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Stories Told Through Texts Helped This App Win 100m+ Teens

Hooked redefined how content creators engage with their audience

8 Minute Read
  • An app started to get young adults to finish stories found a better way to create them: Get early versions in the hands of readers as early as possible and iterate based on feedback.  
  • Community-driven platforms like Reddit are optimal places to pilot content initiatives before investing significant time and money; Steven Spielberg recently bought the rights to one story using this principle.
  • Interactive storytelling formats, optimized for smartphones, represent a new way for big content providers to monetize their relationship with consumers.
  • Suspenseful stories, typically in the romance and horror category, are where all the money’s at.

Young people crave stimulus — and the modern world obliges. Mobile phones and the internet provide constant streams of them: bright banner ads, colorful games, bingeable TV shows, infinitely scrolling content feeds. A text message buzzes and dopamine receptors in the brain respond with a quick biological fix.

According to a Nielsen analysis of the communication habits of people aged 22-37, younger brains have high multi-sensory processing capacity which leads them to seek out multi-sensory communications, especially ones that involve interaction. Touching, tapping, scrolling, and liking are the language of stimulating mobile interaction.

For years, reading on smartphones was largely devoid of the stimulating interactions we find elsewhere on our devices. But that’s changing, thanks to chat fiction and interactive story games — two fast-growing media formats introduced in the last 3 years.

Startups like Hooked and Pocket Gems combine suspenseful, short-form fiction stories with principles of interactive game design. And the growth in this new sector has been explosive:

  • Hooked gained 40 million active monthly readers in under 3 years.
  • Pocket Gems has 325m global downloads and over 4.4B story reads in under 2 years
  • The top 7 interactive story games were pulling in $14m a month in their first 2 years.

This report explores the unique business models associated with both genres and advice from a veteran game designer on how to bootstrap a content business.

Big Opportunity:

Take the chat-fiction format and apply it to true crime stories: one of the fastest-growing formats coupled with a popular women’s genre.

01 A data-driven approach to more engaging content

The story of chat fiction begins with a handsome Indian-American couple in 2015. After selling Songify to Smule for an undisclosed amount in 2011, married co-founders Prerna Gupta and Parag Chordia weren’t sure what to do with their newfound wealth. The couple decided to take a sabbatical and move to a small surf town in Costa Rica, where they spent their days surfing and writing a Young Adult (YA) sci-fi fantasy trilogy based in Silicon Valley.

Hooked Co-Founders

But Gupta felt something was wrong with the whole writing process. 

“It felt strange to spend so long behind closed doors creating this huge project, without having any sense of whether it would resonate,” she wrote in a 2017 blog post.

True to their backgrounds in consumer tech and lean startup methodology, they decided to run user tests to see how people were reacting to what they had written. The book was distributed through mobile phones and, after extensive testing, Gupta and Chordia found the story completion rates were far lower than anticipated. 

They responded by A/B testing new formats and stripping the story of the long, prose-heavy descriptions found in most novels. The first format they tested with this more concise version was inspired by comic books, featuring tons of images to help progress the story. It didn’t move the needle. 

They decided to overhaul the story, re-creating it in the form of a texting conversation. Completion rates rose to the 80th and 90th percentiles. They thought it might be a mistake so they ran the tests again — with the same results. According to Gupta, that was the “light-bulb moment.” Four months later, they launched Hooked.

Gupta labeled the format, “chat fiction.” At their core, chat fiction stories are a series of text exchanges among characters.

A chat fiction story on the Hooked app.

Hooked’s product came to market in September 2015, and Gupta and Chordia kept on testing. The goal: determine whether a data-driven approach to content creation could result in more engaging stories on mobile devices.

A few interesting insights came out of their initial tests.

  1. First, the recent YA trend of writing in the first-person present tense was no more engaging than stories told in the third-person past tense.
  2. Second, readers were more engaged with a story if they understood the context. It’s more difficult to hook a reader if the story starts in the middle of things, without context.
  3. Finally, teens are equally interested in stories with white and brown protagonists. Teenage boys are equally interested in stories with male or female protagonists. And teenage girls prefer stories with female protagonists.

02 The Rise of Chat Fiction

The next year, Gupta and Chordia would continue refining Hooked, building out a new archive of content and communicating with readers constantly. Things finally started to pick up in September 2016, and by December they were the #1 app in the US, with over 10 million downloads.

Hooked becomes the #1 free Apple app in December 2016

2017 would go on to see Hooked become the #1 free app in over 25 countries, according to Kevin Ferguson, Hooked’s CBO. (It’s no longer #1, but has consistently remained in the top 100.)

In late 2018, Hooked partnered with Snapchat to distribute its first long-form story — Dark Matter. Like most of its content, Dark Matter is a thriller. But unlike other content, this one is about 10,000 words — more than 4x the usual length of its stories. 

It’s not surprising Hooked stories have migrated to Snapchat, considering their predominantly young audience and the tap-to-advance interactive nature of its content.

The company has a simple rev-share agreement with Snapchat for ad revenue. It’s a win-win: Snapchat wants to get into content in a big way and Hooked wants to get in front of as many eyes as possible.

Thanks to the Snap partnership, Hooked now has over 100 million unique readers and 40 million monthly actives across its app and Snapchat.

03 Competitors Clone the Format

After the initial success of Hooked, several major competitors jumped into the space, including the now more popular Yarn, the 6th-most popular app in the App Store’s “books” category. 

Yarn launched shortly after Hooked and is very similar. It features text-based narratives with slightly different themes. For example, readers can have hypothetical conversations with A-list celebrities and read through imaginary group chats about dating. Yarn has 7.5B story reads to date and the average user spends 50 minutes reading their first week. 

I bought a subscription ($5/week) to check it out myself. The first story I read is called Modern Dating and supposedly has 9.4m views. It’s a texting conversation between a man and a woman who just met on a dating app. Each line is only a few words so the user is constantly tapping to advance the conversation.

If you’ve ever texted with someone from a dating app, you’ll instantly relate to the conversation. Basically, the girl is really into the guy and he says he likes her too. Then he ghosts her for two days and she goes on a multi-text rant about what an asshole he is and how dare he treat her so poorly. He comes back and apologizes profusely and the story continues with him manipulating and lying to her until she cuts it off for good. It’s seemingly silly, but the format does make you curious to find out what the next text will look like; and that plays in to the monetization model.  

Hooked and Yarn monetize by reeling readers into suspenseful stories and throwing up a paywall at critical points in the narrative. Readers either wait 15-25 minutes to keep reading, or pay the weekly, monthly or yearly subscription fees of $4.99, $14.99, or $39.99, respectively.

The majority of content on these platforms falls into the horror or romance genres because they suit the “suspense” monetization model. Readers will pay to find out if Becky gets murdered in her bedroom closet or if John really does love Susie, or if he’s just using her to get to Julia. 

Mammoth media, the company behind Yarn and a few other popular apps, raised a $13m series A in January 2018 to create “entertainment experiences for the mobile first generation.”

04 Interactive Story Games: $14m a month and over 5B reads

Chat-fiction’s explosive popularity with young women led to the birth of another, more gamified genre. Interactive story games. Games like ChoicesEpisodes, and What’s Your Story top the charts in this category. 

Picture an animated comic strip set in a highschool. Characters communicate with dialogue bubbles, and the stories are all about teenage girls and their various dramas. The big difference though; at certain points in the narrative the user is given a choice. For example, in the story, “Bad Boys Girl”, the main character, Tessa, asks the user, “Should I wear this?” referring to a promiscuous, low cut dress with lots of cleavage. The user can choose to pay 25 “gems” to go with the sexy dress, or choose the free option which is almost always the “not cool” option. And who doesn’t want to be cool?

“Bad Boys Girl” Story on Episode App 

Episodes alone claims to have over 4.4 billion story reads. While chat-fiction monetizes through a subscription model, these apps allow users to purchase in-app currency, like gems, to pay for cooler choices. 

VentureBeat reported in March 2018 that the top 7 interactive story games pulled in $14m a month from in app purchases on the App and Google Play stores. 

Pocket Gems, the company behind Episodes, raised $60m from Tencent back in 2015 for a 20% stake. Tencent recently doubled down with an extra $90m investment bringing their stake up to 38% and Pocket Gems valuation to $600m.

05 These Platforms Allow BIG Content Brands to Super-Feed Superfans

So where’s the money flowing? Content partnerships. Disney invested in content partnerships with Yarn and Episodes. In November 2018, Yarn announced a partnership with Marvel to create original content that allows its millions of young users to “interact” directly with characters from the Marvel universe. 

Mammoth media’s founder and CEO commented, “Allowing Yarn’s millions of users to immerse themselves in the Marvel Universe opens up opportunities to keep current fans even more excited and engaged.” It gives little Jimmy the chance to text directly with Spiderman.

Episodes also partners with brands that have cult followings like Mean Girls, Pretty Little Liars, and Demi Lovato to create original content.

06 An Opportunity for Entrepreneurs: Chat Fiction for True Crime

There’s one untapped genre that’s inherently suspenseful and widely popular: true crime. 

True crime has exploded in the past few years, from the 68m listeners of Serial to the 19.3m who tuned in to Making a Murderer in its first 35 days. 

Investigation Discovery (ID) was the 5th most popular cable network in the US in March 2019. ID features true crime stories. According to VP of ad sales at Discovery, Scott Kohn, ID had the longest tune-in time for all ad-supported cable (34 minutes) for women age 24-54 in January 2018. 

I spoke with veteran game developer and co-founder of Knock-Knock, Andrew Green, to discuss true crime for chat-fiction and what content creators can take away from the success of Hooked. 

When it comes to testing out new content, Green suggests taking a Hooked-style, iterative approach through Reddit and email. Writers should join an online community, like r/truecrime and start posting stories. The real-time feedback from reader comments will help direct how the story progresses and begin to build a community around the author. You can then send fans to a landing page where they’ll sign up for a newsletter to continue reading stories. Now, you have more control over distribution and can start charging readers, or you can use the community as proof-of-concept and launch the story on Hooked itself.

“There’s this guy that creates comics on Reddit, and he just sits there. Like after he posts the comic he just sits there for like eight hours. As people comment, he then updates the comic to reflect the comments, and then writes edits in caps, and links to the new comic update in a feed. So you can see the feed of all the updates real-time, and it’s hilarious, and everyone feels like they’re involved. That’s a total hack of how to do web-comics, and he’s gaining a bunch of traction.” Green said. 

Recently, Steven Spielberg purchased the rights to a thriller he found on Reddit called Spire in the Woods and is making it into a movie.

The idea of approaching story-telling the same way technologists and entrepreneurs approach product design was novel just 3 years ago. However, Prerna Gupta proved with Hooked that it not only works but can lead to consistently engaging content.