Aptus Consultants

Apps success opens up mobile revenues for Sky

The sale of premium content aims to capitalise on the 1.8m downloads of Sky apps as well as to boost the £60,000 Sky is understood to be generating a month in ad revenue by selling display and pre-roll inventory within its mobile apps.

Rival publishers, including Dennis, IPC, Guardian News & Media, Telegraph Media Group and Trinity Mirror, are eyeing the mobile apps market as a potentially lucrative income generator via both advertising and premium content sales.

More than 2bn apps have been downloaded via the Apple App Store since its launch in July 2008 and the market is set for further growth as networks Orange and Vodafone start selling the iPhone.

Sky will become one of the first major publishers to enable in-app billing following Apple’s decision earlier this month to allow free-to-download apps to include charging options.

David Gibbs, general manager for mobile at Sky, said there was a great opportunity to sell goal highlights to existing users via its app.

“Our focus is on developing a free ad-supported market and our view is we can sell premium services to that userbase,” he said. “There’s an obvious fit between Football Score Centre and what we might do with our Premier League rights to build on that installed base of users.”

Sky launched its 24-7 Football goal highlights service in August 2007. It’s powered by content delivery partner Saffron Digital and is available on all five UK operator networks. Since the launch of the Sky+ remote record app in April, Sky has achieved 1.8m downloads of this and its other three free iPhone apps: Sky News, Sky Sports Cricket Score Centre and Football Score Centre.

The media company is generating 50m ad impressions a month and serving more than 1m video streams via its mobile apps. It’s charging CPM rates of up to £10 to advertise and seeing click-through rates of 3%.

Leading consumer brands including Bacardi, Intel, Lucozade and Sony Ericsson are among those to have bought ad space in the Sky apps.

Giles Ivey, sales director for Sky Digital Media, said the opportunity to make money would grow in line with expanding reach. “We’re very encouraged by the number of downloads we’ve had so quickly,” he said. “This is the next big opportunity for brands in the digital space.”

Ivey now plans to introduce a range of “more engaging” formats such as expandable banners and clickable pre-roll videos.

Sky’s distribution of its premium content on mobile is part of a wider move to harness new platforms. It follows a deal with Xbox which sees TV service Sky Player streamed via the games console from this week.

Telegraph Media Group has produced four apps, both paid-for and free, and has signed Carbon Trust and Cisco as sponsors.

Its head of mobile, Maani Safa, said sponsorship for free apps was crucial. “Paid-for apps don’t seem to work without a massive marketing push,” he said. “Our strategy is to make a good app, get a high number of downloads, then look for a sponsor.”

Safa added that while in-app billing for news was unlikely to work, there’s an opportunity to integrate richer premium services like games.

A rival mobile publisher executive warned the platform shouldn’t be used as a trojan horse to introduce a charging model for existing online content. “You could make people pay for content but an app should be more to do with providing functionality and a superior experience,” he said.

Julien Theys, mobile research analyst at Screen Digest, said the iPhone couldn’t be ignored as it was the device most likely to bring a return on any investment in mobile.

“The obvious device to develop an app for is the iPhone because of its installed base, the propensity of people to pay, the stickiness of the platform and ease of billing,” he said.

Original Article