Running a media company in the digital age just got a lot harder.
Media companies are already scrambling to adapt to consumers changing viewing habits while marketers shift more of their spending to mobile from traditional television. But now Apple (AAPL) - Get Report has thrown another wrench at their bottom lines: allowing ad-blocking features on its operating system.
Apple's new operating system will allow users to install apps that can filter ads on mobile devices, which will challenge companies like Google (GOOG) - Get Report and many other publishers that rely on online ads to drive profits. Apple's open-source permission paves the way for iPhone and iPad users to enjoy increasingly popular technology like Adblock Plus, a plug-in that works with Google Chrome.
With the goal of improving user experience, Apple's next operating system, expected to launch next month, will let users to block ads in the Safari browser, which has long allowed ad-blocking software on its desktop version, but not yet for mobile devices.
"Ad-blocking has existed as a possibility for a long-time, but it has really accelerated the last year or two years in the desktop world. Now it's spreading to mobile," said Jason Kint, CEO of Digital Content Next, a digital publishing trade association, told TheStreet. "If it works, it will be very disruptive."
Kint called the move toward more mobile ad-blocking "a very concerning trend." But he said while most companies that rely on ad revenue will face an immediate hit as the number of views per ad decline and advertisers pay less as a result, it's "still hard to pick long-term winners and losers."
Google has anchored in as the top search engine and derives most of its $66 billion in annual revenue from AdWords, an online ad service that aligns advertisements with search results. With 243.4 million unique viewers on desktop and mobile in July 2015, more than 40.9 million of Google's viewers last month were using their mobile devices, making it vulnerable to growing ad-blocking trends.
Here are four companies besides Google with business models that would see a revenue shakeup with more mobile ad-blocking technology:
Facebook (FB) - Get Report , which drew the second-largest unique viewers in July 2015, relies even more heavily on mobile traffic than Google. More than 68.9 million of the social media company's 231.9 million unique viewers last month, or 29.7%, were from mobile channels.
Facebook has been growing its online revenue, making it more vulnerable to mobile ad-blocking but Facebook, with a market cap of $254 billion, is also in a position to pay app-developers to keep it "whitelisted," or off the list of companies that the apps will block.
"An interesting dimension to this [ad-blocking trend] is that certain types of companies are going to be willing to pay extra money to block through advertising," Kint said. "Facebook is certainly in a better position long-term."
Yahoo! (YHOO) , with a market cap of $29.5 billion, has websites like Yahoo News, Yahoo Finance and Yahoo Sports that drew 210,323 unique viewers last month, 29% of which were unique mobile viewers, according to ComScore data. Yahoo also owns 15% of Alibaba BABA, a China-based e-commerce company.
"In the short-term, adblocking is disruptive for almost everybody," Kint said. "The entire ecosystem should be aware of ad-blocking. It's a topic too many companies are ducking and it's time for the industry to come together to find solutions."
Verizon recently completed its $4.4 billion acquisition of AOL, hoping to profit from its ad-technology platform called ONE, which analysts say is rivaled only by Google. Verizon has said it will invest more substantially in beefing up original content for the Huffington Post.
"Long-term, the companies that are actually take the consumer in mind and ultimately builds up the trust of the consumer are going to be in a much better position," Kint said.
Amazon (AMZN) - Get Report , now the largest U.S. retail after Walmart by market cap, has partnerships with a growing number of retailers, hosting websites for companies like Sears Canada and bebe Stores. Amazon is partnered with DC comics for exclusive rights to comics like Superman and Batman and is investing in expanding its retail servcies abroad.
Amazon sites drew 175.97 million unique viewers last month, 71.76 million of which, or 41%, were mobile users, according to comScore data.
Amazon does have a diversified business model, including consumer electronics with its Kindle and Amazon TV products, an online auction site, a grocery delivery service, a music business and more.
This article is commentary by an independent contributor. At the time of publication, the author held shares of Google.