The US has the most developed traditional media industry in the world. The US not only possesses world-class reporting principles and copyright protections, but US television, broadcast, newspaper and magazine news media were at one time the industry standard to which news media around the world aspired. But as the internet age quickly approaches, the US news industry is facing existential challenges.
Nowadays, news aggregation apps like Flipboard and News Republic have become very popular with users worldwide due to their improved user experiences and more precise content recommendation algorithms. They are also altering the reading habits of US users. But, due to differences in the usage habits of the US readers, the US news media is on a different development track than China.
How does the level of competition in the US mobile news market compare to other countries? What is the market landscape for different types of news apps in the US market? Which emerging news clients are disrupting the existing competitive structure? In this report, Cheetah Global Labs has leveraged appinsight, Cheetah Mobile’ s data analysis product, the huge amount of data gained from its own applications, and data from third-party market research organizations in order to to analyze the US mobile news market, gain insight into the US news app ecosystem, and seek out opportunities and areas for growth in an already mature market.
Explanation of data:
1.Unless otherwise marked, all data was gathered from Cheetah Mobile’ s 3.1 billion installations and 623 million monthly active users worldwide;
2. Data was collected from the normal use of Cheetah Mobile’ s products, adherent to all relevant laws and regulations;
3. Appinsight data is limited to the scope of Cheetah Mobile’ s products and user distribution; only applicable to the Android platform
1.News aggregation apps are the backbone of the current news app market
2. Personalized recommendation news Apps are popularin China and India
3. US mobile news market competition is relatively weak
4. US news apps still have room to grow in the appmarket
5.Top 20 US news apps and their classifications
6. Traditional media have higher app user stickiness
7. Copyright infringement could become the biggest challenge for news aggregation apps
8. Leading news app Flipboard relies heavily on pre-installations
9. Personalized recommendation technology is driving the transformation of news aggregation apps
10.News Republic: The NewStar of the US News App Market
Ⅰ.Global News App Market Overview
1、 News aggregation apps are the backbone of the current news app market
By observing the news app markets of the US, China, India, Germany, France and England, Cheetah Global Labs has discovered that the top apps in every country in terms of active penetration rate are aggregation-style apps. News aggregation apps occupy five of the top 10 spots on average in all seven countries.
（Note：“News Master” is known as“TopBuzz ”now, and it is classified into MEDIA_AND_VIDEO）
The data shows that news aggregation apps have become a mainstream type of news and information app. Users are constantly seeking more and more content, and the amount of information they can get from a single media source is not enough to satisfy their daily reading needs. Aggregation apps are better suited for satisfying the reading needs of next-generation users.
2. Personalized recommendation news Apps are popular in China and India
Among news aggregation apps, a new category has emerged: personalized recommendation news apps. This type of app can identify users’ reading preferences and provide them with “personalized news” based on their past click history and reading habits.
This type of news app arose out of a transformation in the news distribution model. Previously, people allowed the media to filter information for them. The media would decide what kind of content people would see. In other words, the power was in the hands of the media. Nowadays, there is an unprecedented amount of information available. Users are no longer able to simply rely on the media to filter information. They have taken back the power they once gave to the media.
Two new models have emerged for the distribution of news content. The first relies on social relationships. That is, the ability for every person to recommend content they like to their friends. Everyone has now assumed the role of editor, while in turn consuming content recommended by others. The second model relies on algorithms to identify user preferences and recommend content. Both types of recommendation models can greatly increase the effectiveness of information distribution.
Facebook, Twitter, WeChat and Weibo have all adopted the social relationship model as users distribute information amongst their social circles.
Algorithm-based news recommendation apps have already become mainstream in India and China. Jinri Toutiao, Yidian Zixun and Tiantian Kuaibao, the first, third and fourth ranked news apps in China, respectively, and Dailyhunt, the top-ranked news app in India all fall into this category. The second-ranked news app in Japan, SmartNews, claims to take the algorithm-based model even further. SmartNews does not require users to log in via their Twitter or Facebook accounts. In this way, it can prevent the formation of “selection bubbles” that might cause users to receive an overly narrow selection of “personalized” news. The machine learning-based recommendation algorithm utilized by SmartNews not only pays attention to what kind of content you open, but also how you pause during reading, what kinds of content the people who also read what you read like to read, and where they pause during reading. From this huge pool of data collected from a vast number of articles, SmartNews is able to hone in on your interests. These algorithms can be fine-tuned even further in accordance with user settings and parameter adjustments.
It is clear that this type of algorithm-based news distribution system is becoming more and more welcomed by users
Ⅱ.US News App Market Maturity and Competition
1. US mobile news market competition is relatively weak
In the above graph, the vertical columns represent the number of apps that have a penetration rate above 5% in each country. A higher number indicates a greater number companies with market strength. We can see in the graph that both India and China have six such apps, but there are only two such apps in the US.
The line graph indicates the market penetration rate of the top app in each country. A lower figure indicates a higher risk of the top app being challenged. According to the graph, the top app in India only has a 25% penetration rate, but the top app in the US exceeds 50%.
In economics, there are roughly three types of markets: a perfectly competitive market, a monopolistically competitive market and a monopoly. Perfect competition refers to a market structure in which there are numerous competitors and each competitor has a relatively small market share. A monopoly is a market structure in which there is only one supplier and no competitors. Monopolistic competition falls somewhere between perfect competition and a monopoly. From an economic perspective, the Indian market is somewhere between a perfectly competitive market and a monopolistically competitive market, while the the US market is somewhere between a monopolistically competitive market and a monopoly.
The more monopolistic a market, the more difficult it is for other apps to challenge the market leader. From this perspective, it is more difficult for new players to gain a foot hold in the US market.
2. US news apps still have room to grow in the app market
A higher news app market ratio means a higher percentage of users in a particular country use news apps. Based on this indicator, Japan is the most mature newsclient market. Conversely, the news app market share in the US is even lower than China, which means there exists ample room for growth in the future.
To increase the market share of a particular type of app requires the continuous emergence of new players to energize the market. As the country with the world’s most mature mobile internet market, the US will naturally become the most hotly contested battle ground for news app developers. In the following discussion, we will analyze the Top 20 news app rankings from the US in an attempt to identify “dark horses” and apps with untapped potential.
Ⅲ.Overview of US News App Market
1. Top 20 US news apps and their classifications
The top 20 news & magazine apps in the US market are highly reflective of market maturity. The 20 apps above can be broken down into four types:
1. News aggregation apps
Apps of this category such as Flipboard and News Republic account for more than half of all market share. News aggregation apps remain one of the primary pillars of the current news app sector.
2. Media subscription service apps
Apps of this category, such as Google Play Newsstand, allow app users to subscribe to multiple newspapers and magazines. When they want to read a particular publication, they can click on the newspaper or magazine and be automatically linked to its mobile site. This provides greater traffic volume and a revenue model for traditional media.
3. Comprehensive news portal apps
This type of app is represented by services such as Yahoo News, AOL and MSN, which were once called the three major portals. The gains these companies made during the PC era have served as a good foundation upon which to build their user bases and reputations in the mobile sector.
4. Traditional media apps
The above table shows that during the first half of 2016, news aggregation apps experienced significant growth in the US news app market; news portal apps remained basically stable; while subscription and traditional media apps both suffered significant declines. These phenomena signify that users’ reading habits are trending more and more towards news aggregation apps and this trend is showing no sign of slowing down.
Ⅳ.US News App Market Characteristics
1. Traditional media have higher app user stickiness
In the US news app rankings, a comparison of the aggregation apps and the traditional media apps shows that traditional media apps are opened an average of 3.34 times per week. Although aggregation apps have a higher active penetration rate overall, they are opened an average of 2.93 times per week, significantly lower than traditional media apps.
Of those apps listed in the above chart, Fox News has the highest average weekly openings of all apps in the Top 20 rankings. Fox News users can subscribe to content channels and receive the latest information via 24/7 news broadcasts featuring breaking news in real time.
Fox News App Screenshots
Although Fox News is a traditional media app, it features relatively advanced technology. The app facilitates multitasking by allowing users to browse headline news while simultaneously watching the live Fox News television broadcast on the same page.
Fox News is an established media outlet and still retains a loyal user base. It has leveraged its long-established reputation and influence to compete with news aggregation apps and continues to maintain high user stickiness.
2. Copyright infringement could become thebiggest challenge for news aggregation apps
Although aggregation app technology far surpasses traditional mediaapps in terms of the overall reading experience and targeted recommendations,the Achilles heel of aggregation apps is copyright infringement.
The US has the world’s most comprehensive and developed copyright system. This means that news aggregation apps in the US have to be very careful about where they get their content. US copyright protection laws have already been expanded to cover all forms of intellectual property, including news content. In the US, aggregation platforms are required to sign copyrights agreements in order to use another person or organization’s content. For example, when Apple released its “News” mobile aggregation app, the company emphasized its content partnerships with other media.
Media partnerships displayed at Apple News press conference
In 2013, Germany revised its copyright laws to require Google to pay publishers to use their content, but Google retained the right to use“snippets” of their content without compensation. Facing this “Google Tax”,the company decided to change its news collection model in Germany. Now,publishers that want Google to show their content must actively notify Google,otherwise Google will not push content from publishers’ websites to users.
Spain’s copyright law, which was passed in 2014, is even more stringent. Google must pay publishers a fee for any content that appears on Google News, even if it is just a headline. As a result, Google completely shut down its Google News service in Spain in late 2014.
From these examples we can see that as copyright laws in countries become increasingly stringent, copyright infringement has become the most significant issue affecting the development of news aggregation apps, and will be a critical area of competition going forward.
3. Leading news app Flipboard relies heavily on pre-installations
News aggregation apps enjoy a dominant position in the US market.However, if we look more closely, it is apparent that the leading news aggregation app in the US, Flipboard, is facing a growth bottleneck.
A closer look at Flipboard reveals that its success in the US marketis due in large part to the success of its strategic pre-installation agreement with Samsung. Two thirds of Flipboard’s active penetration numbers can be attributed to this pre-installed version. Looking at data from the past 10 weeks shows that Flipboard’s reliance on pre-installation has risen as Samsung’s sales in the US smartphone market have continued to grow. Spurred by Samsung sales, Flipboard has achieved continuous growth. However, it is worth noting that in the voluntary download market, Flipboard’s active market penetration rate has begun to drop.
4. Personalized recommendation technology is driving the transformation of news aggregation apps
If Flipboard has merely encountered a growth bottleneck, then GooglePlay Newsstand has met with an even more serious problem. Not only does GooglePlay Newsstand lack any advantage at all when compared to Flipboard, but it is even more helpless when facing off against the on slaught of personalized news recommendation apps.
The above graph shows that Google Play Newsstand has declined significantly in 2016. Google Play Newsstand is a news aggregation app that allows users to store content from magazines to which they subscribe in cacheform, but they must manually download and update the cache. Although its curated content streams are quite comprehensive, users must navigate to the source page of the information in order to read it, and many pages have not been optimized for mobile use, so the reading experience is relatively poor.
Google Play Newsstand
The difficulties faced by Flipboard and Google Play Newsstand are closely tied to the rapid development of competing products in the industry.Personalized recommendation news apps like News Republic are eating into Flipboard’s market share in the voluntary download market.
According to appinsight’s install penetration rate figures from July, three apps with personalized recommendation technology—News Republic,News Master and News Break—have all entered the Top 5 and lead the US market interms of new installs.
News Republic surpassed both Flipboard and Google Play Newsstand,and claimed the number one spot in new installs with 23.86% install penetration. In contrast, although Flipboard has maintained positive growth, ithas clearly entered a growth bottleneck period. Facing off against industry competitors who are rapidly improving, Flipboard has yet to develop a suitable response and continues to rely on its pre-installation strategy. Google Play Newsstand ranked 25th in new installs, with an install penetration rate of 0.58%.
Ⅴ.News Republic: The New Star of the US News App Market
1. Huge growth, 408% in nine months
Since May 2016, News Republic has maintained steady growth momentum.On May 16, 2016, News Republic’s WAUs only accounted for 0.13% of the US Android market, but as of July 10, News Republic’s WAUs had risen to 0.66%, an increase of 408%.
2. The US has become News Republic’s number one target market
The above market distribution table shows that the US is News Republic’s second largest market. In terms of overall user numbers, the US is News Republic’s number one future growth market.
3. News Republic has a large number of copyright agreements with publishers
A small selection of News Republic's 2000 content providers worldwide:
News Republic has already expanded its platform to include more than 2000 media outlets such as CNN, the Associated Press, Bloomberg and The Huffington Post. Through copyright agreements, News Republic connects directly with their servers, providing News Republic users with access to more than 50,000 news articles each day.
News Republic utilizes its own language analysis system to analyze each article’s meaning, verify its originality, and categorize it. The secategories comprise more than one million topics and produce headline news in the categories chosen by users, providing them with a real-time reading experience.
After rising quickly over the last two years, algorithm-based personalized recommendation news apps have come to dominate China’s news app market. This represents a major event in China’s internet industry. Chinese readers tend to prefer real-time, fragmented news. This has proven to be an enormous opportunity for mobile news aggregation app companies. At the same time, this trend has also been spreading globally. However, due to differences in user habits, it seems to have caught on somewhat later in the US than China. According to statistics published by the Pew Research Center in May 2015, although mobile traffic to most websites in the US has already surpassed desktop traffic, desktop users still spend more time on websites per visit. But through big data analysis, we were delighted to discover that this phenomenon has been changing in 2016, and algorithm-based personalized news recommendation apps are become more accepted by US users. The world’s two largest superpowers, the US and China, are once again in sync, but this time, the US is keeping up with China’s pace.