Mobile Apps Are Early Moneymakers for Taylor Swift, Linkin Park
It’s not very common today for consumers to purchase items in a physical retail store with a wave of their mobile phones–yet. But applications are helping to generate significant revenues online.
Beverly Hills, Calif.-based Mobile Roadie has developed a platform that makes it easier for brands, musicians and others to build applications for the various mobile platforms, like Apple’s iOS and Android. Many of the applications provide access to news, streaming music, live or recorded videos and photos. They can also offer the ability to purchase music, video, tickets and merchandise.
From Michael Schneider’s position as CEO of Mobile Roadie, he has a 30,000-foot view of how consumers are making purchases from mobile applications.
In several instances, he’s seeing the applications power thousands of downloads, and in at least one circumstance, generate hundreds of thousands of dollars in revenues. “[The iPhone is] like an ATM machine in the pocket. It’s incredibly easy for fans to spend money. You just have to enter your iTunes password.”
Country pop star Taylor Swift’s applications have generated more than 600,000 downloads in the U.S., totaling more than “six figures” in digital merchandise sold, according to Mobile Roadie. Nine months ago, when the Taylor Swift apps were released, 10,000 fans tried to buy concert tickets in the first week, but not all succeeded because they were sold out.
Likewise, Linkin Park’s application directs people to a mobile optimized store, where large, easy-to-tap buttons are used to complete purchases. Fans of the multi-platinum rock band have spent more money per purchase over their phones via the apps than on purchases made on the full Linkin Park Web site, Schneider said.
These mobile commerce trends are not just occurring among musicians; top retailers are seeing the trends pick up, as well. EBay expects $1.5 billion in gross merchandise sales via mobile this year, which is three times the amount from 2009. And Amazon said in the summer that it had sold more than $1 billion in products over mobile devices over a 12-month period.
Still, Schneider says these are early days. Apple’s devices, including the iPhone, iPad and iPod, are the best at generating sales because of the easy integration with iTunes and one-stop billing.
Meanwhile, Android offers a less polished experience, leading Mobile Roadie to recommend to clients that they direct customers to Amazon.com’s MP3 store, or other third parties. The billing systems are also out of whack. Users may have to use Google’s or Amazon’s own billing platform, or be bumped out to the browser, where they might be offered a choice of PayPal, Visa or MasterCard. “Android doesn’t have the iTunes equivalent, and therefore hasn’t been as successful at monetizing digital content,” he said.
This week, rap mogul Diddy, a.k.a. Sean Combs or Puff Daddy, is releasing an app using Mobile Roadie’s platform in coordination with his upcoming new album release on Dec. 14.
It will have links to all of his previous albums to encourage fans to complete their album collection, but it also will include the ability to scan so-called QR codes. Fans will be able to find these barcodes on promotional materials, such as posters. If scanned, they’ll offer users the ability to download the app, or if it’s already installed, they will be able to unlock full tracks or other content for free.
Schneider said the experiments in mobile commerce are just beginning to happen. “Right now people are just wrapping minds around mobile being a critical and important part of selling and the fact they can do really big numbers,” he said.