App cost doesn’t matter

What does it cost to consume news on your iPhone?
Does the cost of a news app really matter? … counter intuitively, the answer is: not really.

What does matter, from a cost of ownership standpoint, is your app’s data consumption, and its publisher coverage.

If you are using 3 news publisher apps twice daily, you are spending about $8 per month, just on the data for these apps…
How can you save? Read on…

Data set

Let’s focus on the top 10 paid and free news apps (source: AppAnnie):

  1. Publishers: BBC, CNN, Economist, Fox News, MSNBC, New York Post, NY Times, USA Today
  2. Aggregators: Drudge, inkWire, Pulse, Reeder, Yahoo

App costs

Most news apps in this data set are free, paid app prices range from $1.99 to $4.99.

Averaging it out, we get $0.25 per publisher app (note: excluding content subscription costs) and $1.99 per aggregator app.

So as to compare apples to apples with the monthly data plan costs, let’s amortize these app costs over a period of 18 months (estimated app/phone life), which gives the following table:

App Cost Monthly amortized cost
$0.99 $0.06
$1.99 $0.11
$2.99 $0.17
$3.99 $0.22
$4.99 $0.28

Data/bandwidth consumption

To make a comparison possible between the different apps, I tested all apps as follows:

  • opened the app with a 3G connection
  • let it sync fully
  • opened 3 sections
  • scrolled through each entire section’s content listing
  • read 2 articles per section

Based on this use case, I came up with an average data bandwidth consumed per use of 2.1MB, for both publisher and aggregator apps (see complete data set).
(note: Pulse stood out in a big way in the tests… their data consumption is about 10 times the average of the other apps… and most apps in the test support offline mode, so support for that feature cannot explain the overage… Pulse was not included in the average figures).

I am assuming 2 uses per day for 30 days, which seems realistic.
This gives an average total monthly data consumption of ~126MB/app

The cost of Data

I considered all data plans available for the iPhone, and assumed a 4GB effective available bandwidth each for unlimited plans (Verizon) and for hotspot services.

Provider Data Plan Name Effective Bandwidth (MB) Monthly Cost Monthly Cost / MB
Average $0.0214
AT&T 200 MB 200 $15.00 $0.0750
AT&T 2 GB 2,000 $25.00 $0.0125
AT&T 4GB + Hotspot 8,000 $45.00 $0.0056
Verizon Unlimited 4,000 $29.99 $0.0075
Verizon Unlimited + Hotspot 8,000 $49.99 $0.0062

This brings the average news app’s data cost to $2.69/month
($0.0214 average x 126 MB).

Publisher vs Aggregator

Given the fact that an aggregator app gives you access to multiple news sources (typically in excess of 50),. one could argue that you are actually saving when using such app, ie coz you do not need to open multiple publisher apps to access similar content.

According to Pew, 51% of mobile news consumers use 6 or more news sources on a monthly basis…

However, opening 6 news apps sequentially twice a day doesn’t sound like a plausible scenario…
For this discussion’s sake, I will posit that an aggregator app would be the cost equivalent of 3 publisher apps (feedback on that assumption most welcome).

Conclusions: News App Total Cost of Ownership

  • App cost, when amortized over 18 months, makes up for $0.11/month on average for aggregator apps, and is not significant (even at $4.99, the cost of the app accounts for less than 10% of the total cost of ownership)
  • Data costs amount to about $2.73 /aggregator app/month, or $7.94 /month for 3 publishger apps. It makes up for the majority (90%+) of your news consumption costs. As a result you should pick apps that use bandwidth efficiently, eg use progressive content fetching and compression
  • Using aggregator apps is the most effective way to save, potentially reducing your total cost of ownership by 64 % (from 3 publisher apps to one aggregator app), taking it from $7.98/month/3 publisher apps to $2.84/month/1 aggregator app.
The data used for this post may be downloaded here: news-app-tco.xlsx
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6 thoughts on “App cost doesn’t matter

  1. Pingback: Is it time to start factoring data into cost of app ownership? — Mobile Technology News

  2. Pingback: Is it time to start factoring data into cost of app ownership? | TechDiem.com

  3. Pingback: Choosing a news app for your iPhone | inkWire

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