Why Entertainment Apps & Sites Are the Monetization “Darlings” of 2013

By Amy Vale

Mobile devices have revolutionized the way consumers find, absorb and share information via technology and, as a result, forever created a world of mobile-first consumers. These mobile-first users are increasingly accessing their favorite entertainment on-the-go – be it live video streaming of films/television shows or music. For the most part, mobile is proving itself to be a much more disruptive consumer revolution than the Internet. Smartphone and tablet sales worldwide are going fast and hard; tablet shipments will surpass PCs in 2013. But monetization strategies just haven’t been as strong thus far to close the gap on that $20 billion monetization opportunity Mary Meeker discussed back in 2012.

Recently, Cisco’sVisual Networking Index (VNI) Forecast revealed some interesting global mobile data traffic predictions and growth trends. The report found that streaming video accounted for 51 percent of mobile traffic in 2012. These statistics suggest that mobile traffic will increase to two thirds share by 2017, making mobile video and other entertainment sites a huge portion of mobile users’ lives. The media consumption is clearly there. So what can entertainment publishers and app developers do to develop sound mobile monetization strategies?

Take a Cue from the In-App Experience

Don’t forget what matters to consumers when they’re browsing, swiping, clicking and tapping through mobile entertainment sites and apps; they want to be entertained, amused and delighted. So why wouldn’t entertainment publishers and app developers incorporate the same type of content into the ads delivered within those sites and apps? That means looking at the data and traffic being generated from these sites and apps to understand what types of ad formats resonate best with users, what times of day and location generate highest engagement and interaction rates, mobile purchases resulting from ads, and other similar data. One smart way to do this is to match the ad experience to the overall user experience of your app or mobile site.

Monetize with Subscriptions

According to JuniperResearch, global mobile entertainment revenue will grow about 80 percent from $36 billion in 2011 to $65 billion by 2016. That leaves a big door open for mobile entertainment publishers and app developers to monetize via pad subscriptions. Just look at what Nokia is doing. Earlier this year, they announced plans to launch a subscription service upgrade to its free music streaming service in the first quarter of this year. For just £3.99 each month, users will be able to upgrade to a paid-for monthly subscription that lets them download unlimited music mixes, which can also be played offline (think of in-transit times on trains/planes when there is no Internet connection available). Nokia’s Vice President for Entertainment, Jyrki Rosenberg, was quoted in Mobile Entertainment: “By removing barriers like adverts and sign-ins, Nokia Music makes it easy for users to discover and enjoy music on the go. Nokia Music+ now provides increased control over the listening experience at half the cost of many third party services.” For mobile entertainment publishers and app developers, subscriptions are clearly a smart and effective way to monetize.

Leverage Multiple Screens

On a daily basis, nearly 39 percent of smartphone users are on their devices while watching TV, according to a new report from BIIntelligence. That number is even higher with the younger, more engaged millennial audience of 18-24 year olds, with 80 percent saying they multi-task and perform a variety of activities on their mobile devices and TV simultaneously. Clearly, mobile entertainment app developers and publishers should tailor their monetization strategies to increase traffic, click-through rates, downloads, social shares and ROI/revenue across multiple screens. For example, cable giant Viacom and social TV company Zeebox have partnered to let advertisers show both TV commercials and digital ads simultaneously thanks to its newly launched automated advertising platform called SpotSynch. Here’s how it works: SpotSynch allows companies to include an advertisement within the app at the exact same time a commercial airs on TV. The result is simple – more personalized and interactive ads. And that means more eyeballs, more clicks, more downloads, more social shares, and ultimately, more revenue for publishers and app developers.

Though it’s a new product, it will be interesting to see how Zeebox’s engagement shortcut affects advertisers’ ROI.

Rental Revenue Has Benefits Too

While subscriptions are great, some users may want a less committed relationship with their entertainment app or mobile site. Another option would be offering users the chance to download or rent their entertainment content right in the app. Allowing users to easily buy songs, films, or TV shows within the app or mobile site interface keeps them engaged and clicking. One app that plans to capitalize on the digital rental market is Yeah!, an AMCNetwork project unveiled at SXSW last week. One of the really innovative things about the rent vs. purchase monetization model here is that each rental includes exclusive interviews, trivia, and quizzes. By providing several layers of entertainment within each in-app download, Yeah! offers something Netflix and other streaming services don’t.