Why app developers should hope for something better than a Hollywood ending

Shane Schick

It may not be the kind of line that drives people to the box-office, but it was certainly an eye-catching headline. "The app economy is now 'bigger than Hollywood,'" The Atlantic declared recently, with little sense of how developers, or anyone else, should react. What were we all supposed to do, clap?

Citing sales figures released by Apple and incorporating some analysis from market researcher Horace Dediu, the Atlantic story tried to quantify the overall revenues brought in through various forms of mobile monetization and offer a comparison with an older segment of the entertainment industry. There were, of course, some provisos:

Now, for "App economy" revenue worldwide to approach Hollywood revenue worldwide, those ads and services would have to bring in a lot of money. Though 2014 data isn't yet available, box offices worldwide have brought in twice as much as they have in North America since 2010. In other words, the ads, services, and Android equivalents that Dediu mentions would have to bring in more than $20 billion.

On the other hand, the Atlantic story concluded, if you take into account all the various jobs the app economy has created--from indie developers to the heads of major publishers--there's probably some truth to Dediu's comment. What this really means is another matter. If you were really to compare the app economy with the movie and TV sector, I would see a lot of other parallels, and many of them aren't good: 

The barrier to entry increases: Sure, anyone can make a mobile app, the same way anyone can pick up a camera and call themselves a movie director. But in Hollywood today financing is tougher than ever to come by, which means franchises and A-list stars seem to be essential ingredients to getting a green light. Similarly, we are starting to see a handful of major apps--from Monument Valley and Candy Crush to Facebook and Uber--dominating in downloads and engagement over most others in the app stores. 

Gotta have IP: There's a reason you're seeing so many movies coming out based on comic books, novels and even toys. They have a built-in audience, which means movie studios feel more comfortable about the financial risks of a film based on intellectual property (IP) than those that are based on more original stories. With the success of apps from Kim Kardashian and others, I worry the same is becoming true of many mobile games. 

One screen is never enough: Movies may still often start in the theatre, but they get a much longer life span through streaming on mobile devices, TV syndication and, yes, the occasional DVD release. This is something developers should take to heart as they weigh whether or not to create cross-platform apps or mobile games that only work across a smartphone. Diversity is strength. 

The one good thing I see in common with the app economy and Hollywood is the notion of a sleeper hit. In other words, no matter how homogenized the content and process seems to become, there is always room for amazing anomalies. For every Avengers sequel there is a Juno. For every new Angry Birds there is the occasional Flappy Bird. Only if that ever changes will it be time for a developer to roll the end credits.--Shane