TV stations are rolling out apps for smart phones and tablets with the support of technology and software vendors, hoping that the apps will eventually provide a substantial, new source of advertising revenue. Although advertising is the most common way of monetizing apps, some are also experimenting with modest monthly subscription fees.
Stations’ Mobile Apps Showing Promise
As mobile continues on its trajectory toward the center of the media universe, local TV broadcasters are jumping aboard, offering apps for smart phones and tablets as well as the text-based SMS services. And in so doing, they are developing another small, but growing source of advertising revenue.
“We are on the cusp of a new business now finally after years of having growth on mobile WAP sites, and if the growth continues, mobile will be a primary driver not just of traffic, but revenue too for the stations,” says Bill Burton, EVP of digital media for the ABC-owned station group, which rolled out iPad apps late last year.
Already, the group has signed on advertisers for the service including Disney Destinations, 1-800-Mattress, Pepsi, Mercedes Benz and Walgreens, underscoring the money-making potential.
Many stations are now offering apps supported by technology and software vendors like News Over Wireless, Inergize Digital, LSN Mobile and DoApp or full-blown service providers like WSI and Beat the Traffic.
Such mobile services will complement the mobile DTV service that many stations are planning to launch later this year. Unlike the mobile apps, which rely on the wireless network, mobile DTV uses a small portion of stations’ digital channel to deliver TV similar to conventional broadcasts.
Hearst Television rolled out apps across its stations last year and they now represent more than half of the group’s mobile traffic, says Jacques Natz, director of digital media content at Hearst Television. The other half comes through conventional Web browsers.
With mobile apps, station can more easily provide on-the-go news content for consumers, many of whom are diving into news on their phones at all hours of the day, Natz says.
“We can send text, images and, in many cases, video out to mobile phones throughout the day,” he says. “The days of deadlines are over. You have to provide the info on the spot when it happens and mobile is often the way to do it.”
By the end of this spring, Hearst plans to add interactive weather radar on its stations’ mobile apps, Natz says. And within a year, he adds, it expects about one-quarter of the overall digital impressions will originate from a mobile platform.
Hearst, which works with tech provider LSN Mobile, is just beginning to sell ads in its mobile apps. LSN Mobile also works with Cox, Raycom Media, McGraw-Hill among others.
KGO San Francisco is one of the ABC-owned stations that rolled out an iPad app in late December. The app includes news, weather (with animated Doppler maps), photos, social platforms and also live, breaking news video.
“People aren’t at all times in front of a computer, so it’s just another screen to reach people on,” says Jennifer Mitchell, director of Web operations at KGO. The iPad app is in addition to apps the station offers for other mobile platforms, including Blackberry, iPhone and Android phones.
Mitchell says her goal for the first few quarters is simply to offset the costs of development and technology. “I do think it will become the norm for TV stations and they will have to think about building apps for all of these devices and for the Android tablets coming to market,” she says.
The CBS-owned stations introduced a sports-centric app in their local markets this year called Shout Sports. The group plans to sell ads in it and also integrate the app into its local offers platform, a Groupon-like service where consumer can buy discounted coupons for local merchants.
CBS is also planning to introduce news apps in the next few months. “Mobile could be as large as the online space in revenue in 36 to 48 months,” says Ezra Kucharz, president of CBS local digital media.
New Vision Television want to introduce apps at its 16 stations using technology supplied by the commonly owned Inergize Digital. “We have been running mobile apps as a complement to our stations’ websites for a few years now and have seen advertising interest in these vehicles steadily increasing,” says Dennis Elkin, corporate director of interactive media at New Vision.
Revenue isn’t huge yet, but advertiser interest is increasing, he says. “We have stations where a third of their Web traffic comes from mobile,” says Jason Gould, Inergize SVP-GM.
Inergize provides the News Synergy mobile app as well SMS alerts for a number of station groups, including Fisher Communications, Dispatch Broadcast Group and Gray Television.
For some stations, SMS texting is a simple, but lucrative revenue stream. Newport Television’s Fox-CBS duopoly in Jacksonville, Fla., WAWS-WTEV, is using SMS to sell client-sponsored text-to-win promotions.
“We are finding that when we [run an] SMS contest, the number of entries increases at least 10-fold over directing contestants to enter over the Internet,” says Jack Potter, director of sales for WAWS-WTEV.
“Texting is much more convenient than having to run to your computer, find the contest page and enter all the information. More entries and larger databases spell success for our clients.”
Capitol Broadcasting’s News Over Wireless (NOW) has been on the forefront of mobile platforms and has licensed technology to more than 160 stations, including those of Fox, Scripps, LIN, Meredith and Gannett.
According to GM Sam Matheny, NOW mobile solutions include apps for most mobile phones and tablets as well as SMS alerts. “You can expect the core content from the local TV newsroom products, breaking news, weather content, traffic sports, national news, world news,” says Matheny. “It’s customizable by the station and we will give you content to fit your screen.”
Some stations are monetizing mobile apps by charging a modest subscription fee of, say, $2.99 or $4.99 a month, he says. But advertising is gaining speed. More than 90% of the stations using NOW advertising platform have sold local ads, Matheny says.
Beat the Traffic, whose basic app has been downloaded nearly one million times on iPhone, Blackberry and Android platforms, just introduced a version that can be co-branded with TV stations. Beat the Traffic generates about 2,000 to 3,000 downloads per day via word of mouth. With their promotional muscle, TV stations should be able to produce similar rates for the co-branded versions, says Andre Gueziec, CEO of Triangle Software, which operates Beat The Traffic. Beat the Traffic is an ad-supported app, but a fee-based version is available without ads.
Weather technology provider WSI, which got into the business just last year, already provides mobile apps to 143 outlets, including 31 Raycom stations, 18 Gannett stations and regional cable news channel NECN. Its approach is to push out a station’s brand through the WeatherActive product lines for iPhones, Android, iTouch and iPads.
“By combining advertisement, sponsorship and video pre-rolls, WSI’s customers are already monetizing one of the most popular categories, weather, with these emerging platforms,” said said Jim Menard, VP of digital initiatives at WSI.