Wednesday, 18 March 2009
iPhone 3.0 Hands Content Publishers An Online Biz Model
Ok so Apple gave a very interesting talk yesterday about their upcoming iPhone OS update, iPhone OS 3.0.
There were a huge range of interesting features presented. But one that caught my attention was the ability for iPhone application developers to charge for additional application features as well as for content subscriptions.
How will it work?
Basically if you download a game, you might initially only have access to only 10 levels. Once you beat them, then you get the option to buy more, say levels 11-20. News and entertainment service application developers will be able to charge for individual pieces of content (essentially content micro-payments) as well as on a subscription basis (.e.g FT annual subscription).
This opens up a wide range of money-making options for content publishers. News and content websites could charge monthly subscriptions as well as accepting micro-payments for individual articles. Online TV channels could charge per program or even an annual subscription to their channel. Imagine a guitar instructor getting an app developed through which he could sell lessons (in video/text/image/interactive formats) on a per lesson basis.
Why will people pay for content?
There are two main reasons iPhone users will be willing to pay for content (if designed/deployed correctly). Firstly, the app store and the iTunes store have conditioned people to accept the concept of paying for content. iTunes did this very successfully transforming chronic illegal music-downloaders to loyal iTunes customers. On the app store, most users don’t mind shelling out a buck or two for an app that takes their fancy. This will most likely result in iPhone users who are willing to buy an interesting video clip or an informative article, or perhaps expand their collection of digital novels through the e-book reader application they downloaded.
The second reason people will pay for content will be the convenience. It’ll be so easy, smooth and quick to download content and have it right there in the palm of your hand. Bored on the train ride home? Download a sports clip of your fav team. Commuting and want to know what the markets are doing this morning? Download that market report from your favourite financial guru’s website. You’ll have it almost instantly right in the palm of your hand. This smoothness and ‘it just works’ factor will certainly help grease the wheels for widespread content micro-payments and subscriptions.
How to prepare
To dismiss this carefully crafted micro-payment and content monetisation infrastructure that Apple will be putting in place this summer would be silly. Sure, iPhone users represent a fraction of all online users, but they have strong buying power, and are only likely to grow in number. Existing content providers should be planning their strategies from now. Do they have access to iPhone app development resources? Do they have a quality of content that people will pay for? How will the iPhone based paid content differ from free content available online generally? These are all sensible questions to ask to ensure that this new channel for content monetisation can be effectively leveraged to create a robust online business model.
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