Saturday 10 December 2016

Whatever about the headlines, the bottom line is what matters

Published 07/05/2015 | 02:30

Circa creates news for mobile devices.
Circa creates news for mobile devices.

Have you got a few million dollars and an interest in the evolution of mobile news? If the answer is yes, then you're in luck: Circa, the mobile-first news app is for sale.

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But maybe there are better ways to spend your cash than on a platform that was lauded as the future of news consumption when it launched in 2012? Sure, it has won plenty of praise, boasts some influential backers and was named as one of the best new apps of 2013 by both Apple and Google.

But here's the problem; it's three years old and it may already be out of date. Circa creates news for mobile devices. Its stories are short and sweet.

Each one is split into a series of cards, which readers can swipe through and each card focuses on a particular part of the story, background, maps, images or quotes.

This atomic approach has benefits for writers. Stories can be easily updated by adding new cards. And cards can be re-used, reshuffled and recycled. Circa also allows users to follow specific stories to receive updates any time there are developments.

Circa was founded by Ben Galligan and Ben Huh, the chief executive of Cheezburger Network, a man who built a fortune on felines and bad spelling. John Maloney, formerly of Tumblr, was hired last year as the company's president.

Circa's early-stage investors include the chief executive of Path, the founder of Wordpress, and some respectable venture capital firms, including Quotidian Ventures, Lerer Hippeau Ventures and Menlo Ventures. So there should be no shortage of digital smarts in Circa's brain trust.

But now, after an $8m funding round fell through, Circa is looking for someone to buy it.

The big problem is, while it has proven popular with the tech-types and the media, the masses don't seem to care. Circa hasn't announced any sort of user numbers, but the app has been outside the 1,500 most downloaded apps in Apple's app store since last November and the site is outside the top 25,000 websites in the US in terms of traffic. And size matters - even if you're bite-sized.

Circa isn't alone in struggling to grow a user base. It's notoriously difficult to get smartphone users to download new apps: two-thirds of smartphone users don't download any on a monthly basis.

Plus, news apps pale in popularity compared to games and social networking. In 2013, the Pew Research Center, a US-based media think tank, found that mobile users are more likely to get their news from mobile websites instead of apps.

And while all mobile news apps struggle with these issues, there are a host of newbies that are doing a better job of gaining an audience. More recent entrants into the app marketplace like Al Jazeera's AJ+, and Yahoo's News Digest, have more editorial personality and are more fun to use.

But Circa's most dangerous competitors aren't news apps at all. They're the social platforms and chat apps that are aggressively colonising mobile media consumption.

Social networks have realised that original content keeps people on their apps longer and they can develop apps better than most legacy media outlets.

So Facebook is trying to get media companies to start publishing articles on its platform first, and their websites second.

Snapchat has enlisted the likes of Sky Sports, 'National Geographic', Vice and 'Cosmopolitan' to create a handful of stories every day for its Discover channel. And let's not forget Twitter, which is one of the companies rumoured to be sniffing around Circa. Buying Circa would make Twitter more than a distribution channel.

It would give the micro-blogging service something of its own to distribute. And it's not just social networks that have pulled the rug out from under Circa.

Chat Apps like Line, WeChat and WhatsApp have been muscling in on the act of mediating content to mobile audiences.

Any media brands looking for a quick and easy way to target a mobile first audience, don't need to buy an app like Circa; they just need to set up a few channels and engage the millions of people there.

The scale Circa lacks, chat apps have in abundance. WeChat has around 500 million monthly active users. WhatsApp has around 800 million.

Circa is now paying the price for being first out of the traps in an immature mobile ad market. There is a huge discrepancy between traffic and revenue.

Sure, more people than ever are getting their news (and other content) on mobile devices. But that isn't translating into money for most players.

According to the Pew Research Center's State of the News Media 2015, just five companies (Facebook, Google, Twitter, Pandora and Apple) account for 64pc of the mobile advertising market for news.

There's no room for little guys. Maybe, then, selling up to one of the big boys isn't just the smartest move for Circa. Perhaps it's the only move left.

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