If media companies were automobiles, most of them should be racing as fast as possible toward the new world of networked mobile devices -- a technological opportunity that promises to utterly transform the industry over the next few years.
As the media companies enter this race, a pretty good place to embed an applications company would be under the hood of all those "cars."
That's precisely where Handmark, the Kansas City-based developer of mobile media apps, is positioned, inside eReaders for such industry leaders as The Wall Street Journal, AFP, Thomson Reuters, Forbes, the AP, and CBS.*
A few years back, the company spent millions of dollars developing Pocket Express, which is a free news and entertainment app available for any mobile phone. "Pocket Express was the beginning of all this for us," says Evan Conway, EVP of Marketing for Handmark. "We developed it into a proof point. It may have still been buggy three years ago, but today it is a very slick product."
Conway says that as the company saw the broad outlines of the emerging market for mobile apps, it perfected its technology into a "product extension for media companies" that today is called its Mobile Publishing Platform. "The end user sees a custom version but under the hood its a cookie cutter, a repeatable product that we can assemble in one week," he explains.
Few media companies have the core technological competence to build their own, nor does it make financial sense to do so, so increasingly they are turning to companies like Handmark, which is the leader in this space. "We can build it for them dramatically cheaper and faster than ever before," says Conway. "Not just the code, but the whole support structure, including help files, distribution systems and app stores.
"We almost backed into the business of building and managing app stores for our partners," he adds, but that has now become an important part of the company's offering. "We'll launch hundreds of applications for big brands this coming year and thousands over the next few years," Conway predicts.
"A smaller newspaper or trade magazine would only have to spend around $20,000 upfront to get their own app launched, and they can enter the market it under a week," he adds. "That upfront fee doesn't cover our costs of development, but our business model is based on making money from the new revenue streams that are created by going mobile."
Handmark earns revenue in three ways from its Mobile Publishing Platform:
- Upfront fee for creating the application.
- Advertising, including sponsorships. "For the Palm Pre, we created a stocks app that Bank of America liked. They sponsored all of the inventory in that app."
- Stores. "We are seeing good results from our 'Get More Apps' button, where we present five or six apps targeted to the user."
Maybe Conway is, as he says, "biased," but it will surprise no regular readers of this blog that I also think he's right. What newspapers, magazines, books, cell phones, and eReaders share is that they are all mobile devices. Networked together through thousands of interactive applications, they compose a new media landscape that has the potential to be much more profitable than the current, struggling model.
*CBS owns Bnet.
(Note: This article has been updated since publication in two places for clarity purposes. In the 7th paragraph, the words "applications" has been inserted in place of the original "stores." In the tenth paragraph, the words "Mobile Publishing Platform" have been added.)