Quibi, the streaming video entertainment app helmed by Jeffrey Katzenberg and Meg Whitman, will likely serve as a case study for some time in how not to launch a mobile product. Despite having raised $1.8BN in funding, as well as securing $150MM in advertising commitments ahead of launch (some of which are now being renegotiated), Quibi’s debut was muted: the app only saw around 1.7MM installs over the course of its launch week, with Jeffrey Katzenberg claiming that the app had roughly 1.3MM DAU in early May.
The mobile app economy, once considered something of a commercial Wild West where good ideas coupled with capable execution could be turned into big businesses by scrappy entrepreneurs, is a mature and hyper-competitive marketplace. User base growth for successful mobile apps is almost exclusively driven by a flywheel of performance marketing and deep monetization expertise: resources matter, and if Quibi, a company with abundant resources to invest into growth, couldn’t manage to launch its app into a sustainable Top 100 Grossing rank, it’s only natural to question how any company could.
And indeed, it is rare that an app is able to launch into a Top 100 Grossing position — I calculated the average age of apps that spent any time within the Top 100 Grossing position over the past 90 days as 1,452 days for iOS and 1,648 days for Android. Most Top Grossing apps are years old: incumbents dominate the Top Grossing charts and have an advantage with respect to the flywheel described above.
Yet new apps do launch into the Top Grossing charts. In the past 90 days, eight apps have launched that have spent any time in a Top 100 Grossing ranking in the US across both iOS and Android (only the ‘Overall’ Grossing chart is used here, not category charts like Games or Health and Fitness):
Some interesting things to note about these apps:
- These eight apps are really just five: most of the apps that launch into a Top 100 Grossing position on one platform also reach a Top 100 Grossing position on the other;
- G-TV is a Chinese-language social media app that was released on April 15th and rocketed up the US Top Grossing charts immediately after release and almost as quickly disappeared. Saraca Media Group, the company that publishes G-TV, is owned by a Chinese billionaire;
- Aside from G-TV, all of the Top 100 Grossing launches are games;
- Of the games that launched to Top 100 Grossing positions, Glu publishes two: Disney’s Sorcerer’s Arena and MLB Tap Sports Baseball;
- All of the developers behind the games that launched into Top 100 Grossing positions are public companies, with Netmarble headquartered in South Korea, SQUARE ENIX headquartered in Japan, and Glu headquartered in the United States. All of these companies operate substantial mobile portfolios — none of these apps is a first foray into mobile for these companies.
The fact that just four companies were able to launch into Top 100 Grossing positions over the past 90 days is striking: the upper echelon of the app economy is incredibly difficult to penetrate.
Of course, setting a standard of Top 100 Grossing is arbitrary: the market is so large that most developers would be happy with an app that reaches a Top 500 Grossing position (in the US alone, a Top 500 Grossing app might generate between $10-30k per day). But a Top 100 Grossing position is a commonly held aspiration for mobile app developers: it’s a significant and widely respected milestone.
So how does a company launch an app into a Top 100 Grossing position? The contrast between the companies that have most recently done it and companies, like Quibi, that tried and failed, seems to highlight a need for deep mobile expertise: not just in advertising but in monetization, audience development, pricing, product marketing, etc.
As of this writing, Glu’s market cap is $1.3BN — Quibi raised $1.8BN. Money is a necessary but insufficient pre-requisite for success on mobile: the companies that are consistently able to launch titles into Top 100 Grossing rankings have more than just money, they have deep domain expertise around mobile publishing and products that meet a large and monetizable use case. This sort of internalized expertise around the specifics of mobile publishing is important; the differences between mobile and all other consumer technology form factors are meaningful and substantive.