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Thursday
Aug252011

Why You Should Build An App

I went to a dinner party the other night. At the table were a whole collection of fascinating people. One person had helped build Facebook, two worked at Goldman Sachs, one lady worked in environmental conservation at the Bronx Zoo.

There was one guy there who worked for Bloomberg.

Bloomberg is the namesake of our billionaire mayor here in NYC, Michael Bloomberg. He founded the company with a few of his friends in 1981 and it’s now worth an estimated $6.9 billion.

Bloomberg’s main business is selling big, expensive terminals to financial companies and organizations. The terminals show the traders information about the market and if the traders know how to interpret the information correctly they can use it to make a lot of money. It costs about $1,500 a month to have a terminal.

But, actually, I didn’t know about the terminals. I know Bloomberg as a news organization. They provide financial news through their TV station, radio station, website and newspaper.

My dinner party friend told me an interesting anecdote about Bloomberg. When they first built the terminals they found that the traders needed not just financial information about the market – they also needed to know about what was happening in the world that might affect the markets. Bloomberg originally outsourced it’s reporting to the Associated Press, but eventually the news feature of their terminal became so important that the prospect of a strike or other disruption from the AP became too much of a risk to their business. So they decided to do the reporting themselves – and Bloomberg’s media empire began.

Here’s the thing, though – the Bloomberg media outlets actually lose money for the company. The TV station, the newspaper – they’ve never made any money. It’s a kind of symbiotic relationship between the two sectors of the company – the terminals need a reliable news source and the news source needs money.

The Future of Journalism

That’s a remarkable model for monetizing content, isn’t it? Both elements are central to the product – the terminal and the content – but they aren’t valuable unless they are combined together.

I think this is the model for the future of journalism. Companies like Google, Twitter and Facebook increasingly need a steady flow of news, human interest stories, investigative reporting, reviews and other kinds of old-fashioned journalism to feed the huge numbers of people that voraciously eat this content on their sites every day.

Google, Facebook and Twitter, however, don’t pay for this content. Google finds it and reposts it on their news feed, users post it themselves on Twitter and Facebook. Google and Facebook, if not Twitter, are making a lot of money off this kind of content usage, and none of it is finding it’s way back to the newspaper’s where the content originated. It’s not the case that news doesn’t make money today – it’s just that the money is being rapidly redistributed away from the news companies that make it.

So eventually the newspapers will go out of business. But then Twitter, Google and Facebook won’t have the same quality of content. Then they’ll have to start creating it themselves – just like Bloomberg had to do.

Sure, you could argue that this content can all be crowd-sourced from people’s blogs, celebrity tweets and iPhone videos. I think there will be some of that, but you’ll never convince me that all of our news and content will be entirely crowd-sourced in the future. There will always be an educated, professional group of content-creators that run the highest levels of the business.

This same phenomenon is already happening in the music business. Apple’s best revenue-producing product isn’t music in the iTunes store – it’s the products that play that music, like the iPhone, the iPod, the iPad, etc.

But you and I can’t make our own iPod and sell it to fans. So what’s the indie artist to do?

Bundling in the Music Business

Embedding your music in another product – a mobile app, for example – is going to be the way to sell music in the future.

Consider this article, published just 5 months ago in the New York Times. It highlights the major labels’ mad dash to get into the mobile app market. Bjork new album will be a collection of apps rather than a list of songs. UMG is creating an app for Nirvana’s “Nevermind”.

They aren’t the first – this has been happening for several years. Mobbase.com is a company based on (nearly) this business model.

And it makes sense. Just last month news surfaced that Apple has now sold more apps than song downloads – even though iTunes had a nearly 4 year head start on the App Store.

But major labels are as greedy today as they were 20 years ago. I’ll believe they’ll create bloated apps that require too much of their users – apps loaded with Facebook “Likes”, “Tweet this” buttons and “Sign up for our spamletter” prompts. They’ll track users clicks, analyze their preferences and deliver personalized and invasive advertising.

Forget the major labels – we should all be doing this in the indie market for our own music. Remember? We don’t need the major labels anymore – isn’t that what the interet gave us?

Make Your Own App

Think about it – let’s say you record your new album on your own computer at home. Let’s even say that you have the album professionally mastered and that costs you $1,500.

See also: Creating a Budget for Your New Album

p>According to OSXDaily.com, a simple iPhone app probably costs between $3,000 and $8,000 to develop. Let’s pretend you go on Elance or Odesk and you get someone to do it for $3,500. Add that to the cost of the mastering and you’ve spent $5,000.

$5k isn’t that bad. It’s used to cost more than $5k just to make an album. (And, actually, if you were creative I don’t think you’d have to spend that much.)

Let’s say your music is totally great and the app is really fun and you have average success selling your app in the App Store. According to a 2010 article in TechCrunch, even average selling apps were moving 44 units every day. If you made $1 on every sale – you could break even in 4 months and bring in an extra $1,320 a month thereafter. Not terrible for an indie release – and imagine the potential revenue if you were lucky enough that your app became popular.

My App

I’ve always said that I never give theoretical advice on this site. I never tell people to do things that didn’t work for me personally or that I would never try myself.

I started developing my app yesterday. If it’s a failure and I lose a bunch of money I’ll take down this article. If it works I’ll tell you about it.

So you can wait to hear from me or you can get started. Which will you do?

References (1)

References allow you to track sources for this article, as well as articles that were written in response to this article.

Reader Comments (18)

I don't agree on this. Yes, it would be cool to have a real great app (not a standard frozen one) but it costs way too much for independent musicians. With that money, we can do much more productive things, as (as you pointed out) recording new songs and prepare some interesting packages for our listeners.
Also, consider that musician app should be set free (almost all are free out there).

I'm waiting to see how you will end up in this - thank you :)

August 25 | Unregistered CommenterFabrizio

Building an app isn't that expensive as long as you don't fall into the idiot trap set by the internet marketers out there. DON'T pay anyone to show you how to build an app. This is the latest growth industry being pushed by a scam team known as The Syndicate. If anyone offers to sell you a course for hundreds of bucks claiming to teach you how to build and market an app, IT'S A SCAM!

August 25 | Unregistered CommenterApp Builder Scam

I'm not seeing the point of an app for a band. What is it going to do, other than deliver your music? From a listener's perspective, I'd MUCH rather just download tracks from iTunes, Amazon, etc., than install an app...that way the music I just bought is in the same place as all my other music, accessible the same way, gets backed up with all the other music, etc. The other things I've seen suggested for band apps, like tour notifications and journals, are just one Google search away for me now...certainly not something I'd install an app for, even it was free (it's just going to clutter up my phone). Unless I can understand why I'd want to get a band's app as a listener, I'm not even going to begin to consider making one myself, and I couldn't recommend it to anyone else either.

August 25 | Unregistered CommenterSmootz

One step: http://fantrail.com

Free to build, only fees you pay are the same Android Market or iApp Store fees any other dev would pay. They're still coming out of beta, I believe, but there you go.

August 25 | Unregistered CommenterMatthew Ebel

I build iPhone apps and mobile websites, so this article is intriguing to me.

I think for most bands, an app is an expensive mistake. Don't forget you're not really earning $1 per sale. Apple and other app stores will take a cut. Apple also keeps 30% of anything you sell through your app, even if the app itself is free.

That said, I think there are ways to give the idea some legs:

- make the app about your local scene, not just your band. Partner up with your local music paper.

- band together with bands you're friendly with and make the app about your collective.

- create a "branded' app of a type that's already popular. To-do lists, calendar apps, etc.

- if your music fits a particular activity, build the app around that activity. Example: if you play high-energy heavy metal, create a workout app for the gym. If you're a guitar virtuoso, create an app that helps people practice scales.

- make your album ONLY available as an app. This will only work if you really leverage what apps can provide over standard packaging.

In other words: don't just throw your album's liner notes into an app and expect it to sell.

Considering that most indie records still don't move more than 100 copies, how likely is it that a band can sustain 44 app sales per month past break-even? Unless your app provides something that people can't already get from a website, you're probably better off offering the app for free.

Edit: just saw Matthew's post on Fantrail. That's probably the best out-of-the-box implementation of a generic artist app I've seen so far.

August 25 | Unregistered Commenterscottandrew

Gigabooxx is a free music mobile app which allows Artist/record companies to build there own sight. You also get a set off marketing tools to drag fans to the mobile sight threw QR codes and SMS.at live gigs where they are most likely to make Impulse purchases.

www.gigaboxx.net

August 25 | Unregistered Commenterhughsc

Apps are completely silly for most musicians. To work, your fans have to be so rabidly in love with your stuff that they will download and install YOUR app on their device and that they will not be annoyed when you use push notifications to tell them about updates. (If you don't use notifications, you must assume that they are going to check your app on a regular basis, which is no more likely than that they will go to your website "just because.") You are MUCH better off building a large email list and working on your social media skills. Apps are great if you are a big media outlet, or a creator that has lots and lots of content to push out, or MAYBE a musician with a massive fan base---but for most individual musicians, the only people to benefit would be the app developers (who of course think apps are great for EVERYTHING)

August 25 | Unregistered CommenterOzmotic Media

The tools for making apps are rapidly dropping to zero cost. Additionally, the hard-to-learn native development tools created by manufacturers (Apple and Google) are increasingly being co-opted by the emerging web standard called HTML5. These days, it's very possible for a novice web developer to use tools like this to create apps that work the same on the web, iOS and Android. HTML5 gives the developers the choice of whether or not to post to the manufacturer's app stores and endure their censorship and 30% "tax" on revenue, or to use the open web and keep all the revenues (but be responsible for discovery)

Our platform, appMobi supports this, and we're seeing thousands of apps like this created every month.

August 25 | Unregistered CommenterRoy Smith

This is the dumbest post I've seen here in a while. An absolutely lame idea. Bands, don't do this if you want to succeed.

August 25 | Unregistered CommenterMichael Doves

No, I'm not suggesting you make an app for your band or for your album. I'm suggesting you make an app and you embed your music inside the app. The customer is buying the app, not the music. That's important, because like it or not customers have decided that music is not valuable and they don't want to pay for it anymore. But apps, if we are to believe the graph above, are something people are more willing to buy.

When a musician lands a TV or movie placement they get paid because their music was embedded in the movie or TV show. But people don't come for the music, they come for the movie or the TV show and also get the music.

Apps are the new entertainment. Make an app that people want - it doesn't have to be complicated. I just got the quote for my app and the whole thing will be less than $1k to build. That's not much of a risk.

In fact, the one thing that makes me worry about this idea is the fact that apps are so CHEAP to have made. The record industry worked because record labels had a monopoly on the supply due to the limitations of technology. The average Joe couldn't create a record, so he had to rely on the major labels to make them for him. Joe was willing to pay money for the product because he wanted it (high demand) and he couldn't get it if he didn't buy it (low supply).

The thing that turned the record industry on it's head was the explosion of supply because of technological advances. If we can find another technology that is somehow able to limit supply relative to demand, then musicians can make money on recorded music again.

The app store seems to be doing that right now. But as it gets easier and easier for Joe to make his own app, it'll ruin the demand/supply ratio again.

And maybe the ratio has already been ruined? 200,000 apps in the App Store and 15 billion downloads to date. For less than $1k, I'll take my chances. And when this article becomes out-of-date I'll try the next thing.

August 25 | Registered CommenterMusician Wages

I'm not suggesting you make an app for your band or for your album. I'm suggesting you make an app and you embed your music inside the app.

Another idea: why not make your music available to professional app developers? There are whole companies out there that do nothing but make apps and games for mobile devices, and they need music. That way bands can earn licensing fees without having to conceive, market and apps themselves.

I just paged through the Apple App Store, looking at music-related apps. The Top Paid apps include karaoke apps, streaming audio apps, guitar apps (like tuners), and toys like "I Am T-Pain." IOW, hardly any artist-specific stuff.

Top Free apps are streaming: Pandora, Spotify, etc.

It's not until you get to the Release Date category that you find apps by artists. They're almost all Reverbnation, identical little app-sized ego shrines, They have no ratings (presuming because no one is using them).

So yeah, I think the smart move is to be in the first category: build an app that incorporates your music, but isn't about you.

August 25 | Unregistered Commenterscottandrew

Hi, what do you think about using a web service for making iPhone apps? I use http://snappii.com, and I love it. I'm not a developer, snappii makes it easier to make apps in minutes.

@ Ozmotic Media

Ozmotic Media said: "the only people to benefit would be the app developers (who of course think apps are great for EVERYTHING)"

I totally agree with you. Apps are completely useless for indie artists/bands. Apps are just one more way for some software developers to earn more money.

What an indie artist has to do, is to upload his music to his official website, and tell his fans to download it from there. No apps and no major digital distribution outlets are needed. It's a waste of money.

August 27 | Unregistered CommenterSakis Gouzonis

I think people are still missing the point. Sure you can make an app for your band or album, much like you can make a t-shirt or stickers, but to approach an app like this is costly, generic, and probably a wasted effort.

However, if you approach it as a product with a separate function that has NOTHING TO DO with your music, and then use your music as the soundtrack of the app to enhance the experience.

You have to put your ego aside and think about your music the way most people think about your music... something that makes other activities a little less boring.

September 1 | Unregistered CommenterCameron Mizell

Building an application is really important but building or getting these is not too expensive. We need to be wise and get some quality but not very expensive application.

Learn how to create apps from here:
http://r.evie.ws/view-review/unbeatable-app-development

September 5 | Unregistered CommenterPaul

Just an update - the app I started building when I wrote this article was released last week. WinterSpark - it's like a modern yule log - it shows a great fireplace video and plays my Christmas album in the background. Controls fly in and out with a tap and include historical info about the songs.

More info here:

WinterSpark by David J. Hahn and K629 Design

October 8 | Unregistered CommenterDavid J. Hahn

Thanks for the post. Here’s a tool the lets you create your apps in minutes, without coding. Just Point-and-Click http://www.caspio.com/online-database

February 1 | Unregistered CommenterScott Levy

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