Wednesday, December 9, 2009 20:37 - 2 Comments

The Birth of a New App

CNBC Real-Time’s Launch Is a Step Closer to Paid Business Model

Don’t get me wrong, it is still free, like many other apps. But the immediate great  reception and the successful switch to a mobile platform bodes well for a bet on the app’s future of a subscription-based model.

CNBC Real-Time launched on November 19^th, amidst news industry’s multiple unrequited attempts to reverse the free media model. Before CNBC, a few other news apps are already available, for free—CNN Money, Yahoo Finance and the Bloomberg app, for example. None of these financial apps offer real-time stock quotes or video streams that the CNBC does, which makes the biggest differentiators between CNBC Real-Time and the rest, therefore opens the door for possible future subscription.

Many publisher s of magazines, newspapers and cable contents recognize that while going on-line is a must in terms of retaining readers, it is a killer on their traditional but sustainable subscription models. Yet only a few are fully aware that in the age of iPhone, going mobile might be a cure to reverse to the golden subscription business model that has worked well for centuries.

The logic is simple: if it’s hard to wean readers off the free business model for the online content, charge on a new platform where people still haven’t got addicted to read, for free.

With a vision in mind, CNBC’s tech team spent  half a year to deliver this very first app.

“What would you go home for, your book or your phone?” says Scott Drake, VP for CNBC Digital and leader of the app development team. The answer led them to the quest of a new app.

The team’s solid market research shows many CNBC viewers are sophisticated smartphone users and early adopters of financial news apps. Based on the user activity data for CNBC.com mobile which was launched one and half years ago and has grown exponentially ever since, 50% of traffic has been drawn to live stream data verses 20% for CNBC.com online. When iPhone came out, 23% traffic for CNBC.com mobile comes from iPhone. That’s how Drake and his team decided that iPhone would be the first target for their application and real-time stock quotes had to be a big emphasis.

“We go where the eyeballs are,” Drake says.

As of Oct 30, the app had 217,000 downloads within two weeks and was rated the most popular financial apps in the iTunes Store.  No other financial apps deliver real-time stock quotes. Not even the Bloomberg app.

Yes, the app is still free for download. But how to monetize this has always been in Drake’s mind. For now it is a move for strategic competition in the growing mobile world. But what’s next? Drake’s team is planning to add a few premium services for subscriptions and also develop app compatible with other smartphones such as BlackBerry. A few possibilities are guest alert and live-stream videos. Drake says technology allows them to do micro-transaction too but the subscription model seems more viable at this stage.

Right now, instead of resorting to online ads, the app chooses to have daily display sponsorship (a banner at the bottom of each page) to ensure good user experience.

Of course, the app is far from perfect yet. “Well-designed user interface and a great concept application. but too buggy and crashed frequently. also a bit hit on battery consumption,” writes one user on the iTune review page. Still, the app is one step closer to the tunnel-end light that the media industry hasn’t seen for many years.

Click to read The Birth of a New Quiz and The Birth of a New Model