Why Most Mobile Innovations Fail, and Will Fail

Amazon probably has quite-different reasons for embracing tablets than many magazine and newspaper publishers do, and the reasons illustrate the difficulty of adapting offline business models to mobile modes.

One rule of thumb used by venture capital investors when assessing technology firms is to look for an order of magnitude better user experience. That rule sometimes is expressed as an order of magnitude better technology performance.

Using that measuring stick, one might argue that, whatever the initial expectations, magazine and newspaper experiences with mobile apps for smart phones and tablets have delivered “end user experience” that is problematic, compared to Amazon’s experience with books.

At the same time, from a provider perspective, mobile apps that were expected to recast newspaper and magazine readership and revenue have proven more complicated than offline publishing, have cost more than expected and provide less profit than expected.

Amazon, on the other hand, arguably has focused on selling digital content with characteristics that are more congruent with the offline end user experience, at costs more controllable and predictable.

While one might argue that tablet and smart phone content availability is not an order of magnitude more valuable to end users than offline versions of those products, one might well argue that the digital versions of songs, videos and books that Amazon sells provide more value than the digital subscriptions magazines and newspapers have tried to sell.

Also, in terms of the “native app versus Web” delivery formats, some content products are better suited, or equally well suited, to Web distribution, compared to app distribution.

Some of the same fundamental questions must be asked of other new mobile businesses that take offline processes, such as shopping, paying and banking, and attempt to create new mobile versions of those products.

Mass adoption will hinge on whether end users perceive dramatically-better experiences, whether we can quantify how much better those experiences are. The notion of “dramatically better” is akin to “order of magnitude” change that can induce massive end user behavior change, while the “incrementally better” notion, with incremental new hassle, is not likely to lead to behavior change.

Looking only at magazine and newspaper apps, there are issues that illustrate the hurdles. Apple’s 30-percent slice of gross revenue is a problem for suppliers, since that is higher than the typical profit margin for a newspaper or magazine publisher. Irrespective of end user experience, it arguably is a “profitless” exercise to sell a digital magazine or newspaper subscription when the revenue split gives a distributor 30 percent of gross revenue.

Among other complications, though, were how publishers could comply with their normal auditing standards used for offline publications, Technology Review notes.

Nor, oddly enough, did mobile apps represent a particularly easy publishing format. Tablets, and some smart phones, support both a "portrait" (vertical) and "landscape" (horizontal) view, depending on how the user held the device.

Then, too, the screens of smart phones were much smaller than those of tablets.

So many publishers ended up producing six different versions of their editorial product: a print publication, a conventional digital replica for Web browsers and proprietary software, a digital replica for landscape viewing on tablets, something that was not quite a digital replica for portrait viewing on tablets, a kind of hack for smart phones, and ordinary HTML pages for their websites.

Not surprisingly, app development costs were unexpected.

But the real problem, some might argue, is that end users expect an online “link rich” experience when using an app for content consumption, much as they expect with Web-based content consumption.

That conflicts with the walled garden that a newspaper or magazine represents. In one sense, a magazine or newspaper is like a compact disc, a collection of items, whereas people increasingly expect to consume items one at a time, in random fashion.

Fundamentally, people consuming in an online channel are looking for songs, not albums. They are looking for stories, not collections.

The point is that transitioning from offline products to mobile products sometimes is not just a matter of authoring, design and software development. Sometimes the product has to be different when it is a mobile-consumed product, not an offline product.

There are many analogies. A mobile payment capability, for example, has to offer an experience that is qualitatively and significantly better than paying with cash or a credit card. It can’t be a little better. It has to be a lot better. And that means it cannot be new experience that is just seconds faster.

There has to be something about the experience that is much better. Maybe a user won’t be able to quantify the changes so easily. But they have to sense that the “new thing” is really lots better than the “old thing.” Slight little improvements won’t motivate change.

You might argue that Square, and other merchant point of sale services offered by Intuit and PayPal have gotten such big traction because they were those sorts of “vastly better” experiences, allowing small retailers to take credit card and debit card payments where they never could do so before.

Something like that will happen for every successful mobile app and use case, period. But most apps and experiences do not represent that sort of clear advantage for end users. Tablets and smart phones, on the other hand, clearly have succeeded in offering user experience and value much better than users had before.

Without such value, new revenue models and businesses will not succeed in the mobile realm.