Organisations have been spending millions of dollars on turning mobile phones into the latest editions.
Race on to make news mobile
Can mobile phones save journalism? Many of the world's largest news organisations are spending millions of dollars to prove that they can, even as they shed staff and close bureaus in response to the economic downturn. Most of this money is being invested in something that has nothing to do with journalism at all: developing customised software for each of the market's leading smartphones in a bid to grab reader loyalty.
For all of the summer and much of the spring, grim tales of media cutbacks alternated with a peppy drumbeat of press releases announcing the launch of yet another mobile news application for yet another model of phone. Agence France-Presse (AFP) released its application for BlackBerry last week. Associated Press (AP) launched an application for the Palm Pre in June, along with an upgrade of its application for iPhone's new operating system.
Reuters entered the fray in May, with customised applications for the BlackBerry and iPhone that formed a substantial part of its plans to invest more than US$1 billion (Dh3.67bn) in raising its multimedia capacity. From the outside it seems almost comical: the digital equivalent of printing different sizes of newspaper tailored to the different sizes of readers' breakfast tables. But news groups are hoping the improved user experience with an application that downloads stories ahead of time and presents them in an easily accessible, multimedia-rich format will make readers more likely to turn to their particular brand of news, rather than surf around on the slower mobile web.
Chris Ahearn, the president of media at Reuters, says his organisation has been experimenting in the wireless space since the 1990s, but has only recently rolled out a series of mobile applications as part of a "billion dollar-plus" investment in multimedia. "The transition that we've been making, and that others have been making, is to put our efforts on that application layer, instead of just doing WAP [wireless application protocol] sites," Mr Ahearn says.
"The reason that we're doing it is we've seen enough of an update of the actual devices. The devices have the processing power, so now is the time to make the transition." WAP sites are simplified versions of websites, designed to be reached through a mobile browser. Until the introduction of the iPhone in 2007, that is the way that most people working in mobile news delivery at news groups expected to be delivering their news.
Jeff Litvack, the general manager of mobile and emerging products at AP, remembers at that time applications seemed to be on the decline, with a number of application makers going out of business. "Apple itself wasn't really talking about applications," Mr Litvack says. "They were talking about the mobile web and the Safari-based browsers." So AP Mobile launched in May last year, optimised for the iPhone's browser and available in WAP versions. It was not until July last year that it released its first mobile application.
"We were looking at the iPhone and we noticed that there was a button for stocks and there was a button for weather, but there wasn't a button for news," Mr Litvack says. "And the reason for that was that there wasn't a good solution out there." AP decided to develop one and today, 95 per cent of its mobile traffic is application-based, with only 5 per cent coming from the mobile web. Evan Conway, the executive vice president of marketing for Handmark, a mobile application developer based in the US that designed BlackBerry applications for Reuters and AFP, notes the role the iPhone has in the market, considering it was sold as having such an advanced browser it would not need applications.
"The iPhone was a game-changer with regard to a browsing experience," Mr Conway says. "The funny thing is, it's been by far the best experience regarding applications; the phone with the best browsing experience by far has the most downloads of applications." At last count the iPhone store had 64,000 applications, more than 1,500 of them dedicated to news services. But the popularity of applications is a blessing and a curse for news groups, Mr Litvack says.
"The issue nowadays with the applications is discoverability," he says. "Big brands might get found in the application stores, but small-town papers or niche publications might get overlooked. An even bigger challenge is the cost of developing applications. "Getting into the application business is not something that I think newspapers should necessarily jump into," Mr Litvack says. "It's not like doing an online site. It's very intensive."
AP is trying to leverage the more than $1m a year it spends on its mobile infrastructure, which counts technological development and the cost of doing deals with the Nokias and the Apples by teaming up with local newspapers to become a mobile news aggregator. But Mr Litvack admits it will be a while before this strategy pays off. At the moment, experiments with subscriptions have failed and the advertising market is very immature.
"The challenge is that the ad networks have come into this industry very quickly and they are driving down prices too fast," he says. "The economics may never work in the market that we are in today." Handmark has devoted a part of its business to helping magazines and newspapers gain mobile applications without investing the major infrastructure AP has had to. By using an underlying platform that makes developing an application for a BlackBerry similar to developing one for an iPhone, it can quickly give news organisations their own applications for less than $50,000, Mr Conway says.
Big media brands such as the The Wall Street Journal, Forbes and Time magazines have already signed up. The deal is so cheap that Handmark loses money on it, but it makes that up by sharing advertising revenues with the news group, as well as a cut of other applications sold through the site. Mr Conway believes the viability of this model comes down to how involved the newspaper's own advertising sales team is in selling mobile advertisements.
"I think local newspapers have a huge advantage, because they've already got an ad sales team selling local advertising," he says. "With the internet, it would be anywhere." If the conundrum of how to make money from mobile news delivery is to be solved at all, the UAE should be one of the best places to do it. It has one of the highest penetrations of mobile phones in the world, a rate that will hit two phones for each person this year, according to PricewaterhouseCoopers and the Dubai Press Club's Arab Media Outlook.
It also has a relatively weak penetration of the broadband use that has helped to destroy the profitability of newspapers in much of the rest of the world. So far, mobile news delivery has not taken off in the Middle East but Dr Ali al Assam, the founder of Knowledgeview, the UK-based news management company that is developing browser-based mobile applications for several Middle East media companies, believes that is about to change.
"We are in the middle of a tremendous transformation," Dr al Assam says. "By the end of the year, or early next year, you will find many applications on the mobile by local publishers." Knowledgeview is working on mobile applications for several Saudi newspapers, as well as two media companies in Abu Dhabi: I-Media, the publisher of the UAE's first Arabic-language daily newspaper, Alrroya Aleqtisadiya; and the Abu Dhabi Media Company, the publisher of The National.
Dr al Assam says the publishers he works with are wary of the applications model that requires users to download software. "The reader doesn't like to download anything to his phone," he says. "The web browsers on phones now are very sophisticated. In my view, custom applications like Reuters is doing have a very short lifespan." In big markets such as the US or Europe, such a short lifespan may not matter, but in the Middle East it is questionable whether there are enough smartphone users to justify the expense of developing downloadable applications.
"For a publisher, unless they are very rich and want to waste money, it's really not sustainable," Dr al Assam says. He has been developing a browser-based rich media mobile service that will interact with special servers designed specifically for mobile, for less than ?100,000 (Dh518,150), he says. Revenue will come from a variety of sources including deals with telecoms, advertising and in some cases increased subscription rates, when the mobile service is thrown in to add value to a normal newspaper subscription.
This model has proven particularly popular in the West, Dr al Assam says. "My view is that this is going to move to the Middle East very rapidly indeed." email@example.com