Sean Percival's mockup of the Facebook phone
Two major stories I read today have been rattling around in my head.
1. Apple’s in-app subscription policy changes
2. Facebook-branded and integrated smartphones
First off, Apple’s changes will drastically impact apps I use and love like Kindle, Pandora, and Netflix. Plus, they will put the screws to all content owners hoping to reach the promised land of online subscriptions.
In summary, Apple’s new policy states than an app offering a subscription to its content, must offer in-app purchasing at or below the price offered to consumer buying directly from a website, if one exists. Plus, Apple takes 30%. In case you’re wondering, I’ve also seen updates that Kindle books also fall under these rules.
Lots of ink is spilling about this being bad, but the jury is out for now. We’ll see. If nothing else, the message is clear; the App Store makes money for everyone, especially for Apple.
Next, there’s the Facebook phone, or rather the phones that have Facebook tightly integrated into their experiences. The HTC models (ChaCha and Salsa) even sport a Facebook hardware button. You read that right, see here the real deal IRL.
Design and other judgments aside, Facebook’s goal is to be the internet, so why would mobile be any different?
The nagging feeling I’ve had is that these are related stories.
Here’s how. Maybe Apple’s subscriptions work out great, and everyone eats ice cream together under a rainbow. Maybe the major content owners revolt and flock to Android and other platforms.
Or maybe they go straight to Facebook.
Hear me out first. Facebook is embracing web app standards on the mobile web and in their own developer community, e.g. the deprecation of FMBL.
Meanwhile, every single brand has a Facebook page. It’s the new AOL keyword. Take note of the ads you see where a URL is included. I’d say 80% of them include a Facebook page, and of that number, a surprising number include only a Facebook page.
That’s right, no website for us, only a Facebook page.
Kind of a big deal and major shift.
So, if Facebook’s making a mobile push, which they are, and they’re using web development standards, which they are, then why wouldn’t content producers create Facebook apps that include their content for mobile consumption?
Take our Facebook page for example. It’s this content, on Facebook. No magic really, could be more, but it’s not.
If I’m a magazine, why wouldn’t I just push my content to my Facebook page to all my fans?
One problem is the price, i.e. free, for now anyway.
Here’s where Facebook wins though. As I noted, you can see a lot of juicy demographic data about your fans on Facebook using Insights. If you pay, companies like WebTrends (@webtrends) offer even more detailed analytics for your page.
One key piece missing from the Apple subscription agreement is that Apple keeps all the demographic data. From the press release (h/t TechCrunch):
Protecting customer privacy is a key feature of all App Store transactions. Customers purchasing a subscription through the App Store will be given the option of providing the publisher with their name, email address and zip code when they subscribe. The use of such information will be governed by the publisher’s privacy policy rather than Apple’s. Publishers may seek additional information from App Store customers provided those customers are given a clear choice, and are informed that any additional information will be handled under the publisher’s privacy policy rather than Apple’s.
So you have to agree to pass your data on to the publisher, which is a major shift.
On Facebook, you also have to agree to allow an application to use your data, but if the producer is dangling a free offer or a discount for liking, how many people would think twice?
Anyway, just trying to connect the dots, but am I crazy to think that Facebook is the new home for mobile content?
Find the comments.
Facebook as the new AOL. Yipes.
If producers of paid content baulk at Apple’s 30% cut, are they going to run straight to another company with full control of the supply line ? What would stop Facebook demanding the same cut if Apple gets bounced ?
Now, if I make an in-app purchase on Facebook through an iPhone Facebook app, does Apple get a cut ? If so, who pays ?
That has always been Z’s goal for FB, i.e. be the new internet, the better one where you cannot hide behind anonymity much to the glee of advertisers.
FB has turned the screws on games, forcing them to use FB Credits and pony up 30% to FB. That’s the magic number I guess.
However, I’m sure Facebook would negotiate the split for large content owners, if only to guarantee the traffic. Don’t discount the demographic data too. Even if the split were 30%, the content owners would get the data that Apple won’t let them have without an opt-in.
I don’t think the native iOS version of FB allows for FB apps to do anything, especially in-app purchasing. This is probably a combination of development investment and revenue-sharing concerns. FB’s push into mobile web signals that their native efforts may be waning.
FB offers nothing to publishers in the way of monetizing their content. In the same way Apple makes online music profitable, they may be able to make online content profitable and sustainable. FB offers lots of eyeballs, but iTunes users are much more likely to click the Purchase Subscription button.
FB does have the platform for monetizing content, including in-app purchases. Look at game studios like Zynga. The classic model here is give away a little, offer more for pay. Even if you fail to convert, you get valuable demographic information.
Back in 2007, we all would have laughed about games on FB, especially about for-pay games on FB.
Don’t sleep on FB as a viable content distribution channel for pay.