How long can you keep a Secret? - Fortune Tech
I post this because it’s something I’ve noticed from another direction: discussions around popular apps losing younger users.
Younger users are quick to jump onboard with trending apps. But they are not the biggest online spenders—that’s baby boomers—and they are very likely to quickly discard an app once it’s perceived as less cool. (Just a guess here, but likely it gets ‘less cool’ when the older, financially solvent user segments come along.)
In short: apps are currently being evaluated and funded based on their popularity with a cash-poor, fickle user segment. VCs and financial analysts are not only aware of this, but have decided those are ideal metrics on which to base their investments.
Clearly it is to their advantage to invest in a briefly very popular app rather than an app with a smaller, more stable user base. Which begs the question: why even pretend most popular apps have a future?
(via timoni) Not much to add to this spot on analysis beyond: I’ve had similar thoughts. (via buzz)
It’s interesting. Part of me wants to say that these apps are starting to mirror the film world: groups of people get together, take investment, form a single-use LLC and create a thing that they release into the world. It works for a while, and it’s a big part of the cultural conversation and then everyone either moves on (most likely) or you end up creating a hyper valuable franchise, like Facebook or Lord of the Rings, where exponentially more value is created, and new lines of revenue are created through licensing (Lego toys, games, Marvel’s Agents of Shield) or new products (Vine, ChefVille, Facebook Poke).
The public markets have a love-affair with you (Lions Gate, Disney, Twitter, Facebook), so private equity (Summit Entertainment, Snapchat, The Weinstein Co.) or Acquisitions by larger players (Miramax, Tumblr, Instagram) are common.
There’s a basic mix of monetization through direct consumer sales (movie theaters, flappy bird), subscriptions (Netflix, Netflix), and advertising (Marvel’s agents of shield, TV spin-offs, Facebook, Twitter). Sometimes we have no idea how they’re ever gonna make money but we make them anyway just because they’re kind of awesome and need to exist (Snapchat, Snakes on a Plane, critically loved but unpopular tv shows like Arrested Development).
Funding is being disrupted with new players (Kickstarter + Spike Lee/Veronica Mars, AngelList).
The studio model exists well in hollywood (Disney et al) and after surviving some threats (Pulp Fiction, Robert Rodriguez, indie film) are stronger than ever. In tech? IAC and Zynga get no love. As Facebook transitions to a studio (Messenger, Paper, Instagram, Poke), perhaps this will change and tech, too, will survive the onslaught of the indie LLC.