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iPhone triggers new business in sports news

PARIS —— Anyone strolling the Avenue des Champs-Élysées these days can draw one conclusion: mobile Internet is a fast-growing business in France. For European publishers with M-commerce plans, France is an important bellwether. French sports daily L’Equipe already has turned its application business into profits: “The iPhone has brought old habits back.

People are paying again for content,” said Sebastien Valere, vice president of marketing and operations at L’Equipe 24/24.
While in Paris for a WAN-IFRA conference on how newspapers can use sports to optimise revenues, I saw for myself that mobile computers, mostly iPhones, are out on almost every street corner in the city’s centre. After pioneering Internet applications during the early 1980s with their national Minitel network, the French again seem to be enjoying their role as a nation of early adopters.
Indeed, recent figures confirm that France has become the biggest market for iPhones in Europe. GFK estimates that between 1.8 and 2m iPhones were sold in France by the end of 2009, compared to about 1.4m in the UK. Apple itself has disclosed that 860,000 iPhones were sold in France last month via Orange, SFR and Bouygues carriers, said Jean Sebastien Cruz, chief executive of Netco Sports, a French application development company that has created 200 sports applications for the iPhone.
Cruz issued some bold predictions at the WAN-IFRA conference to underscore his belief in the commercial success of the mobile Internet:

• everybody will connect to Twitter via smartphone;
• computers are going to die, as will Internet addresses;
• and all access to the web will be through buttons and applications.

“Apps are already generating tremendous revenue,” said Cruz, presenting a rough breakdown of Apple’s sales figures.

Applications accounted for more than half of Apple’s $1 bn in global Apps Store sales during the third quarter. Apple’s share from total App Store revenue is only 30 percent; the companies that produce the Apps get 70 percent. Indeed, iPhone apps already are a significant market.
Just recently, Apple said more than three billion applications have been downloaded since its Apps Store was created 18 months ago. “This is like nothing we’ve ever seen before,” said Steve Jobs, Apple’s CEO.
“This will be multiplied by two or three or four in the years to come,” Cruz said.
It is clear that the world is on the verge of a new era in Internet communications. US investment bank Morgan Stanley says we’re seeing “the early innings” of the “the fifth cycle of the last half century.”

Bigger than you think

After mainframes, minicomputers, PCs and desktop Internet computing, it now is the time for mobile Internet computing, Morgan Stanley concluded in its exhaustive study, The Mobile Internet Report, released in December. In 424 pages, 659 slides, and a 92-slide summary, the firm’s analysts sketch the paths of expected growth for mobile computing in the next decade.
Notable quotes from the report:

• “Mobile will be bigger than most think”
• “Game-changing convergence”
• “Apple is driving the platform to change to mobile computing”
• “Some Companies Will Likely Win Big (Potentially Very Big) While Many Will Wonder What Just Happened.”

In the news business, many publishers are wondering, “What will happen next?” Financial challenges mean little money for investments in untested business environments such as mobile computing. But in the sports media business, at least, some newspaper publishers strive to be among the winners.
France’s national sports daily L’Equipe has already turned a small profit on its M-commerce business by turning its popular brands into iPhone apps that users buy in the iTunes store.
For 0.79 cents, iPhone users can install the L’Equipe logo on their iPhone and receive a selection of French sports news from the paper. Users have criticised this app as one that charges readers for content that is free on the website. Those whose main interest is football can buy the FranceFootball app for 1.59, with breaking news and live scores. For 0.79 additional cents, users can receive mobile club alerts on each individual club in the main French league.

“We’re the only French publisher whose information is not free,” said Sebastien Valere, vice president of marketing and operations at L’Equipe 24/24. “The iPhone has brought old habits back. People are paying again for content. We think it’s a killer app.”
For any mobile business model to be successful, a market must have a sufficient number of mobile computers. France is clearly moving that direction but is not there yet, said Valere.
Mobile advertising in France is estimated to become a market worth 15 to 20m euro per year.

“That market does not really exist today,” Valere said.

Innovation via iPhone

L’Equipe has decided not to develop its apps yet for Google’s Android and RIM’s Blackberry. Instead it focuses first on the Apple platform because this is closer to achieving critical mass. L’Equipe believes that the ease with which subscribers can pay — via the iTunes platform — is one of the success factors for the Apple platform.
“We’re going to innovate through the iPhone and then migrate all apps to other platforms via third-party apps producers,” Valere said. “The smartphone will be the right device to meet consumption patterns.”
Any innovative publisher with a brand to leverage still has to deal with a level of uncertainty when trying to get the ‘new product’ on the shelves of the iTunes store.

“It’s hard to emerge in the Apple store,” Valere said.
Apple has a policy under which it vets all applications offered by developers; some describe this as a “walled garden.”

Although the company promises to complete this vetting process within a week, in practice it takes about a month. And it is always possible Apple rejects the app.
Another factor that publishers have to take into account, Valere said, is that apps need to be maintained and updated; developers must constantly work on upgrades.
Not all sports information services are convinced that mobile computing is a place where they have to be — at this stage. Mobile advertising remains full of challenges, and is not growing rapidly because of the poor state of the economy, said Constantine Kamaras, CEO of the Sports.gr service in Greece. 
“It’s certain that the seismic shift has begun,” Kamaras told the conference. “The importance of carrier portals is shrinking very fast. But partnerships with carriers are still vital for revenue. Size does matter. We don’t believe that 2010 will be the breakthrough year. Not yet. We expect critical mass in mobile commerce after 2011.”

Playing around

News and sports, meanwhile, are not the main moneymakers in the App Store. News applications, with a 2 percent market share, only rank 15th, according to Morgan Stanley. Sports apps, with 3 percent, just make it to the top 10.
Games (19 percent), entertainment (15 percent) and books (13 percent) are the most popular applications.
France’s Netco Sports developed its first sports application in 2008.

Netco now has about 200 products on the App Store shelves, mostly in football, with apps for fans of Europe’s leading football clubs. Its apps are among the most popular in France, the UK, Italy and Spain. By 2012, it plans to have a total of 2,500 apps for 15 different sports, says Cruz.
According to Netco, users in the Nordic countries, Switzerland and Belgium are particularly good buyers while those in France, Italy and Spain are not as eager to buy apps. For every 150 apps downloaded, one of them is sold, he said.
Much more than is the case with news, sports news and information appeals to a social network built around a particular club or sport. That suggests there is an abundance of opportunities for newcomers with sports applications in this mobile computing business. It’s clear, though, that there are still significant hurdles to be overcome by any publisher, or developer, who wants to step into the field.
Some games have been played already, but the tournament has only just started. French teams look well placed, but chances are that the new champion will be one that we have not yet heard of.
—-
Flickr images from users Jorge Quinteros

Tags: advertising, android, apps store, belgium, blackberry, constantine kamaras, desktop internet, france, greece, internet applications, iphone, jean sebastien cruz, l’equipe, mobile computing, mobile internet, mobile internet computing, morgan stanley, netco, niche, paris, sebastien valere, smartphone, spain, sports.gr, switzerland,

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