This report focuses on sizing and qualifying the EU app ecosystem, with an eye toward revenue generation, jobs supported, and the bottlenecks still facing EU app developers. Key findings from our analysis, which is based in part on two surveys of developers targeting EU markets, include the following:

• EU developers took in $23.7 billion (€17.5 billion) in revenue in 2013, and we forecast that figure will increase to $85.3 billion (€63 billion) in five years. But you might be surprised where a lot of that revenue comes from. In addition to $8.1 billion (€6.0 billion) in app sales, in-app spending for virtual goods, and advertising, EU developers recognized $15.6 billion (€11.5 billion) in 2013 from contract labor. And much of the developer-for-hire business is for companies that aren’t really in the app business per se but use apps to support and market their mainstream offerings like financial services, retailing, and packaged goods.
• Fewer than half of the independent developers we surveyed said they were offering services for hire, so that’s a potentially untapped market for startups. Similarly, half of the enterprises that did their own in-house development also used third-party developers. And in-house developers are by and large more satisfied in achieving their commercial objectives than independents, many of whom are frustrated by low prices, free products, or barely emerging ad revenues.
• The EU app-developer workforce will grow from 1 million in 2013 to 2.8 million in 2018. Additional support and marketing staff result in total app economy jobs of 1.8 million in 2013, growing to 4.8 million in 2018.
• EU developers face more business than technical bottlenecks. Increasing users’ willingness to pay for apps is problematic, but better discovery vehicles could help relieve high customer-acquisition costs. Similarly we see an opportunity for an EU marketplace where companies needing app development could identify, negotiate with, and hire contract developers.

Thumbnail image courtesy of Oleksiy Mark/Thinkstock.

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The key trends in personalization — that is, the disruption vectors that smart companies will drive and ride to success — over the next 12 to 24 months are led by a collection of technologies that we call post-programming curation. These technologies use the best of behavioral tracking, collaborative filtering, audience targeting, and dynamic content presentation. Would-be personalization leaders will have to accommodate what we call the tyranny of choice and avoid too much temptation from the recommendation gold rush. Impatient audiences will be a disruption, but it will take tech vendors some time to properly exploit users’ social and interest graphs.

Source: GigaOM Research, April 2013

In this GigaOM Research Sector RoadMap^TM we look at a variety of personalization-technology vendors with different specialties. Key highlights include:

• A newcomer, Gravity, and Demandbase, a company that specializes in B2B marketing, appear well positioned to take advantage of personalization disruption vectors.
• Another new player, TruCentric, is applying customer valuation and merchandising techniques to content personalization in an intriguing fashion.
• More-established recommendation engine and content promotion networks like Rovi, Outbrain, and Taboola and ecommerce specialist BloomReach are also on the twenty-first-century personalization RoadMap.

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The social networking world will continue to be defined by two tiers for the foreseeable future. This report, based on data from GigaOM Research’s 2012 consumer survey, examines the social media audience and the differences and similarities between the two tiers.

Key highlights from this report include:

• Specialist networks cater to diverse consumer segments and user needs, but Facebook’s sheer ubiquity means 94 percent of all social networkers use it.
• LinkedIn and Twitter are by far the most popular second-tier sites used by multiple networkers,with 46 percent and 43 percent penetration, respectively. By contrast, the other generalist networks, such as Google+ and Myspace, are used by less than 20 percent of multiple networkers.
• Multiple networkers are sophisticated and highly engaged consumers who use social networks for a broad range of activities, including socializing, viewing and posting media, reading, and dating.
• Single networkers are older and less engaged, and they use social networking for a narrower set of purposes.
• If any generalist network is going to gain mass-market traction it will be at the expense ofFacebook, not in addition to it. Single-network users are not going to become multiple networkers anytime soon.

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New social tools and sites are facilitating a democratization of discovery, where one-to- many recommendations are no longer the exclusive domain of professional media and traditional tastemakers.

But this discovery democracy comes at a cost: Consumers now have at their disposal more sources of entertainment discovery and recommendation tools across more platforms and devices than ever before. Because of that, they find themselves bombarded with a bewildering overabundance of recommendations and have no effective means of filtering the good from the bad, the useful from the useless, the relevant from the irrelevant. Little wonder, then, that mainstream media fans continue to largely shun these new digital discovery tools in favor of traditional alternatives.

This report examines the new world of discovery and recommendations. Using data from a recent GigaOM Pro survey of 1,165 U.S. consumers, we examine the different types of media fans, how they fit into the current media industry, and how their influence is creating opportunities and challenges for traditional media marketers.

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This research note discusses that shift in light of the current music industry, where the iTunes digital download leads the market but will not necessarily lead in the future. Rather, services like Spotify, Facebook, Topspin and others are taking us into a new era of music, one that’s dynamic, interactive, social and curated.

In the analog era, media consumption was characterized by the ownership of linearly programmed physical formats we leaned back to consume. In the digital age we lean forward and interact with content, and we value access to it as much as we do ownership (see Figure 1). Crucially though, access to stock is on an upward trajectory, while that of ownership is creeping downward.

Figure 1: Music products still catching up with dramatic changes in consumer behavior

The root cause of this situation is scarcity or rather the lack of it. Scarcity is what enabled the music industry to create a monopoly on the supply of music. The industry decided when and where people bought music and how much they paid. The only alternatives were poor-quality cassette copies or the radio. Value was determined by the price tag.

CD ripping and Napster together changed that in an instant, throwing scarcity out the window once and for all. Now music fans expect to listen to music they have never owned at the click of a mouse or the touch of a fingertip. P2P file sharing and YouTube have taught consumers that all of the world’s music can be listened to without spending a dime. Music fans have chosen for themselves what constitutes value, and more often than not monetary value is divorced from emotional value, a dynamic unthinkable in the analog age. More than a decade’s worth of user behavior cannot be undone, and these are the expectations future music services must meet.

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