Conduit enables more than 260,000 publishers, ranging from mainstream names such as Fox News to little-known startups to build apps on its platform. Here, the firm's president, Adam Boyden, talks about app market trends.
¤ Which platform attracts the largest number of publishers at the moment?
In the mobile space, iOS is definitely monetising better than Android, although it's catching up very rapidly. iTunes has done such a fantastic job of making sure that people can buy things with one click, without having to worry about putting in their credit card details every time. Microsoft is also highly attractive to app developers. They often help fund development and provide technical resources because they're trying to build their platform. There's much less competition there. There's an awful lot in the iOS world.
¤ What kind of impact is the Kindle Fire having?
It's still early days, at this point the Kindle Fire is on fire and is doing exceptionally well, and Amazon being behind it is going to have an enormous impact, especially because of the ease of purchase, so I think that's going to help accelerate Android.
¤ Will the Kindle Fire create a fork in the Android Market?
That's the recurrent challenge with Android generally: it's a fragmented platform now. Even if you're talking about mobile phones there are different screen dimensions, different hardware specs. Handset manufacturers have got different versions of Android and this is already a huge challenge for developers. For the sophisticated stuff, specifically games, people are going to have to specialise, because they just won't be able to keep up with the maintenance side.
¤ Who do you ultimately see winning the app race?
I don't think anyone's going to win in the next couple of years, from a platform standpoint, there's going to be a two-horse race for a long time. Apple are very powerful, they've done a great job working with the developers and the monetisation side of things. Of course the iPad is hugely powerful, but I think Amazon is going to be chasing behind. I certainly wouldn't count them out and Android, of course, is becoming really a massive force in the market. From an app developer's standpoint, it's great that it's got lots of handsets, but it's not so great that it's complex, fragmented and the monetisation cycle isn't as sophisticated as the iPhone.
Of course we've got other people entering the market, such as Microsoft; the forthcoming Windows 8 could potentially fundamentally change everything again, because if they really do unify the operating systems between the PC and the mobile, this is going to have an enormous impact. The large developer community around the iPhone and Android is tiny compared to the stuff in the PC world. If they really can make it easy for that huge PC developer community to do mobile as well, that could see a massive increase to the adoption rate of the Windows phone in the next couple of years.
¤ How easy is it for publishers to make money from apps?
If you have distribution all things can be done. If you're successful and have vast numbers of users of your app, you can give it away completely free and have a decent business just through advertising. If you have very little distribution, then you'd better work out a way to extract money.
Partnerships are really key to helping some of these apps get distribution because they work out ways to involve third-party companies who have consumers, and partner with them. Rovio has done a great job of this and there are plenty of smaller companies doing this too.
¤ How does Conduit itself make money?
We generate revenue from tying our publishers together through a network and a marketplace, so that they can trade content and functionality with each other. And when monetised content is traded or they're using our infrastructure to generate revenue, then we take effectively a tax from the transactions and generate revenue ourselves. We started in 2005, became profitable 2007, raised USD8m at the end of 2007/start of 2008 and now have over 300 people. We generate multiple nine-figures a year, and are growing very rapidly.
¤ What challenges still need to be overcome in the app space?
People still focus on the platforms themselves, and the end consumer's ability to have cool devices. People have still not focused sufficiently on the fact that you need content for it all. At the moment, because of the proliferation of these platforms, and the lack of tools out there, it's a nightmare for the vast majority of online publishers in this space. I know some of the guys at Foursquare and they have enough problems themselves just keeping their stuff up and running on the platforms they support today, and that's their entire business. For your average retailer, or local sports team, they just can't do it. It's a nightmare and anyone who can solve that problem is in a very powerful position.
¤ What are the main challenges for app publishers at the moment?
The challenges are threefold; one is the actual technology that is required to build applications that are going to be used by consumers, and this is a very challenging issue because of the fragmentation of the market. Each platform requires different skill sets in order to build apps. The second challenge is building infrastructure so that you can actually optimise the application over time. The third thing is distribution. Underlying all of this is, why are you building the app? Are you trying to drive traffic to your online property, are you trying to increase real-world, bricks-and-mortar sales, are you trying to sell things through the app?
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