Economics of apps 2010.06.17
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The Economics of Apps
Volker Hirsch (@vhirsch)
Mobile 2.0 Europe - Barcelona - 17 June 2010
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Mobile Apps...
... can be a bit of a nightmarehttp://fraizochocolat.wordpress.com/2010/02/
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You do everything right...
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... on the inside...http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg
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... on the outside...
http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ
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... and on marketing
... and of course with Carriers
http://www.ruralmarketingservices.com/images/marketing_road_sign.jpg
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Something is still missing...
http://www.latest-wallpaper.info/free-money-wallpaper.htm
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The Discovery Dilemma
http://www.lanfaxlabs.com.au/images/all-detergents-3-IMGP3918.JPG
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THe $ Dilemma (carrier model)
total revenue
after VAT
after carrier
after distributor
after porting & QA
after License
after production
after overheads
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THe $ Dilemma (carrier model)
2
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THe $ Dilemma (app store model)
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THe $ Dilemma (app store model)
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The Mobile Web then?
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And again: loads of them...
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What is Social?
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Social refers to the interaction of organisms with other organisms and to their collective co-existence [...]
Source: Wikipedia
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http://commons.wikimedia.org/wiki/File:Bhgs_crowd.jpg
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And so what ???
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1,700,000,000
4,600,000,000
1,800,000,000
2,250,000,000
Internet users (PC, Mobile, Web Cafe)
unique credit card holders
tooth brushes in use
mobile phone subscriptions
475,000,000circulation of newspapers
825,000,000registered cars
4,000,000,000FM Radios
various sourceshttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg
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Prof Dr Karin Knorr-Cetina, Sociologist
Concept: Object-Centered Sociality
https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg
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You need Context!
http://flickr.com/photos/nolifebeforecoffee/124659356/
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My app a Social Object?
http://adsoftheworld.com/media/print/lego_video_game?size=_original
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It always was!
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Let’s recap: Social is interaction in context
Object
http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg
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It’s about Engagement
- People Interact by nature.
- Fans can be Fanatics!
- An app and the environment in which it is set matters to its fans.
Apps are powerful social objects
http://www.windsorfinejewelers.com/media/catalog/product/cache/1/image//t/a/tacori-platinum-round-diamond-semi-mount-engagement-ring.jpg
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What
- Create Fanatics.
- Provide avenues for people’s passion.
- Incorporate people’s strongest community: their friends!
- Keep it in context, i.e. in the app.
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How
- High-Scores (Reward) but make them customizable (Relevant).
- Connect to the community (Avenues of Passion).
- Person-to-Person Challenges & (Playful contextual interaction).
- Awards / Rewards (Fanatics).
- In-app transactions & Virtual Currencies (Contextual Monetization).
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Source: Bain Consulting
74% of all buying decisions are made on a friend’s recommendation
http://www.cartoonary.com/madagascar/images/madagascar-marty-alex-gloria-melman-penguins-julien-2048x1536.jpg
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Discover
Engage
Monetize
Cross-promotions, Friend Finding, and Social Network Integration let people connect to each other and get the word out.
Increase installed base
challenges and achievements engage users and let them share their app experience.
Increase user activity
Downloadable content and in-app currencies drive additional revenue streams
Increase revenues
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Discover
Increased installed basefrom more people downloading the games
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Increased activity in your app:people use it more often
Engage
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Increased revenuesfrom additional revenue streams
Monetise
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123,296,966,069,453
The Law of Big Numbers
One last thing:
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Connect to any social network
* Already integrated
**
*
*
*
** Scoreloop is the official partner for mobile gaming
*
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don’t forgetthe “other”
smartphones!
And maybe the other folks are noteworthy, too...
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Core Social
- Social Tools (High-Scores, Player-to-Player Challenges, Recommendations [using any source available], Awards & Trophies.
- Full virtual currency (supports in-app purchases, item downloads, dual currency)
- Multi-platform: iPhone, Android, BREW, Symbian, MeeGo, RIM, Web.
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Image Creditshttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg http://gapingvoidgallery.com http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg http://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpg https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg http://www.easy-access.com/garagelo/coloring/tools.gif http://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htm http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ http://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpg http://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpg http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg http://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpg http://adsoftheworld.com/files/images/video-game.jpg http://www.thealarmclock.com/euro/images/flirtomatic.png http://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.png http://villageshow.co.uk/assets/images/trophy.jpg http://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpg http://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpg
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@vhirsch
http://vhirsch.com/blog
+44 7843 599 678
http://scoreloop.com
Thank you!