SmartNews battles retaining users while Rivals Twitter/X Surge

Some of the most important channels for news traffic — Google Search, social platforms like Facebook — changed how they focus on and surface news links, and that’s had an overall hit on traffic and ad sales. And consumer tastes have changed, too, and it appears that the app is also struggling to attract and retain users. Given the decline in downloads, Apptopia said a figure of 10 million active users today would now be “a stretch.”Another firm, Sensor Tower, added more insight, noting that SmartNews had, on average, roughly 1.7 million worldwide daily active users between Q1 2023 and Q3 2023. Sensor Tower’s estimates indicate the SmartNews app has roughly 5 million worldwide monthly active users from Q1–Q3 2023, down an average of 30% year-over-year, per quarter, it said. Sensor Tower also suggested that lapsed product iterations and feature launches likely contributed to falling consumer interest and interaction with the SmartNews app.

According to recent data from app intelligence providers Sensor Tower and Appfigures, news aggregator app SmartNews faced challenges in 2023. The year began with layoffs and ended with co-founder Kaisei Hamamoto taking over as CEO after former CEO Ken Suzuki resigned abruptly.

In 2014, SmartNews, founded in Japan in 2012, expanded to the United States and added thousands of US cities to its coverage for local news.

The startup entered the market at a time when large mobile platforms such as Apple and Google were creating their own virtual newsstands for mobile and tablet users. Additionally, social media platforms were making efforts to become news providers in order to compete for advertising and traffic with traditional publishers. SmartNews had a different approach, partnering with publishers to source news, using algorithms to personalize feeds, and selling advertising to generate revenue.

This strategy was successful and received a lot of attention. Bloomberg reported in 2019 that SmartNews became the first news startup to reach a valuation of one billion dollars since 2015. Then in 2021, during a time of high-tech funding and increased reliance on online channels for news, entertainment, and work, the valuation increased to two billion dollars.

However, the success was short-lived as the app’s numbers began to decline over the past year. The landscape for news drastically changed when major sources of news traffic, such as Google Search and social media platforms, shifted their focus away from news links. Consumer preferences also changed, making it difficult for SmartNews to attract and retain users.

In the past, it was reported that the company had 10 million monthly active users in the US and was building an advertising team under the leadership of a former Google executive. But recent estimates from Appfigures show that daily downloads for SmartNews have decreased by half since January of this year and only a quarter of what they were in 2022. Since 2020, SmartNews has seen a total of approximately 45 million installs. However, given the decline in downloads, Appfigures estimates that the current number of active users would be closer to 5 or 6 million, which is significantly lower than the previous estimate of 10 million. Sensor Tower also confirms the decline in active users, reporting that SmartNews had an average of 1.7 million daily active users worldwide between Q1 2023 and Q3 2023, a 28% decrease year-over-year per quarter.

SmartNews declined to comment on the figures provided by these analytics firms and did not disclose any numbers itself.

An analysis by news site Rest of World suggests that the decline in SmartNews can be attributed to unconventional leadership under former CEO, Ken Suzuki. He resisted product updates and was more focused on the US political climate than audience metrics, which ultimately led to a downturn in the app’s popularity.

Another factor in Suzuki’s leadership may have been communication. When the company announced his departure, it also announced a new CTO, Cory Ondrejka, who was recruited by Suzuki himself from Google. However, on Ondreijka’s first day, he found out that he would be working with a different CEO. Despite this, Ondreijka remains optimistic about the company’s future and is confident that his team can overcome any challenges they face.

Sensor Tower suggests that a lack of product updates and new features may have contributed to the decline in user interest and engagement with the app. For example, their attempt at creating a more positive section within the app, SmartTake, was not well received as it still included stories that could contribute to “doomscrolling” – a term used to describe the negative impact of overwhelming and distressing news content.

In terms of competition, SmartNews faces challenges from other platforms such as Instagram, TikTok, Flipboard, and Substack who have also launched features to improve news discovery and engagement. Instagram’s co-founders even launched their own news aggregator app, Artifact, earlier this year. The app has already reached almost 407,000 downloads.

Looking to the future, SmartNews may need to expand beyond just news aggregation. Their CTO, Ondreijka, suggests that as technology changes, so do people’s expectations and what is valuable to them. He believes there is a path forward for SmartNews, and user feedback will guide their decisions. He also acknowledges that their category may continue to be news aggregation, but with a focus on delivering quality information in a more positive and manageable way.

Despite the challenges, competition, and changes in the industry, SmartNews remains determined to improve and adapt to the evolving landscape. This includes the expected launch of “Project Atlas” later this year, which will overhaul the app’s features. It’s clear that SmartNews will continue to face obstacles, but with a dedicated team and a commitment to providing quality news content, they hope to overcome anything that comes their way.

We reached out to SmartNews for comment, but they declined to provide any further information at this time.

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Kira Kim

Kira Kim is a science journalist with a background in biology and a passion for environmental issues. She is known for her clear and concise writing, as well as her ability to bring complex scientific concepts to life for a general audience.

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