There’s no obvious way of doing things anymore.
People rush to read the annual Internet trends report by respected analyst Mary Meeker, now a partner at venture capital firm Kleiner Perkins Caufield Byers. Meeker released her latest report, a far-reaching 197-slide presentation, on Wednesday. Among the takeaways in her research is the importance of messaging services like WhatsApp, Facebook Messager and Snapchat, which has already partnered with one music company, Warner Music Group, and a few other media companies that provide daily content.
There’s one simple reason why the music business — content owners, artists and managers — should work with mobile app companies: audience. Mobile apps are drawing incredible numbers of users and adding new services to become stickier. If this wasn’t already crystal clear before Wednesday, Meeker’s report does a good job driving the point home.
Snapchat, which started as a pure-play video messaging service, is a good case in point. The app allows people to send brief, short-lived videos to friends. The simple concept has worked. Snapchat is booming and investors want more growth. On Friday it announced it has raised $538 million at an estimated $16 billion valuation, bringing its total funding to $1.2 billion, according to CrunchBase.
But there’s more than messaging. In January, Snapchat added video content from outside media companies through a content vertical called Discover, an in-app platform with licensed content from media companies such as Warner Music Group, Vice Media and Comedy Central. (Warner believes streaming has a bright future but isn’t overpromising. CEO Stephen Coooper said “it’s just too soon to tell” how much revenue services like Snapchat will actually generate.) It’s a different take on media consumption; the content is refreshed daily and is tailor-made for the short attention spans of mobile viewing (and Snapchat’s younger audience). It’s not Pulitzer material, but the content can be engaging and entertaining.
Media companies need to adapt their content for new, popular technologies. Mobile devices will account for 51 percent of the time — 2.8 hours per day — American adults will spend online this year, according to eMarketer. As Meeker points out, those 2.8 hours are being spent on devices with default-vertical screens (mobile devices can be turned on their side). All other screen time, including 4.3 hours per day watching television, comes from horizontal-only screens.
Messaging apps will only become more attractive to content owners. Look to the quick rise of Snapchat. It now has 100 million daily active users. Forty-one percent of American teens 13 to 17 now use Snapchat, according to the latest Pew Research Center research, but the app barely got a mention in previous Pew reports. Facebook Messenger has also grown rapidly since breaking away from the main Facebook service. The app now has 600 million monthly active users. Views of its user-generated videos have grown 300 percent in the last six months. Three quarters of those views come from mobile devices.
There aren’t any guarantees. Despite its promise, Discover is off to a slow start. Snapchat’s media partners told Bloomberg that traffic spiked after Discover launched, but since has dropped dramatically. Warner Music Group is being cautious with its expectations. CEO Stephen Cooper said in February “it’s just too soon to tell” how successful Snapchat, as well as video services Vessel and Interlude, will turn out to be. But Discover can produce good numbers with even light traffic: Cosmopolitan told Bloomberg it gets 2 million views a day on the platform.
There’s more to mobile messaging than Snapchat. LINE has 205 million monthly active users (MAU) and is attempting to integrate the MixRadio Internet radio service it bought from Microsoft last year. Some other messaging apps are bigger yet. WhatsApp has 800 million MAU that send 30 billion messages per day. Chinese messgaging app WeChat has 550 million MAU.
Messaging is just a starting point. Some apps are already integrating other services to offer to their huge user bases. WeChat and LINE have launched food delivery services and taxi services. In addition to its taxi service, Korean app KakaoTalk offers Kakao Topic, a media service that launched last year with content from 110 news agencies and other content providers.
We’re in a transition phase. These mobile apps have a youthful user base with little regard for the ways that content was consumed in the past. Media companies have myriad options but no certainty of success. Not everything will work, but many things will change. [Billboard]