Mobile news: readers on the rise but where's the revenue?

All too often news outlets have pinned their hopes on a single, magical solution to the financial challenges posed by the internet. Paywalls, iPad apps, native advertising, micropayments, charging Google, suing Google – in the past few years, all have been hailed as the future of digital news.

Not long ago, the smartphone was anointed as the next financial saviour. Since people paid to have games and music on their handset, the argument went, they would gladly hand over cash for mobile news too.

But phones have yielded no more than a trickle of cash for news publishers. Paid mobile apps and websites are almost always included free with tablet apps or other subscription packages, and no one would dare to charge for mobile access to a website that was free on desktop browsers.

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In fact, the mobile web may be more of a threat than an opportunity, at least to advertising-supported sites. On smartphone screens, banner ads are either so big that readers won't put up with them or so small that advertisers won't buy them.

To add to publishers' woes, most mobile web traffic consists of a single page view. Readers drop in from Facebook or Twitter, see what they've come to see, and head straight back to their social network of choice. News sites are deprived of the second, third and fourth clicks that help drive up their pageview figures and advertising revenues.

Since so few mobile readers wrestle with navigation or links to related stories, many mobile news sites have now stripped away those elements in favour of a cleaner, simpler mobile page. The BBC, The Guardian and the New York Times are all good examples. Essentially, these publishers have accepted that one click per visit is all they can expect from their mobile readers.

That, combined with the reduced advertising yield per page and the movement of readers from desktop to mobile, means that publishers face losing another slice of their digital income – which was meagre enough to begin with. To maintain present revenues, their mobile websites will need a lot more readers.

The good news is that they might get them. Digital media analyst Frederic Filloux reported this week that the time people devote to reading news on their phones is growing at a prodigious rate: it's up 64 per cent year on year, compared with a rise of 28 per cent for social networking and nine per cent for gaming.

Filloux acknowledges that news still constitutes a tiny proportion of mobile web activity (as little as two per cent, according to eMarketer), but he predicts that "it will grow stronger as publishers deploy their best efforts to adjust contents and features to small screens and on-the-go usage".

In order to accomplish that, he says, mobile news will have to migrate from the open web into apps, which can make more effective use of smartphone features and processing power.

That may prove an attractive proposition to publishers, especially those with the resources to build and maintain a suite of apps. Newspaper companies in particular tend to like apps, which have more in common with the steady, semi-captive audience of print than the fragmented, itinerant readership found on the web.

What's less clear is whether news apps will prove attractive to readers, who increasingly find news through social media. By their nature, most apps are cut off from the rest of the web, making it difficult or impossible to share links to individual stories. Given the growing importance of social recommendation, cutting off that source of traffic would be foolish.

It sometimes seems that news apps are less popular in their own right than tolerated as the least worst option, and that their success depends on mobile websites actively pushing readers away. That theory is borne out by the experience of The Guardian, which lost almost a third of its iPhone app users when it introduced an attractive, responsive mobile site.

The Guardian would point out that its mobile traffic has since reached a record figure of 22.8 million monthly unique users. It’s an impressive number, but whether it’s big enough to compensate for lost revenue from the desktop site – let alone from print – remains to be seen.

Holden Frith tweets at twitter.com/holdenfrith