One of the recent annoying trends in the mobile business domain has been the attitude towards apps. Most of the media extols apps as the next big thing, the gold rush everyone must get at now or miss billions of dollars of revenue – and your standard sources of industry opinions and forecasters like Gartner don’t exactly help calm things down by parading the figures and showing off impressive growth charts.
Then some people realize that oh dear, most apps don’t make any money! The whole paid app craze must be a mistake!
This backlash, though popping up occasionally earlier, was propelled to the “masses” by Tomi Ahonen’s post here and followed by reactions and other observations here, here, here and in many other places.
Suddenly a whole storm of comments for and against apps and the “app economy” ensued. And I’m left thinking what’s with all the commotion? It is, of course, an indisputable fact that most apps don’t make a lot of money for their creators. What I don’t get is exactly why this is a surprise to anyone.
Why would apps be any different from other, crudely similarly structured industries? I.e. industries where creators of various sizes are vying for the same market with vastly varying resources, creating products with quality and appeal ranging from total crap to great? Take, for example, the music industry; of the 100,000 albums released last year, 17,000 only sold 1 copy; more than 81,000 albums sold under 100 copies. The vast majority didn’t make any money.
Book publishing is similar; the average book sells less than 500 copies, with the hits badly distorting the average. In 2004, 950,000 titles out of the 1.2 million tracked by Nielsen Bookscan sold fewer than 99 copies.
A few big hits, small reasonably profitable middle ground, long tail of disappointments. Sounds a lot like the app economy to me.
A tough market? Of course, any competitive market is.
But somehow surprising industry dynamics? Hardly.
And definitely not worth losing your sleep over either way; if you think apps will magically save your business case, reset your expectations to something resembling reality. If you think they’re a fad that don’t deserve to exist, you are almost saying books and music are in the same category – and yet it’s highly likely you happily consume both. Both sides of the polarized debate should just get a grip, take a step back and reflect on it a bit.