At CTIA last week, I helped lead a session on “Making Money” at WIP JAM run by my friend, the mobile machine, Caroline Lewko. Anyways, a couple interesting notes came out of our discussion that I want to share – the question is whether I partner with an operator to distribute my application?
|Direct to Consumer||Partner with Operator|
|Volume||100s of K||Millions|
|Money||Not guaranteed||Guaranteed but painful rev-share|
|Time||~3 Months||6 to 18 months|
This simple table actually represents quite a bit of learnings. The most controversial row is volume – app stores have definitely made it a lot easier to achieve millions of installs but most developers still get stuck in the 100s of K of installs.
Most interesting is with revenue, many of my friends at many of the large mobile game publishers are struggling with the iPhone and other “democratized” app stores. The problem is, with carriers, they have guaranteed revenue since they have guaranteed placement – with the app store, there is no guarantee, they could spend 3 months of dev time, money on licenses and not achieve an ROI. This high-risk distribution avenue doesn’t immediately suit well for the traditional “tight margin” mobile game publishers.
And as you would expect, working with operators takes a lot longer (and a lot more money) than most people imagine. Most of this is because of the painful requirement of having to port to all their phones – I fully expect this to change since there has been increased focus on the high-end.
One final note, sort of the VC pain, how many mobile companies do you know that make millions a year that do not require operator partnerships (very few) – that’s why I’m an industry fan of the lifestyle business.
- Why I’m Excited About Google Glass?
- Context Is a Layer and Not a Category
- Sales 2.0: The Bottoms-Up Sales Model
- Is UX Going to be Commoditized Next?
- To Win Enterprise, Target the Consumer
- Using a Chromebook for a Week
- Android (and the Tab!) in the Enterprise
- Ad Learnings from Recipe Search
- CPA Advertising on Mobile
- Enterprise Mobile Is Hot!
- Network Responsibility
- In-Door Mapping
- The Social Network
- Using a Mobile Phone to Drive Behavior Change
- Apps vs. Web Apps
- Understanding Developer Psychology
- Are Batteries Improving?
- Over the Air and Emerging Markets
- Are Platform Game Lobbies the Next Social Graph?
- Are Plugins (and Flash) Going Away?