for significant optimism about the future of this market,” said Mark Donovan, comScore SVP Mobile and senior analyst. “As the market transitions from feature phones to smartphones, the dynamics of gameplay are also shifting towards a higher quality experience. As a result, we can expect to see a profound increase in adoption of this activity, both in terms of audience size and overall engagement.”
Note to mobile publicists... sometimes no news is good news or, at least, better news than news that makes your company look like its stuck in a time warp. Case in point, the recent announcement by Glu Mobile (GLUU) that it partnered (for the 6th time) with Warner Bros Digital Distribution to release a mobile game based on the film "Clash of Titans" had me double checking my Hellenic calendar to make sure it wasn't 2005, giggling a bit and, ultimately, questioning what's going on over there at Glu. In this day and age announcing a single-player, top-down fighter on Java, BREW and WinMo platforms is tantamount to a band announcing the release of a new album on 8-track... except not as funny or retro cool. Its especially weird considering recently appointed CEO Niccolo de Masi proclaimed that the company is focusing on new platforms and is attempting to wean itself from expensive licenses. I'd cut them some slack if it looked like Warner Bros was pushing the agenda, but that doesn't appear to be the case, considering they're scarcely mentioned in the release... and aren't quoted. Having just suffered through a particularly suckilicious 2009, in which they've been battered in the market and relegated to 2nd-tier publisher status, you'd think Glu would be doing everything possible to manage industry perception. But instead this game is being associated with images like the one at the top of this story, from week late coverage on Licensing.biz... which really kinda sums it up, don't you think? In this case they should probably have said nothing. Going forward, I think Glu needs to get a better handle on their messaging.
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