monthly or annual fees for app bundles. Borrowing from the social gaming playbook, a loss in margin due to the model shift could be offset by virtual goods revenues (the relevance of which is discussed below).
A logical solution to No. 2 is for the free thin downloadable client to serve as the key that unlocks a trusted, safe ecosystem (under the Callaway brand name for example), where most rich content is served from the cloud. Doing so would also lend insight on kids’ app usage patterns. Imagine a dashboard where parents can observe how children are interacting with an app, where they are having the most success, and where they are getting stuck and need practice. Additional functionality might include parental controls and the ability to approve new stories on a “Wish List” before a child downloads and/or purchases them. This last feature addresses part of the problem in No. 3.
The other answer to No. 3 (and a way to aid discovery in general) is to stimulate a network effect. Embedding viral widgets within an app enables kids to share with friends, so they can read/watch content and play games with each other. After all, children will spend more time on a memory exercise if they can compete virtually. This also opens the door for virtual goods opportunities, as mentioned above. Lastly, facilitating these peer connections promotes social engagement, which has been fundamental to storytelling over the years, yet has been a shortcoming of rich media apps thus far.
In summary, while elegant design and user experience are prerequisites for market traction, entrepreneurs who 1) stay true to the essence of storytelling and 2) employ proven digital distribution and business models addressing well understood shortcomings of the mobile platform, have the greatest chance for success.
