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InContext / An inside look at the business of digital content

Why you should consider bypassing app stores to reach new audiences

October 8, 2019 | By Peggy Anne Salz, Founder and Lead Analyst – Mobile Groove@peggyanne

Frustrated by fierce competition in a marketplace that counts over 6K new Android apps added daily to the Google Play app store alone and infuriated by reports that suggest Apple routinely favors its own apps in App Store searches, app companies and developers are adopting bold approaches to get their apps in front of potential audiences. The outcome is a flurry of activity and experimentation that could make 2019—destined to be the biggest year in mobile and apps yet—the best year for mobile app distribution models that pay real dividends.

A company writing the playbook is Epic Games, the company behind Fortnite. The shooter game on PC, consoles, and now mobile and apps has become a cultural phenomenon; as of March 2019, it had amassed an audience of almost 250 million worldwide. Addictive gameplay is certainly a big factor that has contributed to the blockbuster success of Fortnite since its launch in 2017.

However, if we dig deeper, a critical driver is a brilliant direct distribution strategy shaped by the company’s determination to bypass the app store. “Avoiding the 30% ‘store tax’ is a part of Epic’s motivation,” the company’s CEO Tim Sweeny told Forbes. “It’s a high cost in a world where game developers’ 70% must cover all the cost of developing, operating, and supporting their games.”

It’s also high time to ask some basic questions about the app store distribution model that hasn’t changed since the app stores opened for business in 2008. Leave it to the edgy El Reg to call out the elephant in the room. “More pertinently, after a decade, is the question why Apple and Google still take a 30% cut. In a competitive marketplace, wouldn’t that rate have been whittled down over the years?”

In a world where prices are falling everywhere, the article concludes, “that 30% over a decade is starting to look plain embarrassing.”

Clever moves to cut out app stores

The Apple-Google app store duopoly is increasingly the focus of broad government antitrust investigations. That’s because these two companies serve as gatekeeper for a massive marketplace where consumers are expected to spend an incredible $120 billion this year, according to app market intelligence provider App Annie. Think of it: That’s 5 times the growth rate of the global economy. So, its little wonder companies are lining up for their share of the action (and revenues).

A pioneer in the alternative app-marketplace was Facebook’s Instant Games. The platform where consumers can launch games from within Facebook’s chat apps has gained significant traction this year. The content library—6,000 Instant Games compared to over a million Android games and over 800,000 games on iOS—may seem tiny, but the goal here isn’t size. Facebook leverages its social connections to power an app-like ecosystem that doesn’t require an app store.

In China, the mobile messaging app WeChat has done one better. It has evolved into a one-stop-shop platform for a wide array of content and services. Consumers rely on it every step if their daily journey. With the help of “mini-programs” they download directly into WeChat, users can access content, order meals, make payments, and call a cab—and that’s just the start.

The alternative app marketplace

The ranks of companies building the capabilities to take aim at Apple and Google’s dominance of the app economy are growing. Realistically, though, it’s a strategy only a handful of companies can afford to pursue. So, what are the options for the masses of companies and developers that want to reach new audiences with their apps but lack the resources to construct and command their own alternative app marketplace?

One approach gaining traction is the Direct 2 Device (D2D) model. I learned about this one  through my own informal survey at Mobile Growth Summit. D2D is the choice for an increasing number of app companies—particularly media and entertainment apps eager to engage more users across more regions. In this scenario, app companies work with Digital Turbine, a mobile delivery platform that leverages more than 40 partnerships with handset makers and mobile operators worldwide to pre-load apps on devices. Apps are delivered directly to the device because Digital Turbine’s technology sits at the operating system level of new Android phones, enabling companies to reach consumers as they set up new devices.

Delivering a frictionless user experience

In practice, the approach gets apps directly in the hands of consumers. It also puts consumers in control of their apps, giving them the option to keep what they like and delete the apps they don’t. The result is a frictionless experience that streamlines app discovery, which saves users the hassle of sifting through digital shelves packed with millions of apps.

This is a big deal in a global app economy where app store search, though not broken, is clearly not optimal. Many apps show up high in search results because the companies that made them have mastered app store optimization or bid on the right keywords, not because the apps are the best fit with what consumers are looking for in the first place.

Digital Turbine’s EVP of global revenues and growth Matt Tubergen tells me his company has preloaded over 2 billion apps via its software platform, which is installed on more than 270 million devices. Shopping and gaming—hypercompetitive verticals where too many apps are chasing too few users—were the first to embrace Digital Turbine to capture and convert new audiences. More recently, media and entertainment apps have joined the party.

From CNN to the BBC, and from Smart News to News Republic, companies are making D2D the cornerstone of their customer activation strategy. News portals and social platforms, including Yahoo!, Opera News, and Reddit, are also harnessing the platform to fuel growth.

Significantly, Digital Turbine’s Tubergen says many media companies don’t just see D2D as a play to bypass the app stores. “It’s about augmenting their channels—increasing reach in a way that allows them to take back control of the download experience and determine their distribution in addition to the app stores.”

You have options

Whether companies have the wherewithal to build their own app store marketplaces (without a store), or join the ranks of companies making their apps available to consumers directly on the smartphone at the time of device activation, it pays to explore other ways to distribute your app and grow your audience.

Media consumption on mobile is headed for the stratosphere this year. In fact, roughly 10 minutes out of every hour spent consuming media will be on a mobile. So, it’s no surprise that the dominant distribution channels are noisy and crowded. Harnessing alternative distribution channels allows media companies to drive customer connection—without the friction. It also lets them focus on an even bigger challenge: ensuring that consumers engage frequently and deeply with their apps.

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