Do You Need an App for That?
“Just a little?” Thompson says with a smile when asked if he thinks the media industry’s enthusiasm for apps has cooled. The reason is simple: The golden age of media people thought they would usher in never arrived. The buzzy mobile-first startup Circa, which raised more than $5 million from investors, shut down in 2015 when it couldn’t maintain its place in the top 1,000 iOS downloads. Last month the New York Times shuttered its NYT Now app because, reported the Times, it “never quite took off as The Times had hoped.“ And while Thompson thinks The New Yorker Today has the necessary elements to succeed — strong technology, top content, and a dedicated audience — he also understands why the vast majority of publications are moving away from the app model.
Most apps never find an audience. A comScore survey found that the majority of smartphone users download no new apps a month. And with more than a 1,000 new apps arriving in the Apple and Google stores each day, counting on serendipitous discovery isn’t much of a strategy. “No one is ever going to ind your app in the App Store — never, no one — unless Apple promotes it or you specifically tell someone to go download it,” says Evan Ratliff, CEO and co-founder (along with Thompson) of The Atavist Magazine, a publication that very publicly pulled its app from Apple’s store in 2015. “That means that you’re having to put more energy into getting people to download the app, which is just the first step toward getting people to read something.”
Which leads to the second problem in the app economy: Even for brands that manage to convince users to download an app, there’s no guarantee it will ever be opened. Forrester Research Inc. calculates that smartphone owners typically spend 88 percent of their time using just five apps. It’s not the same five apps for everyone, but it’s rare for editorial apps to be among them. “The apps that get usage are the Instagrams, the Twitters, and the things that people impulse-check,” says Aaron Lammer, co-founder of Longform.org, a site that highlights high-quality narrative journalism. “I don’t think people are impulse-checking monthly and quarterly magazines.”
Development costs are also an issue. On average, it takes $270,000 to develop an app according to a 2014 survey by software company Kinvey — and that’s just for a single platform. If a publisher wants to offer the app in both iOS and Android, that can easily add an additional six-figure cost to the budget, because much of the production work and testing needs to be done in duplicate. And that doesn’t account for ongoing programming costs necessitated by Apple’s frequent iOS updates. Making even minimal changes to an app requires re-submitting it to Apple and waiting one or two days for approval.
Apple says it’s working to improve the situation, and it recently announced tweaks to the App Store designed to make it easier for users to discover new apps (and to put more revenue in app developers’ pockets). One major change relates to the 30 percent cut Apple typically takes on purchases made through its App Store. Apple says it will drop that fee to 15 percent after a customer has been subscribed for a year. But few apps make enough revenue for that extra 15 percent to amount to much. Just one percent of App Store publishers made 94 percent of revenue from the U.S. App Store during the first quarter of 2016, according to a study by the app marketing company Sensor Tower. Put another way, 623 publishers earned around $1.34 billion, while the remaining 62,677 split $85.8 million. The 1 percent are generally companies like Supercell, Spotify, Netlix, and HBO, not newspapers, magazines, or other publications.
But not all of them. Early returns on The New Yorker Today have been good. People who download the app are more likely to read 20 stories in a month than those who don’t download it. And, according to Thompson, a “significant number” of people subscribed even before hitting the paywall. Thompson also isn’t expecting to replace Instagram or Facebook — merely to be on smartphone users’ first or second screens, and to appeal to dedicated readers.
Of course, The New Yorker may be the most lauded magazine in the United States. That there is any question its new app will succeed is indication of the headwinds facing the average app by the average publication. For most publishers, the difficulty of creating a profitable app is on par with the difficulty of matching the quality of The New Yorker’s prose.
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