Impact of Fourth Generation Computers

Smartphones for Smart Journalists

Today’s Subjects

The Big Picture4G Computers - Their new role in journalism

Lessons learned building native apps for 4G Computers...for newspapers and news channels

Smartphones for Smart Journalists

The Big Picture

“Smartphones” vs. Fourth Gen Computers

A Blackberry is a smart phone.

The iPhone, iTouch, Androids, and iPads are 4G computers. And they’re only the beginning.....

The Big PictureTerminology

Primary use intention differentiates

Computing Primary Communication Primary• iPhone • Blackberry• iTouch • Etc.• iPad• Android class

The Big PictureCurrent 4G Computers

The Big Picturethe emergence of the 4th generation

The Big Picturethe emergence of the 4th generation

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Morgan Stanley

• highly mobile

• lack a keyboard, mouse and power cord

• Internet connected

• Contain profitable application ecosystems that

often replace traditional (profitless) web sites

• Gartner says >50% shipped by 2015 w/b touch screen

The Big PictureWhat makes 4G computers different?

• Apple products - Shirt pocket screen to television

• Android products - Shirt pocket screen to television

• Maybe Microsoft products

• Maybe, maybe Nokia products

• Sony, Samsung, Palm, etc. are likely also-rans

The Big PictureFuture 4G Computers

Practically speaking,

Today its Apple and Google!

Major content owners are building products for both.

The Big PictureSuppliers of 4G Computers

• kill netbooks

• reduce utilization of lap/desktops & shirt pockets

• dramatically increase the overall use of computers

• outnumber personal computers in use by 2013/4

• will soon become the primary access to the Internet

The Big Picture4G Computers will most likely....

• Average adult uses a PC 1.5 hours/day

• 4G computers are available 18 hours/day

• PCs were often shared....not 4G computers

• Content consumption by shirt-pocket 4G computers will experience dramatic growth --- via apps, not browsers or web apps

The Big Picture4G Computers increase media consumption

• It’s a bird, its a plane, its a newspaper?

• Best yet for media consumption

• The perfect traveling companion for adults & kids

• A business & recreational reader

• A teenager & gamer’s delight

• Yes, requires yet another/expanded application

• Take it very seriously

The Big PictureAbout the iPad

Adult reaction:• “oh no, not another device”• “where’s the keyboard, where’s the mouse?”• “how can I manage another device?”• “you mean now I have buy another device?”

Kids reaction:• “way cool.....”• “Dad, I need this now....”


The impact of the 4G iPad on development starts


The Big PictureAbout the iPad - You think its big today?

The Big Picture

A Significant 4G Issue:

Accessing Content on 4G Devices

3 ways:

• Native applications

• Traditional web sites

• Mobile web sites (or WAP sites)

The Big PictureAccessing Content on 4G Devices

Native applications

✓ Programs written in native languages

✓ Superior user experience

✓ Expensive, unless compared to previous mediums


Traditional web sites

✓ Difficult to use on shirt-pocket screens

✓ An “ok” user experience

✓ Render nicely on tablets

✓ Flash doesn’t work on Apple devices - HTML5


Mobile web sites

✓ Very poor user experience compared to native apps

✓ Least common denominator versions can reach most

smartphones

✓ Given a choice, users “always” select native apps


The bottom line:

Native apps win with consumers (today)

because they deliver a superior user experience.


The Big PictureNative App Growth on 4G Devices

2009 2010 estimated 2013 estimated

29.5

6.84.2

21.6

4.52.5

Native Application Sales and Revenue Estimates

App sales, in billionsApp revenue, in $billions

Apple, Inc. is today leading technology

✓ Because they listen best to consumers

✓ Because everything they deliver is profitable, they

have enormous reserves

✓ Apple products deserve serious responses

The Big PictureThe unquestioned leader in 4G Computers

Lessons Learned

building apps for 4G Computers

Subject 2

Why have 4G native apps been so successful?

From the user’s point of view......• Ease of use, superior content experience

• Price - less than a latte• Provide instant gratification

• Fulfill basic, everyday needs• Instantly informative - keeps one “in the know”

Native Applications

Why have 4G native apps been so successful?

From the content owner point of view......

• Increasingly where the eyeballs are

• Take advantage of expanded media consumption

• An opportunity for additional ad revenue

• An opportunity to return to a subscription model

Native Applications

• 30,000+ Android apps

• 180,000+ iPhone/Touch apps

• 3,500 iPad apps

• 4 billion downloads

Native Application Stats

Downloads are a prerequisite to retention, but....

“Retention” drives revenue

Attention to downloads has been excessive(today’s equivalent of “how many hits....”)

Native Application Tips

The most important element of an app:

The User Experience

Because the user experience drives user ratings,ratings determine retention, andretention drives revenue.


Get these 3 things right

The #2 & #3 most important things about an app:

1. User experience2. Responsiveness - mobile users are impatient3. Reliability - they hate repeated crashes

All three determine retention & revenueand can enhance or damage brand value.


How much should you spend on an app?

Just enough to ASSURE.....

• A first-class user experience

• A responsive app

• A reliable app


How much should you spend on an app?

$40-$80k for most apps is a ball park range

Too expensive? Lets follow the numbers.........


Native App Economics

Assumptions: Development Cost - $60,000 Average monthly users - 100,000 Monthly hosting cost - $1,500 Page views (with ads)/month/user - 72 CPM - $10 Percent of inventory sold: 30%



Per User Results: Annual revenue = $2.59 Annual hosting = ( .18) Amortization of dev cost = ( .20) Gross Profit = $2.21

Times 100,000 users = $221,000 or 369% ROI



THIS IS AN INVESTMENT WITH A HUGE RETURN,

NOT AN EXPENSE TO BE MINIMIZED

i.e., PENNY-WISE IS TRULY POUND-FOOLISH


Attracting DownloadsGreat user reviews are the most important way to

generate downloads.

App store ratings are key


Native Application Tips Tips To Attract Downloads

User Rankings of 4 iPad News Applications

Other tips To Attract Downloads• Build a great app - Users cannot be fooled

• In-app requests for reviews can build ratings

• Good apps get Apple’s attention & sell iPhones, etc.

• Solicit trade press reviews

• Promote in your traditional publication

• Promote on a jumbo-tron in Times Square, etc.



Retaining Users & Expanding Usage

Notifications - a potent traffic driver

• Pop-over screen messages (user opt in)

• Optional sounds

• Icon badges are persistant


Tips To Retain Users & Expand Usage

• Build a great user experience (your competitor will)

• Weather

• Sports scores

• Sharing features


Users want tabular text listings of articles &

thumbnail images for everyday news scans.

But they expect video when news breaks.


Design

Average graphic designers can design screen

appearances

Device professionals should design the U/E

Assure collaboration


Typical Schedule Phases

• Design/Approval (brand vs. UE)

• Programming

• Testing (allow 2 weeks for “burn-in” testing

• Allow 2 weeks for Apple approval


Monetizing Applications with Ads

Online ad inventory is infinite.CPMs will continue to drop.

Google captures 67¢ of every online ad $Don’t depend on ad revenue.

Did the game change yesterday?


Monetizing Applications with Subscriptions

Subscription revenue is a must.

iPad apps will blaze the trail.

Web sites too must be paid (iPad).


Monetizing Applications

using A “freemium” Approach

• Free content builds traffic base & promotes the paid version

• Watch & experiment


Monetizing Applications

Whatever approach you adopt, distance

yourself from the web business model.


• Retention rate s/b 40-50%

• Sessions per day - 1.5 to 2 (45-60/month)

• Minutes per session - 3 (text) to (video)

• 135 to 720 min/month (web = 51 min/mo.)

• Android : iPhone Ratio - 4:1, but changing

Native Application Expectations

• News will increasingly be consumed on screens

• News media must transition to paid access

• 24/7 coverage & video now essentials

• User experience determines winners & losers

• Media companies must invest heavily in screen technology as they still do in print equipment

Summation

Technology

Impact of Fourth Generation Computers