Two big stats leaped out from the recent Deloitte Mobile Consumer Survey: firstly, the fact that 31% of mobile users say they haven’t downloaded any new apps in the last month, and secondly, that 90% claim they have never paid for any apps.
People now consume more media through their phones or tablets than any other channel – and the masses still want and need apps. It just appears – from this survey, at least – that they don’t want many, and they certainly don’t want to have to pay for them.
On the first point – our app-athy for apps: Paul Lee, Telecom Media Technology Head of Research at Deloitte, explains that what is happening is a natural saturation in the marketplace:
“When smart devices and app stores were new, people downloaded lots of apps because they were figuring out which ones worked the best for them. Now, the ecosystem is mature. Consumers have settled on their app choices and have less need to download new apps regularly, particularly if they stay within a device ecosystem for upgrades.”
So how does this affect the operator opportunity?
Earlier in the year we published independent research that demonstrated operators would need to reimagine their Over The Top (OTT) strategy, if they wanted to successfully (and profitably) engage with digital service providers. We recommended, based on the findings from consultants Northstream, that operators forget the status quo: unprofitable ‘branding’ relationships with OTT goliaths e.g. Facebook. We directed operators instead to target multiple partnerships with smaller, niche OTTs for a small projected profit per partner.
In other words: Multiple players X Modest revenues = A business case
At the time we got some feedback to the tune of ‘but what’s the point in enabling relationships with the smaller DSPs? No one’s downloading new apps anymore anyway?’
Well, that might be overstating the case just a little bit. People get bored – just look at the numbers leaving Facebook, our de facto social network, for alternative ‘up-and-coming’ social network playgrounds for example. Assuming that the major DSPs and apps have got this market wrapped up is foolish.
So, how can operators help?
For a start, they have a powerful role to play in user acquisition. The sheer volume of apps available now, and the hit-driven nature of the app stores, has made it harder for developers to gain visibility for their new releases. Big brands have enough room in their budgets to cover the costs of installs and incentivizing in-app purchases, whereas smaller players do not have the same reach.
Operators, however, have the brand recognition, marketing power and deep pockets to drive acquisition. They can act as “gatekeepers”, bankrolling marketing and advertising campaigns to ensure visibility across the relevant app platforms, as well as cross-promoting apps as joint services to their own subscribers.
Secondly, they can help app providers to personalize the app experience, as they start to look to retain and monetize users. With real time data behaviour insights – a holistic view of who the customer is and how they’re using the phone, rather than just the app – app providers can ensure that their services can be personalized and optimized, in response to constantly changing user profiles. Being ‘context aware’ ensures that the user gets to the point at which they transact repeatedly, and in a meaningful way, with the app.
Finally, they can help monetize apps. Popularity is great but it’s profits the DSPs want. If you don’t believe operators have a role to play here, just look at the work being done by China Telecom. They are a company that woke up to the opportunity offered by new Internet companies long before their counterparts, meaning they – and their partners – are now reaping the benefits.
So, operators need to see app-athy as a big app-ortunity (app-ologies for the puns). With powerful infrastructure, existing subscriber relationships, and deep pockets, they have a major role to play in this new environment.