The Internet business paradigm is fast changing in light of a rapid shift in the Internet’s user environment.
As people use PCs less often to access the Internet and mobile devices more, they are also beginning to spend more time on particular apps rather than the web. The Internet business environment is therefore in transition.
According to the Korea Internet and Security Agency’s research report “2013 Internet usage status” on April 20, the PC-based Internet access rate went down from 82.1 percent in 2012 to 79.8 percent in 2013, while mobile usage grew from 58.3 percent to 91 percent, a whopping 30 percent rise in the same period.
While the PC once dominated the Internet, now mobile devices such as smartphones are key players. But especially with mobile devices, more time is spent with apps rather than the web.
According to a recent report published by mobile research company Flurry, even in 2013 users spent 80 percent of their mobile time on apps and 20 percent on the web. However, in the first quarter of this year, app usage time grew to 86 percent, while web usage time fell to 14 percent.
A Flurry associate stressed the importance of changing the Internet business environment from web to apps by saying, “While on the Internet, users predominantly use smartphones, but even smartphone users tend to prefer closed apps to open web surfing.”
To capitalize on the trend, Internet companies are also modifying their business strategies from web to app.
Facebook CEO Mark Zuckerberg, in emphasizing the business direction that application businesses should take on, was quoted as saying in a recent New York Times interview, “Apps that focus on one function such as messengers or news feeders are more popular in mobile.”
In fact, the app industry is touted as a market that can garner tremendous profits, according to some. One app developing associate said, “Once one dominates a platform like Google, Apple, Kakao, and Tencent, they can gain strong control over apps.” This is because unlike on the web, where users can freely roam around, a closed app can trap users so that they stay longer. He said, “Because of this, monetizing for mobile can be more viable than it is for web.”
The first phenomenon that accompanied the onset of app-based business environment is that more and more free apps are being offered. According to Flurry, free apps that accounted for 84 percent of the total in 2012 went up to 90 percent in 2013, meaning that the majority of the apps are free.
Even Microsoft, notorious for being averse to the idea of “free,” joined in. Microsoft’s flagship software suite Office offers free document viewing and editing on mobile devices. It costs tens to hundreds of thousands of won (US$30-400) to use the same functions in PC-based Office.
Deciding the app to be free or non-free turns out to be a make or break factor for a company’s growth. NCSOFT is tasting the bitter taste of failure by sticking to a paid mobile model for its popular game Lineage. The game, launched in 1998, is a signature “paid” case of PC-Internet business.
On the back of Lineage’s success, the company on March 26, rolled out “Lineage Mobile: Haste”, in link with its PC game Lineage. However, Lineage Haste has long been ousted from the Google Play top 100 game ranks.
In contrast, Netmarble, after struggling in the PC-Internet game market, succeeded in a comeback by offering it free in the mobile app market. Netmarble’s Monstergame and a few other titles made the top 10 on Google Play games. The game company took the lead in the mobile game market with sales of 500 billion won (US$482 million) in 2013, just one year after posting a dismal 210 billion won (US$202 million) in sales in 2012.