The global apps debate got another dimension as Google proposed progressive web apps as the next big thing in 2015.
However, most people building apps today still prefer native apps, for several reasons, mostly because it’s what people actually use.
Friction, friction friction
A big question in the app-building discussion, is about the app install friction. In other words how many clicks there are from finding the app in the app store – to becoming an active user.
Briux believes the friction is the same in both PWA’s and native apps:
What’s the difference of the friction generated by the app store, compared with downloading a web app to your home screen?
Zanardi believes progressive web apps is much more frictionless because the device itself promotes the use of PWA’s:
There is much less friction in installing a progressive web app because the device your using is actually wanting you to install it. Compared to going to the app store, installing an app that takes up tons of space, and needs an update every two weeks.
Sospedra turns to the metrics:
The numbers tell us a story when 86 percent of the media being consumed on mobile phones are through native apps and only 10 percent of the total time spent on smartphones are used in browsers. PWA’s are still the new kid on the block, so maybe in five years we can talk again?
In one of the last question rounds, the app defenders had to reveal their answer about app stores — good or evil?
Miro says that if you get rejected it’s an evil thing and continues:
Android is pretty easy, just push and you’re in. With iOS however, to wait for someone from the other side of the world to test your app, that’s a black box for developers and nobody likes black boxes.
Codeworks CEO Zanardi points to that the app store or Apple, is the biggest preventer for making PWA’s really big:
The biggest problem PWA’s have at the moment is that Apple’s Safari doesn’t support service workers and that kills a lot of the purpose of the app. Firefox and Chrome are embracing PWA’s. As long as Apple is making tons of money from the app store we’ll have a real challenge.
What does your startup need?
Former Wuaki CTO Miro says choice of app to build all boils down to what kind of business you’re building:
If you asked me four months ago, hybrid apps were not the way because we couldn’t build what the business needed in Wuaki. But today for what I’m building, we’re looking for speed, something that’s tested and reliable and we wanted access to Canvas or WebGL, so hybrid is the way for us today.
Sospedra agrees with Miro, saying that your business goals need to be clear before deciding what kind of app you’re building. He’s also adding that what kind of technology your team is comfortable with is important as well:
As progressive web apps might be the bet for the future, Zanardi wanted to end the discussion with a statement:
I completely agree with these guys that if you’re building an app today to work on iOS and Android I would go native. The main problem you would have with PWA’s is with the iOS. If you’re targeting mostly Android devices you might go for a PWA. As long as Apple is blocking the spreading of PWA’s we’ll have an issue we need to solve.
There was a lot of other interesting points in the full debate, so check out the video at the top!
The perception that Disney is only a producer of children’s content is long gone. The company has managed to multiply by 10 its market capitalization in 10 years and I believe it will do it again in the next 10 years based on 3 factors: content, the entry in new businesses and spillover effects on current businesses.
Disney has been making movies for almost a hundred years. They have been movies for all the family but targeted to kids, which are the ultimate decision-makers when going to the movies. This is an example of the classical content they were producing up until the last 10 years.
Despite having a powerful content library, Disney has amassed the most impressive collection of content in the world via acquisitions:
21st Century Fox: 71B
Lucasfilm (2012): 4B
Marvel (2009): 4B
Pixar (2006): 7B
Hulu (2009): ??. They acquired 30% and an additional 30% with the acquisition of Fox
With the recent acquisition of Fox, there are only big four other movie studios left in the market: Sony, Warner Bros, Universal, and Paramount.
Just to give perspective. This is the list of the top 3 grossing movies for the last 3 years. Spoiler, they are all from Disney:
2017: Star Wars The Last Jedi (rubbish if you ask me), Guardians of the Galaxy 2 (not great) and Beauty and the Beast.
2018: Black Panther, Avengers: Infinity War and Incredibles 2.
2019: Avengers: Endgame, Captain Marvel and Aladdin (Still not counting with Toy Story 4, Spiderman, The Lion King, Frozen 2 and Star Wars: The rise of Skywalker)
Having content as an asset in the movie industry is relevant because of the fact that over 90% of every year’s Top Box Office Hits are not original. Notice that the 9 hits mentioned above are not original content, including Captain Marvel which is a character well known despite debuting in theaters. Moviegoers are risk-averse and showing characters the public is familiar with is synonymous of success in a market where the production of a movie can cost hundreds of millions of dollars.
Another essential part of the content are the actors. They give credibility to a movie and top talent can’t wait to appear on a superhero movie. Just look at the roster of Avengers Endgame with cameos from the likes of Robert Redford, Rene Russo, Michelle Pfeiffer, Michael Douglas, Natalie Portman, William Hurt, Samuel L Jackson or Ken Jeong, the Asian character on The Hangover. All of this without accounting for the main characters. Where else can you see this?
One of the acquisitions mentioned is Hulu, a streaming platform in the US which also allows watching live content. I believe this is the future. Cable TV operators are doomed. The number of subscriber to Cable TV in the US has declined over the past years.
It’s clear the consumers are opting in to streaming on-demand platforms such as Netflix, HBO, Hulu, and Amazon Prime. That’s why Disney is launching Disney +.
This is a global trend. People across the world may not own a TV, but they have smartphones and internet connection. Netflix has launched a 3$ monthly cell-only subscription in India. Check this relentless growth of subscribers by Netflix.
Take a look at the last Shareholders report by Netflix, a public company that is burning billions every year -3,5B$ in 2019- and is expected to invest 15B$ in 2019 alone in new content. In my humble opinion, Netflix has by far the best streaming platform and the content is remarkably good, just look at the masterpiece Stranger Things season 3.
Netflix will be the main competitor of Disney, who will claw back its content from other platforms over the next years, reducing the earnings of licensing rights, but attracting customers to their platform. I believe there will be a time where platforms won’t share much content, but eventually, this will rise opportunities for multiplatform viewing apps and some years from now, platforms will reshare content once they settled a loyal customer base. Users will be subscribed to multiple platforms and they would still like to watch what’s best in every one of them. It’s not a winner take it all market.
My final bet is that there’s another big piece of content that is currently slipping away from streaming platforms, live sports. This is the last resort of traditional TV and cable TV operators who have been able to tell customers when and where to watch TV. This is no more, TV is dead.
Let’s get some perspective here. Disney is a corporation that currently (2019) has annual revenues of around 70B$ and a net income of around 13B$ (15–20%). Where do they make money from? This is a comparison YoY between the fiscal years ended on September 30th. of 2018 vs 2017. All areas grow except for merchandising. Figures in B$.
The main source of income is Media Network, which comes from ESPN, Disney Channel, ABC… Here’s the evolution of this revenue stream fro the last decade.
With the acquisition of Fox, this chart is going to experience a huge vertical shift.
PARKS AND RESORTS
Parks and resorts are the second biggest revenue stream of the Mickey Mouse company.
This is a chart with the number (in millions) of yearly by visitors by each park. Around 150 million people go to a venue managed by Disney somewhere on the planet. This can only be achieved by a great hospitality experience and the best content:
This is the revenue that comes from the distribution of movies and music.
The chart below displays the Box Office market share evolution. Disney has managed to multiply by 2,5 in ten years, and now with the inclusion of Fox, the market share could get just shy of 50%, which is ridiculous. This is a major spillover effect from the massive content acquisition.
DIRECT TO CONSUMER
This is where the new platform Disney + will come into play. Disney + is a SVOD (Subscription Video on Demand) as far as we know. Other alternatives are AVOD (Advertising Video on Demand) where the users access for free but get adds (Youtube) and TVOD (Transactional Video on Demand) which is what Google is doing among others.
So far they have had Hulu in this category, but with the introduction of Disney +, this will become of the main revenue streams for Disney. Eventually, the main one if you ask me. My guess is that in one year, Disney + can produce revenues of about 20B$ and grow from there. This is what Netflix is doing right now.
The advantage of Disney + is that they already have the content and they would only need to produce specific content for the platform such as The Mandalorian or the Marvel spinoff series with Black Widow and more. That would imply big operating profits since most content has already been amortized. The downside, however, will be the loss of the licensing revenue they get from streaming onto other platforms included in the Studio section. I’m betting this will be a money-printing machine.
Disney is a company that has endured through decades and over the last years has taken on a path of content acquisition and generation that pays off very well. This is why I am “hodling” on its stock.