Over the past few years, I've spent a lot of time contemplating paid content strategies and alternative revenue streams for digital news operations, so when I recently attended the Mobile Games Forum, it felt like catching a glimpse into a parallel universe eons ahead in terms of user monetisation.
While news publishers are starting to turn to paywalls and move away from an almost complete reliance on advertising, game publishers are already creating experiences that attract millions of paying users and, according to Shai Drori of Appsfire who spoke at the event, "most revenue for mobile games is coming from in-app purchases, not advertising."
Mobile games are generally categorised into two groups when it comes to monetisation: pay-to-play and free-to-play. Pay-to-play apps act much like the paywall of The Times of London, in that one must pay before downloading the app and accessing any of its content. Free-to-play apps are free to download, and generally a portion of their content is available to all, while certain levels, power-ups, or accessories must be unlocked via in-app purchases. As the pay-to-play dynamic is rather binary and the majority of news paywalls are not hard like that of The Times, I found the free-to-play games with in-app purchases had the most to offer in terms of insight for the news business.
Here are four things news publishers can learn from mobile games publishers.
1) Payment can come in many forms
When it comes to in-app purchases, games usually employ a credits system which disassociates the cost of a purchase within the game from the real currency value of that purchase (ie. if a magic wand costs 15 credits and you can buy a bundle of 70 credits for $4, how much does the magic wand cost? Who cares, just buy it already, it's shiny!). Credits are most often amassed through gameplay or bought in bundles with real money, so players are effectively rewarded for engaging in certain ways and these rewards give them access to enhancements in the game.
Imagine this in a news context, where the user activities that are valuable to a publisher - like leaving insightful comments, or inviting friends to become new registered members - are tracked and rewarded with credits that give readers extra access to paid content. In May last year, a South Korean online magazine called Sasangge was slated to release an interesting credit-based paywall structure that similarly rewarded social activity. (Despite this effort garnering a bit of buzz in media reporting circles last year, I couldn't actually see any evidence of the social paywall in action on sasang.ge)
Here's some further food for thought: Rovio's latest installment in the massively popular Angry Birds franchise, Angry Birds Go, employs a dual-currency system where activity in the game earns a player coins and they can buy more valuable gems with real money. Could you imagine a similar mechanic in a news scenario? What if some paid products could only be purchased with one of the two currencies?
A word on recent attempts at the social paywall
News outlets have just begun to experiment with what they'll accept as currency, with the Chicago Sun-Times testing a social paywall earlier this year that allowed users to pay with Bitcoin. While accepting payments in Bitcoin seemed a fairly obvious PR play, the other new forms of payment provided through the BitWall tech (the solution the Sun-Times tested out) included choosing to view an ad unit before accessing an article, or sharing that article to social media.
On an article about the Chicago Sun-Times experiment, one commenter tried to imagine what tweeting for access to an article would look like:
"Here's an article that I can't make a comment about because I have no idea what it says! Lol"
If building deeper, more lasting relationships with readers is the goal, then the focus should be on rewarding authentic engagement and the recruitment of new members that also add value to the community. However, encouraging throw-away tweets with hollow word-of-mouth referrals is unlikely to shift the needle when it comes to building reader loyalty and driving more subscriptions.
2) How to charge for personalisation
In free-to-play mobile games, there are many types of in-app purchases publishers employ (here's a whole list of the in-app purchases available in Angry Birds Go), and often the purchases either enhance the gameplay in some way, or let players customise their identities in the game (or both!). For example, one of the benefits of purchasing a premium profile in the social word game Ruzzle, which has over 50M downloads, is that players can pick from a collection of special avatars to represent them in the game. For Line, a free mobile messaging service that includes games for users, 60% of their $338 million in revenue for 2013 came from in-app purchases in their games. Sticker purchases alone accounted for another 20% of their revenue.
Now, adapting the mechanics of buying faster cars and special avatars into a news context requires imagination. But, if we recognise that underlying these purchases are generally a willingness to pay for both personalisation and a better user experience, then the shift becomes more feasible.
Here's one idea: readers might be more willing to pay for tailored experiences around specific topics (rather than all-access to general news) - sort of like buying a power-up for rugby reporting. Perhaps this power-up also gives them features like premium push notifications on that topic, and invites to members-only discussions led by journalists. What if users could craft personalised profiles with their favorite news site by purchasing memberships to a number of these distinct, interest-based communities?
3) There are premium uses for user data
One of the other benefits of Ruzzle's premium upgrade is access to player statistics and ranking. Tracking a player's activity in a game and frequently sharing indications of their progress in the form of scores and statistics are essential elements of most gaming experiences. However, this premium use of user data is still a very foreign concept for most news sites. Publishers are increasingly tracking the usage habits of their digital readers, however this is generally consulted on the aggregate level, and very rarely shared with users. If however, the data on an individual level was presented to users in a valuable way, it could provide them with a better, more-personalised experience - one they might even be willing to pay for as part of a premium upgrade.
For instance, imagine if premium members were provided notifications about how well-informed they were on the recent events in the topic communities they subscribe to. The message could even include an element of social ranking, like
You've viewed 80% of all our Rugby coverage from the past week. That puts you in the top 5% of your fellow members! Here are the 3 stories you didn't get to yet =>
Reengagement was a topic that frequently came up during the conference, this is one strategy for news that leverages personalised information and social pressure to push a clear call to action (and the messaging can be adjusted for those less enagaged members as well). It's an idea I've previously spent some time with, you can read deeper into it here =>KnowledgeBase: A Gamified Reader Activity Hub.
4) Focus on the cross-over experience
Another common topic during the "user acquisition" panels at the Mobile Gaming Forum was the cross-over experience. Alex Dale, CMO of King, which publishes the wildly popular Candy Crush Saga game, explained in an interview with Pocket Gamer:
With Bubble Witch Saga and Candy Crush Saga we are providing a single game experience across multiple devices...Your progress in the game, your social graph and your virtual goods will be synchronised. Our development philosophy is very much cross-platform.
What's commonplace for the gaming world is only just now starting to be seen in a handful of news apps - if you can start a game on your desktop and finish it on your phone, why can't you start an article at work and pick up where right you left off on your mobile during your commute, then finish it on your tablet when you get home?
This would be especially useful for readers when following an unfolding news story, and could certainly be included with the suite of premium features previously mentioned.
As more and more traffic to news sites comes from mobile devices, some of the basic features of mobile games will inevitably show up in the news ecosystem - elements like the use of alternate currencies, and a strong cross-over experience are indeed already being practiced by the more advanced and courageous news outlets.
But most news publishers are just beginning to properly develop their mobile strategies, and those who want a glimpse of the bleeding edge of mobile user acquisition and monetisation need look no further than to mobile game publishers.
* This article was originally published on The Media Briefing