Making Money in Mobile

Last night's Mobile Monday event seemed to have it all: a downtown location (The Place); free food and alcohol (one drink per person) a great topic (Making the Mobile Money Flow) and a great group of panelists.

But something about it didn't completely work. The Place, while a great bar, did not lend itself to good networking. The 300 or so attendees packed in, shoulder to shoulder, with little ability to move through the room. Unlike other Mobile Monday venues, which tend to be in ballrooms, this one fell short.

The packed bar at Mobile Monday

The packed bar at Mobile Monday

The panel also showed a lot of promise. It included Moderator Todd Hixon, founder and managing partner at New Atlantic Ventures and panelists Doug Hurd of uLocate Communications (creators of the WHERE app, one of my personal favorites); Steve Krom, VP & GM of AT&T Mobility, New England Region; Mike Kirkup, of RIM; and Eric Weinberg of DeviceAnywhere. But over the hour of discussion I felt little new was offered to the target audience: developers who know that monetization strategies are few and far between.

Granted, the topic of how to make money in the new mobile application environment is a tough nut to crack in just one hour, but the group did their best. One of the best pieces of advice came from Hurd, who noted that creating a mobile company takes time, don't expect to create a viable company overnight or based just on one application.

Related to that was the advice to the developers in the room to decide if they wanted to be an application or a mobile company. Mobile companies, it was noted, have multiple revenue sources, while and application has a single revenue  source.

Much was made of the recent announcement that Apple will allow in-app purchases, leading the panelists to point out that developers will need to find ways to up-sell consumers through items like additional content or personalization features within free applications. Of course, for many this will create a "try before you buy" system.

The panel did point out something that should be music to the ears of Localytics: developers need to pay more attention to what works (and what doesn't) within their applications. As someone pointed out, 90 percent of applications loaded are not used in the first 30 days. If the strategy is to make money within an application (as opposed to just at the pont of purchase), then understanding how and when people use it will be a necessary component.

The problem with all of this is that for application developers the talk isn't new. Talk to anyone developing iPhone applications (and most mobile developers create primarily for the iPhone, as it's the most vibrant application store) and they'll point out that selling an application nets almost no money. Even if someone manages to find your application amid the 85,000 or so in the app store, then decides to spend the 99¢ on it, Apple takes 30 percent. You have to sell a lot of one-off  applications at 70¢ per in order to make back your development costs.

One piece of advice that works for us here at Fresh Ground, however, is that developers need to do a better job of marketing their applications. Just creating one and getting approved by Apple isn't enough, you need to encourage reviews, create  online content, do a lot of search engine optimization and, in general, create buzz.

Other than that, the advice from the panelists seemed pretty generic. Steve Krom encouraged developers to look beyond the app store and develop for the carriers. Frankly, it seemed like an old message and one that few developers really want to hear. The recent trend is away from carriers, not toward them.

RIM also touted its own app store, which takes less of a cut than Apple, but with so many different devices I've heard developers say that creating for RIM (and Android) has expensive logistical problems. An application that runs on one device won't run on another, a problem they don't face when developing for the iPhone.

In short, I'll still be at the next Mobile Monday event, but I'm hoping we go back to a large conference room. Though, I still appreciate the free booze.

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