Why TV Apps Will Outnumber Mobile Apps
Earlier this year, Tim Cook proclaimed that the future of television is apps. What most people don’t realize is that the total number of available TV apps will surpass those designed for the mobile phone.
Thanks to their legacy business model, a broadcast network has the unenviable task of having to deliver content to its viewers 24 hours a day, 7 days a week. The diversity in viewership throughout the day has resulted in each of the major networks having a content portfolio designed to cater to anyone and everyone. The Bold and the Beautiful for the daytime crowd, NCIS for primetime viewers and the Home Shopping Network for insomniacs. The same diversity of content can be found within network TV apps. Yet despite the fact that I can watch whatever I want, whenever I want, I’m no more likely to watch The Bold and the Beautiful now, than if I could have done so at 11am on a Tuesday morning via broadcast television. It’s an approach that’s a mile wide and an inch deep, and one that has resulted in a complete ambivalence toward network broadcasters.
Content creators have proved that the value of a smaller, yet passionate following far exceeds that of a larger somewhat disinterested audience. I would argue that FOX fits within the latter category. However, at the show level, there are pockets of extremely passionate fans. This is evidenced by the more than 100,000 Simpsons subreddit subscribers, the millions of votes cast during each season of American Idol and the abundance of X-Files fan sites. Individually, each of these audiences is a community. A community that can be bought together via a dedicated app.
That’s all very well and good but how can a show that runs for 6 months of the year and airs once a week, justify its own app? The answer is far greater than just past episodes. An app represents an opportunity to consolidate all content that’s tangentially relevant to the show itself. That includes outtakes, cast interviews, audition tapes, behind the scenes content or the appearance a cast member once made on a late night talkshow. Furthermore, it’s a location to aggregate content that’s personally produced by cast members, which today is scattered across YouTube, Facebook, Periscope and others. The viewers come for the show but stay for the extras. No longer are they dependent upon a weekly airing cycle. Instead, they have a constant feed of new and interesting content; content that if delivered in this manner can rightfully justify a small, monthly subscription fee. This, I believe, is the direction in which we are heading.
Understandably, the networks are somewhat hesitant to move toward this future. Instead of competing with one another on the size of their content library, they’ll have to compete on a show-by-show-basis. Today, we’re one step removed from this future with NBC being the first to fragment its offering with the pending launch of Seeso, a $3.99 per month TV app focused exclusively on comedy. While this is a step in the right direction, I imagine it’ll be short-lived thanks to that age-old motivator; competition.
If content fans are thought of as a community, then YouTube is their rallying point. But a steady decline in ad prices, and therefore creator payouts, have forced many YouTubers to diversifying their business. Product sponsorships, paid content, book deals, podcasts, merchandise sales and cross-promotional opportunities are now common among YouTubers, and not just those with the largest followings. Yet these are activities not supported by YouTube and therefore content creators are increasingly motivated to route their viewers elsewhere. Previously, YouTube could offer content creators all that they needed to run their business — today, it’s the top of a purchase funnel for a transaction that will occur elsewhere.
Of all the monetization options available to YouTubers, only one has the potential to deliver the balanced, mutual benefit between creators and viewers that YouTube once did — premium content subscriptions. This gives rise to two questions. 1. Isn’t that what YouTube Red is? No, YouTube Red faces the same mile wide, inch deep problem broadcast networks do; and, 2. If not YouTube, where should the premium content be distributed? The answer is, within the content creator's own dedicated TV app.
It’s important to note that encouraging YouTube viewers to install a TV app that’s solely focused on a single content creator is not reflective of a belief that YouTube is no longer important. YouTube should be leveraged for what it does best — helping viewers discover you and your content. The entire site is designed to help viewers discover new content, not keep them returning to your content. This is enforced by everything from the homepage recommendations, to the navigation menu order and the choice of Up Next video. Interestingly enough, it’s the broadcast and cable networks that understand this best. SNL content is enormously popular on YouTube. Yet you cannot watch an entire SNL episode on YouTube. To do that, you’ll have to watch it elsewhere and pay for the privilege of doing so. HBO also leverages the discovery elements of YouTube to promote its show Ballers. Ballers: Inside the Episode is a YouTube series designed to generate interest in the show, and if you’re so inclined, you can head over to an HBO property to watch it. But there is one group that stands out from the rest. By employing this very strategy, the WWE Network has managed to build a subscriber base of 1.2 million fans, each paying roughly $10 per month and viewing the content on any one of the company’s TV apps. Likewise, Crunchyroll, a content company focused on Japanese anime, recently announced that they surpassed 750,000 paid subscribers, the bulk of whom subscribe to their content via, you guessed it, a TV app.
So what’s preventing YouTubers from making their content available via paid subscription within a TV app? The simple answer is that they’re not app developers. There are three major streaming TV platforms on the market today — Apple TV, Amazon Fire TV and Roku. The market is still determining who has the most compelling offer and therefore each platform has roughly the same marketshare, with some give-and-take depending upon the source of reference. In short, this means that an app needs to be available on all three platforms.
The best apps have the best content, and the best content is produced by content creators, not app developers. Yet this is not reflected in the tools provided by the platforms. Instead, content creators are asked to visit a developer subdomain and dive head-first into Xcode, WebView templates and BrightScript. For most, this is a hurdle too high. To prompt an en masse publishing of TV apps, a very different set of tools is required.
There will be no app to develop, only apps to populate. YouTube will supply much of the initial content given that’s where it’s located today. But in order to restore the balance between creator and viewer, subsequent content will reside solely on the app and YouTube accounts will be limited to awareness-driving clips.
The ability to publish an app, versus having to develop one, will give rise to millions of new TV apps. Existing media properties will fragment into multiple apps, specifically targeting their most passionate supporters. MLB.tv will fragment into an app for every team. Universities will leverage their own TV app to engage with alumni. Every musician will have their own TV app as will every active YouTuber, Twitch broadcaster, Vimeo publisher, Snapchat and Periscope user. This, in turn, will propel the broadcast and cable networks to segment their content portfolio by show, if for no other reason than to increase the size of their app store footprint.
But will this result in the total number of TV apps exceeding that of mobile apps? In short, there is a greater number of content creators, than there are mobile apps. For every mobile game, there is more than 10x that in gameplay Twitch accounts. For every email client, there are 100 YouTube channels providing time management advice and for every calendar, alarm clock or other utility app there are another thousand content creators focused on satisfying their specific audience. By removing the barriers to developing a TV app, content creators will flock to establish a presence on these platforms in order to increase the size of their audience and access an additional revenue stream.
Some may argue that this is bad for viewers. That an increase in TV app numbers will mean viewers have to spend more time searching for apps than they would otherwise. However, as content creators seek to grow their business, it’s the TV app that they’ll be directing viewers to. YouTube will continue to be the primary source of content discovery, only now the bulk of the content will live within a TV app. And while there will be a significant increase in the total number of available TV apps, an app will only ever be as popular as its content. However, under a paid subscription model, the size of that popularity no longer needs to number in the millions in order to generate real revenues, as it has on YouTube, which ultimately, will be the primary driver of an increase in TV app numbers.
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