In my previous post, I predict that the news industry will follow a similar trend as has digital music and digital video, evolving through a massive delinearization of content on mobile. The success of Yahoo News on the web, cumulating with the facts that six of the top 10 news applications are aggregators on Google Application Store, as are five out of the top 20 apps on US appstores, confirm this trend.
This evolution is driving by the mobile sector and is in its early stage, led by some very well financed startups. For the moment none of the innovative and major usual suspect stepped into this field, but we can bet if the trends continue that tech industry leaders such as Google and Facebook will grab this opportunity.
What does news delinearisation means for news content publishers on mobile devices? Is it a threat or an opportunity? How can publishers capitalize on this trend?
Even with the success of You Tube, traditional TV continues to be watched and new TV channels successfully appear. Similarly, iTtunes and Pandora are successful, all the while music CDs (or CD-length digital albums) continue to be purchased. We are not in a Manichean world, and vertical applications under famous brands such CNN, New York Times, or less famous but as popular like Metro do continue to grow and succeed, even with the success of mobile news aggregators. Nevertheless, as we’ve seen in music and videos, these types of mobile news applications are significant game changers.
Let’s take a look at a complete view of the news delinearisation trends by exploring the different layers of the mobile value chain.
News application penetration rate
Based on Nielsen data, a US mobile user has on his phone 41 applications (Nielsen Study 2012). 66% of mobile users in France to 75% in US launch applications every day (source Google-Ipsos our mobile planet). User in the US and in France are using the twelve same applications within a month (nine in Italy and eleven in Germany)(source Google-Ipsos / www.ourmobileplanet.com). Applications publishers are running in a highly competitive environment a) to be downloaded in the middle of the one million applications on store, but b) to be use at least on a monthly basis!
If we focus on news application, in the US, out of 125 million unique visitors of mobile web or mobile applications, 95 million have launched a news application in August (Comscore). 76% of the users within a month open at least one application of news. With these ratios, and keeping in mind users open only 12 applications per month, it is easy to deduce that smartphone users are using on average one to two news applications maximum. Based on those figures and with this specific focus there is no doubt that news aggregators are in direct competition with any vertical news brand as well as they are with any applications.
Usage generated by news aggregators demonstrates that consumers are starving for news. There is strong correlation between the number of appropriate news articles offered and the number of pages views and/or minute spent by the user. News Republic on Android (a news mobile app produced by the company I manage called Mobiles Republic) is doing on average almost 200 pages per unique visitor per month, up to 400 pages in certain countries (internal statistics). Based on Comscore October figures and assuming their time indicator is accurate, Feedly news aggregation application is used 126 minutes per unique visitor per month, Flipboard 64 minutes, News Republic 102 minutes, vs CNN 57 minutes, the Washington Post 31 minutes or New York Times 49mn. This two to five times difference between mainstream application and aggregator illustrates the potential market of news consumption. It also points to a major advantage proposed by aggregators.
Distribution & value chain
Therefore aggregators are strong partners for mainstream news publishers to potentially gain on brand awareness as well as traffic. In fact, behind the scene, the reality is very different.
– Brand awareness: Publisher brands appear on each article of an aggregator. For the non-leading publisher it is clearly an opportunity to gain brand awareness, and to build in publisher-recognition between the reader of the article and the brand. It is a way to be known by readers that would have never heard about the publisher or have heard about it but never had the opportunity to read the article. The question remains open for top tier brands. In all cases, the prerequisite is to have an aggregator respectful of the brands as well as have well configured RSS stream.
– Traffic: Due to the background of the web, publishers believe RSS feeds generate major traffic from mobile. Unfortunately this is not the case, and is a misunderstanding by many publishers. Experience in Europe and in the US, including with such famous brands as Le Monde or USA Today, demonstrates a click through rate between 0.8% to a maximum of 5% with an average below 1%. In another words, an aggregator who takes RSS feeds ̶ or worse crawls the web ̶ keeps 95% to 99% of the value chain. A clear hemorrhage for the news publishers that Josh Marshall, CEO of TPM in his article has underlined (http://talkingpointsmemo.com/edblog/–100456).
Aggregators such Yahoo News and Sina are leading players on the web, and are on the way to becoming relevant players in mobile news distribution. Considering that mobile users will at least double, and usage per user is increasing by 50% (US figures based on Comscore), it is realistic to forecast a strong leadership for content aggregators. In addition to its being an inevitable trend, it is also a major opportunity for vertical brand media to address a new type of user, increase awareness, and to maintain a strong presence. In the mobile world, in order to help ensure that a publisher’s valued content is not be ripped off from the value chain it is vital for the publishers to control where their RSS feeds go, and how they can build financial value on top of that brand value. Within this perimeter, aggregators are the best and most powerful allies of the vertical news brands.