In 2007, I wrote about widgets. Netvibes, a company based out of France had caught my attention as they were on the front lines of creating miniature, portable content distribution channels. My attention (and I know I’m not alone), is now drawn more closely to the "widgetization" of content to iphones and other handheld devices.
Monetizing widgets on the web has been associated with portals and sponsorships around the content. Today, there’s a crossroad on how to monetize widgets (apps) on handhelds.
In researching the topic I’ve found that there has been a lot of discussion in the application communities around valuating the route of advertising supported applications vs. subscription (fee based) models.
Interestingly, some of the early data is showing that the biggest issue is one of usage frequency for the applications. The ad-supported models require critical mass to become a viable marketing channel. Some data that I’ve seen shows sharp drop off rates after 1 or 2 uses. I’m assuming that this is for a number of reasons but I think the top one might be that the applications to date have been largely marketed (through word of mouth) as novelty items. Consumers download the applications, use them once or twice and then get bored or forget they have them. This would support the fee-based model we see today from the iTunes store.
Killer applications that warrant sponsorship have yet to arise out of the frenzy. I think that this is because we haven’t even scratched the surface of the content that is available to be widgetized.
There are a number of ways that content providers can get into the game and use the app ecosystem. It’s a fluid environment where the users are fickle and drop applications every day for newer, better ones. This may lead to network solutions that provide multiple channels (apps) on a consistent basis to guarantee distribution.
I knew that there was a connection between Netvibes’ model and the business of applications but it’s been hard to articulate. Maybe I just see iTunes as a major content distribution channel that somehow convinced users to pay for what was once free on sites like Netvibes. These applications are after all, a collection of widgets – no?
With the imminent launch of the RIM application store and the many others that are sure to follow, the need for content providers to re-think their distribution strategies is critical. Thinking out loud…”Creating branded widgets may not be the best use of time and resources”.
It’s early days and it’s already fascinating to visualize the new generation of distribution brokerage.