October 5, 2010, Billboard Mobile Entertainment Live, Moscone West, San Francisco—in another morning keynote, Matt Murphy, a partner at Kleiner Perkins Caufield and Byers offered insights into directions of features and capabilities for smart phones and tablets. The investment field is changing as new super vertical markets emerge. These new markets include music and games and other applications for mobile devices.
Looking towards companies that have an Internet approach and ability to scale up. They are seeing lots of experimentation that extends from phones to smart phones and to tablets. He advises developers to establish a strategy that enables migration from canonical use case to a broader use case. Things that don't work generally are too complex.
Companies should focus on one thing that they do really well and they need to find 50 to a 100,000 users to become a mainstream application. Music applications, one of the largest categories, need to find ways to partner with the labels. At the same time, the labels need to become more open. The problems with the labels is a they want to approach the market from a situational perspective and just get more money. They don't share any motivations with their talent to balance income versus exposure.
Other apps can use the music apps as templates for the business models. For example, some games, like Nightclub City, work with streaming music. The market is forcing the music labels to respond to changes as static lines become interactive. Music will adapt.
In terms of target platforms, the iPhone is the best use of development money because the conversion rate is currently six or seven times greater than android. The best bet is to focus on the first platform and then grow out. Important considerations for new apps to develop traction and growth novelty, location-based services, check-in capabilities, and shopping.
You do have to be careful about check in fatigue. There is a need for a single user utility that captures user information content to minimize the need for constant check-in and updates. However, by connecting more information and content to the user and to that particular moment, you can create emotional moments around music. This higher level of interactivity allows bands to connect with their fans. Mobile devices encourage spontaneity.
Future applications and directions for these apps are all part of living in the future. We're still learning about how things work and how people interact. Tablets are very intriguing because their users spend many hours on them compared to minutes at a time for smart phones. Part of this is due to the easier navigation and other parts to increase functionality. This portends a possible move into enterprise-level functions, where there is more money, at the expense of the need for greater support. An enterprise targeted app is likely to be a lot lower risk than one for consumers. The biggest issue is crowding, or a large number of companies out there developing apps.
