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TV Widgets, Gadgets, Slices, Downloadable applications are all very hot topics in 2009 and so we all scrabble to demonstrate support for these extensible application platforms. And by extensible we mean largely being able to connect to other information sources and display them in a neat little persistent package that doesn’t interfere too much with the primary television function of actually watching television.

For those that love to tinker and play and customize their experience to somehow make it their own, it’s a ‘god send’ and a form of entertainment in its own right. However, it’s very much on the periphery of entertainment and therefore will be extremely price elastic. For example, I am quite willing to pay 59p for an iPhone application which will give me a limited amount of disposable fun, but definitely not £19.99. These kinds of applications include weather, stock tickers, games, mobile EPGs and more.

But is it just me? Would you pay for a stock ticker or traffic reports, does weather mean so much on your TV that you are willing to make a payment for it?

Possibly, but possibly not. We know from Apple’s experience and their initially very impressive statistics of over 1bn downloads to 30m+ iPhone’s/iPod Touch’s that an audience exists. However the ratio of free to paid apps is at 30:1 and the ARPU is around $1 which isn’t a significant contribution to any operator’s balance sheet.

However, learning lessons from some established web monetization models the answer may lie in one of the following not at all exhaustive list:

Advertising/Sponsorship: This is likely to be all over the place, unless it is a highly regulated platform like the nature of the currently proposed BBC Canvas project.

TCommerce: Highly likely, eBay TV widgets are very common and online payment services such as PayPal are a small price to pay for not having to become a merchant acquirer yourself.

Branded Content: Very likely in the TV Application world, a big media owner is likely to pay for the development of applications that exist purely in the context of their brand.

Acquisition: establish the application and then sell it and all the registered users to the highest bidder – a bit of a one-shot model.

Sell out your audience: the collection of consumption data is very valuable and where local legislation allows this could be sold to marketers for lead generation purposes.

Interactive Marketing: Application developers may well sell space actually within their existing applications to brands. This is proving popular in video games now.

For the moment applications on demand are a great way of reducing churn and making a platform desirable to new customers but it does seem to take a massive investment for limited returns if micro-payments are the only model. The chance to make real money will probably come from a variety of business models but also critically understanding the customer properly and somehow harnessing that understanding to give them exactly what they want just like personalized TV.

But saying all that, this visual representation of the Apple App store is still irritatingly cool though:

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