Why It's Time for a Digital Clearout

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Why It's Time for a Digital Clearout ISSUE 351 | 01 OCTOBER 2014 Contents thereport 05 Beyond music: Ello 07 Pinboard: Stats, deals, startups and more 09 Country profile: Spain Peak app Why it’s time for a digital clearout 2 ISSUE 351 01.10.14 COVER FEATURE Amid a sprawling number of apps entering the market, standing out and getting repeat usage are huge concerns for any new entrants” lumly and wearily we approach “peak app”. Apple announced at Why it’s time the iPhone 6 launch last month for a digital that it now has 1.3m apps on its GApp Store – as if that means anything any clearout more. The counter keeps spinning. We are Peak app numbed by numbers. We read daily about new apps raising WHEN DOES CHOICE STOP BEING A BENEFIT AND INSTEAD BECOME A MASSIVE INCONVENIENCE? IT APPEARS millions in funding and then it all goes WE HAVE REACHED THIS POINT WITH MOBILE APPS IN GENERAL AND MUSIC APPS SPECIFICALLY. THERE ARE, quiet. Meanwhile even the biggest music AND THERE IS NO NICE WAY TO PUT THIS, FAR TOO MANY OF THEM AND THE VAST BULK ARE JUST CLUTTER. apps are, years later, struggling to make IT IS TIME FOR A CLEAN OUT BECAUSE THE MORE POINTLESS (GENERALLY GIMMICKY) APPS THAT ATTRACT the numbers add up – like Shazam posting report a pre-tax loss of £5.3m for the second FUNDING AND QUICKLY GO NOWHERE, THE LESS LIKELY INVESTORS WILL BE TO TOUCH SOMETHING IN THE half of 2013. Just as there are arguably far FUTURE THAT IS GENUINELY INTERESTING AND USEFUL. WE ARE AT PEAK APP AND SOMETHING HAS TO GIVE. too many download stores and streaming the 3 ISSUE 351 Ostensibly this is great news for music, 01.10.14 COVER FEATURE but the report very unhelpfully does not break down the different types of music music services, there is a plethora of music apps. What we can presume here is apps fuzzing up the arteries of iOS and that this is tied to the rise of paid music Android (and BlackBerry and Microsoft) subscription services and the mobile- stores and it would be better for everyone centric approach of services like Pandora. if they were all flushed out. These are apps that only make sense Much has been written about the “attention economy” and the “tyranny of choice” as regards the numeric arms race in streaming and downloading. 20m songs, 25m songs, 30m songs, more. Numbers that, on paper, are impressive but in reality are just so much digital clutter. The apps world is not quite as bad in terms of volume but the use terms are such that getting a music app to stick – to actually be of practical use to someone so that they’ll use it again and again – is much harder. about short – but repeat – usage, such which suggest how quotidian certain apps The engagement dynamics are different as a journey planner app or Shazam: the have become or are on course to become. so standing out has more odds stacked information they have to provide can be Encouragingly, this is also growing. A year against it. served up in seconds and then the app ago, users opened apps on average 9.4 Two new reports into app usage and is closed until the next time it is needed. times a month and now they open them their commercial power suggest a mix Shazam has looked to wrap broader 11.5 times which means, cumulatively, users of both blessing and curse for the music functionality around its app to get users are spending more time in apps. business as it looks to migrate its business to spend more time when opened – read While music apps often trail behind onto a series of boxes on the home screen the biography, see the lyrics, buy the song, games, weather, news, social networks of a smartphone. watch the video and so on. But it is really and more in terms of total installs, the about speed of use and swiftness as its one exhilarating fact from the Localytics APP USAGE IS UP, WITH MUSIC main selling point: hear the song, tag it, study is that music as a category had the APPS LEADING THE SURGE find out who it is – all in under 15 seconds. largest increase (79%) of time spent in-app It’s not comparing like with like to line – rising to a total of 64 minutes a month. Recent Localytics research into how apps a Shazam up against Candy Crush, so That was reasonably ahead of the gains are used has found that the overall time obsessing on dwell time gives a skewed for health and fitness (59%) and social that a user spends within an app has picture of what is happening and how networking (49%) and significantly ahead increased by 21% in the past year. Apps, successful (or not) the app is. of entertainment (22%), sports (16%), games then, are proving more “sticky” if dwell time A more viable metric is open rates (15%) and news (14%). is taken as the defining metric of success. Except that doesn’t quite tell the full story. It’s not comparing like with like to line a Shazam Some apps only make sense when up against Candy Crush, so obsessing on dwell time report users luxuriate in them for a long time – be they a game or a subscription music app gives a skewed picture of what is happening and how like Spotify, Rdio or Deezer. Others are successful (or not) the app is” the 4 In-app earners: Pandora is at number two behind ISSUE 351 COVER FEATURE heavy compensation packages are being 01.10.14 Line worldwide, despite only being active in the doled out suggests that those running app US and Australia stores are going to tighten the T&Cs for app when a user is in the app for lengthy buy content within the app, often when the submissions so that they are not held liable periods of time and as more people pay parents are unaware until large receipts for what users do with third-party apps. for subscriptions it is only natural that show up on their bank statements. It is unlikely that too many nine-year- the aggregate across the sector rises At the start of September, Google fell foul old children are going to sign up for a year accordingly. of this and had to pay out $19m in the US to a music subscription service by accident, in refunds to settle federal allegations that but it is going to help usher in a new TIME IN-APP IS UP AND, FOR parents had been “improperly billed” for bills climate of control over app registration and music, so is spending… racked up by their children when using apps. linking accounts to credit cards. The cases date back to 2011 showing that this Amid a sprawling number of apps A concurrent study by App Annie dissected has been a snowballing issue. entering the market, standing out and the biggest in-app earners globally by … but in-APP SPENDING IS “As more Americans embrace mobile getting repeat usage are huge concerns company on the iOS platform in August technology, it’s vital to remind companies for any new entrants. New obstacles in- and found that two music services – mobile’s ticking timebomb that time-tested consumer protections still app are not going to make things easier Pandora and Spotify – have crashed the In-app purchasing is the long game for apply, including that consumers should and investors – when they (finally) tire of top 10. lots of apps. Charging upfront for the app not be charged for purchases they did not throwing money at hyped, but ultimately Most impressive was the fact that is seen as a huge barrier to adoption so, like authorize,” Edith Ramirez, chairwoman of pointless, apps like Yo and Selfie – could Pandora was at #2, behind Line, and this is Spotify, they pursue the freemium route. the Federal Trade Commission, told the LA start to regard anything with an in-app despite the fact that it is only live in the US Offer it for free but charge for upgrades, extra Times. This covered in-app purchases that commerce strategy as a risk that is not and Australia. content like stickers, or run ads. Strategically ranged from as little as $0.99 each to a worth taking because there is so little Spotify had to content itself with being this is a quicker way to hit scale. staggering $200 each. wriggle room and there are too many other at #7 while Apple – by rolling Beats Music This, however, is set to be a part of the app “We’ve already made product changes apps across all category types clamouring into its 34 eligible apps – also got into the ecosystem that is going to be policed more to ensure people have the best Google for a user’s attention. Why sink money into top 10 at #9. tightly and it could have huge repercussions Play experience possible,” said Google in something that will sink without trace? Interestingly, when the iOS and Android for those music services hanging their hopes a statement. It had become so ubiquitous This year could see some more platforms are combined, Pandora stays at #2 on monetisation this way. that Google even had a cute name for it – music subscription services either in terms of global revenue and Spotify stays There has been growing concern among “friendly fraud” which puts one in mind of swallowed up by others or dissolve into at #7, but Apple drops out of the top 10.
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