Is the iPad Really the Savior of the Newspaper Industry?

Even before the iPad was revealed, analysts, pundits and the publishing industry were already heralding the tablet as the platform that would save the industry from declining readership and dropping revenue.
The iPad’s high-res display, large screen, digital delivery and interactive capabilities were lauded as the next generation of tools that print publishers could use to woo their readers back into the fold.
Now, six months after the iPad’s launch, we thought it would be interesting to take a look at which newspapers have taken advantage of the digital platform, and the state of the market today.
We recently tested the apps ourselves and spoke with content creators and industry experts to get an overview of where newspaper iPad apps are — and where they might be headed in the future.

Adopting a New Way to Consume News
In order for the general public to consume their daily news on a tablet device, they have to own one. Although great things are promised for the consumer tablet, recent data from ABI Research suggests that at the current rate of sales, such devices won’t reach what’s considered “mass-market penetration” until 2013.
However, there are enough devices out there to make app building worthwhile. Apple sold 3 million iPads within 80 days of the product’s release in the U.S., with the most recent sales figures (dating back from July)coming in at 3.27 million sold.
Wall Street analysts Bernstein Research suggest that the iPad is enjoying the fastest adoption rate of a consumer electronics gadget ever — even overtaking the DVD player and Apple stable-mate the iPhone .
Forecasters at the Harrison Group found that 13% of all American consumers showed “interest” in buying a tablet device between now and next September, with potential sales of up to 15 million units. In fact, some reports suggest that the iPad’s popularity could affect PC and laptop sales figures as consumers opt for the touchscreen tablet over a new netbook or upgrading an old PC.
As far as the wider market goes, Apple is far from the only player. RIM’s BlackBerry PlayBook, the Android -based Samsung Galaxy Tab, and HP’s PalmPad are just a few of the alternatives due soon on competing operating systems.
And the good news for content creators on the tablet platform is that consumers are hungry. The Harrison Group survey found that tablet users spend nearly 75% more time reading newspapers and newspaper articles, and 25% more time reading books.
Those surveyed were apparently so convinced by the digital delivery and form factor, that 81% of tablet owners believe that it is inevitable that all forms of publications will eventually be produced almost exclusively in a digital format.

Establishing Pricing and Attracting Readers
So what is the current state of the newspaper app market for the iPad? Six months after the iPad’s launch, more than 900 apps populate the “News ” category in the App Store in both the U.S. and the UK. News is a broad category, however, and it includes feed readers, other types of content aggregators, websites’ iPad apps, and even magazine apps.
The number of actual dedicated newspaper iPad apps is low — surprisingly low if you consider how the platform was heralded as the savior of the industry. In the U.S. the Wall Street Journal and USA Today are the main options, along with a recently released “complete” version of The New York Times’ app. As far as big names in the UK market goes, The Financial Times, The Times, The Daily Express and The Sun offer apps, while The Telegraph is currently dipping its toe into the water with an Audi-backed app.
Out of those options, only the USA Today, The New York Times and a trial version of The Telegraph apps are free. The others require payment to either download or access full content, making them a “personal choice luxury” rather than a must-have download, considering how many free options exist. (It should be noted that while The New York Times app is currently free, you will need an account to access all of the content once the paywall goes up in January 2011).
So why is this the case? Surely struggling publishing companies would do well to attract as many users to their apps as possible in order to increase brand loyalty and make money from mobile advertising.
Paul Gillin, a social marketing consultant and author of the Newspaper Death Watch blog suggests that, in time, apps could be a “significant revenue stream” as the platform grows. He says that newspaper companies are wary of falling into the same trap they did when free online versions of their papers debuted, making it hard for a pay structure to be introduced at a later date.
This assertion is backed up by data from the Association of Online Publishers “Content & Trends Census 2010.” The census revealed that apps are seen as “the most significant route for mobile Internet revenue opportunities,” according to the UK publishing companies (not limited to newspapers) that took part. In fact, 61% expect to see significant revenue from subscription services, compared to 55% via sponsorship and 46% via in-app advertising.
The same AOP research also reveals that while 16% of online publishers currently have paid-for iPad apps, another 60% are planning to introduce one in the next 12 months.
“Publishers are establishing pricing from the start,” says Tim Cain, head of research and insight at the AOP.
“iPad apps are being seen differently [than] mobile apps. It’s thought that people value them differently and will be prepared to pay.”

Readers Respond to Subscriptions and Pay Up
So just how many people are prepared to pay, and how many are using the apps? Different companies have different policies on revealing their download figures and are generally even more secretive about subscription stats.
We can, however, note a few choice numbers. The WSJ for iPad has been downloaded more than 650,000 times since its launch and has “thousands” of paying subscribers. The FT’s iPad Edition option has seen 400,000 downloads and is credited for driving 10% of all FT digital subscriptions since its launch. Meanwhile, USA Today’s free app has had a slightly higher download figure of over a million.
If companies are guarded about download stats and subscription figures, they are even more guarded about how those relate to revenue. This is not the case for the Financial Times, however, as Ben Hughes, the paper’s deputy chief executive recently revealed to The Guardian that its iPad app’s 400,000 subscribers have helped the app reach £1 million (approximately $1.5 million) in advertising revenue since May.
And previous reports note that in-app iAds are fetching as much as five times the price of online advertising, with click-through rates reported to be significantly higher (15% versus 0.10% in a recent NYTM campaign from JPMorgan Chase & Co) on the tablet device than a website.

News Organizations Harness the iPad’s Possibilities
These stats show that consumers are obviously downloading and using these apps, but which consumers? Are the papers cannibalizing their own print and online audiences with shiny new apps? Or are the App Store offerings opening up a different market to the titles?
“The iPad definitely provides a valuable platform for newspapers to engage their readers in a new way and, in many cases, to appeal to a different set of readers,” says Dena Levitz, manager of digital strategies for the Newspaper Association of America. “Mobile is going to be a growth area going forward, and tablets are one exciting subset of that larger trend.”
The Dow Jones & Company’s senior director of corporate communications Ashley S.Huston says the Wall Street Journal’s plan is to offer content wherever readers are. “We know that readers consume news and information on multiple devices … The iPad app complements our existing print and digital offerings with an experience created specifically for the iPad.”
USA Today, meanwhile, notes the obvious portability the platform offers, making it a good choice for those away from home. Matt Jones, vice president of mobile strategy and operations for Gannett/USA Today tells us: “Our target is the early and middle stage tech adopter, frequent traveler and general news/sports/entertainment enthusiast.”
Despite the comprehensive content in the Financial Times iPad Edition, the publishers view the app as a “companion product,” and notes the value of easy global distribution in places where it’s more difficult to distribute a print copy, according to Steve Pinches, lead product development manager at FT.com.
So far we’ve only considered national titles. Regional newspapers, arguably the hardest-hit markets, could take advantage of the iPad’s potential too, like UK publishing company KOS Media did with its free Kent News for iPad, which was released in August.
The company is not releasing its download stats, so we have no way of knowing how popular the launch has been, or if, as KOS Media claimed at launch, it has offered “huge advantages” to iPad owners.
With national publications seeing an increase in click-through rates on its in-app advertisements, it would make sense then that location-based advertising might see similar success. And that success could be replicated by local papers. They should view the tablet platform as the potential savior it was initially billed as.

Newspapers Must Adapt Again to New Technology
After looking at a variety of newspaper iPad apps, our main complaint — and we’re generalizing across the entire market — is that they don’t take enough advantage of the iPad’s wowing capabilities.
This view is shared to a certain extent by Roger Fidler, the program director for digital publishing for the Reynolds Journalism Institute at the University of Missouri. He is organizing the RJI National iPad News Survey “to better understand how people are consuming news on the iPad and readers’ expectations for news apps.”
“I’ve long believed that utilitarian tablets like the iPad would evolve into the 21st century equivalent of the printing press; and, as such, would be vital to the digital transformation of newspapers and magazines,” says Fidler.
Fidler says that newspaper iPad apps need to offer a new visual format that blends the “relaxed reading modality of print with the dynamic interactive modality of online media.” It should be differentiated from print and online editions and offer tablet-specific content — all things he doesn’t think most apps are doing very well.
The solution could be found in a new “hybrid newspaper app” suggests Fidler, in which “automated sections with continuously updated news stories and more visually rich magazine-like sections created by editors and designers could coexist.” The Reynolds Journalism Institute is experimenting with exactly that kind of new publishing model.
The NAA also acknowledges the need for newspapers to “differentiate” content, and digital strategist Levitz says that consumers read longer-form content on the iPad, and they really enjoy the high quality of the visual images on the screen. She thinks newspapers can thrive in the tablet space if they take advantage of the device’s capabilities.
So is the future of print to be found in touch-screens? In the immediate future it certainly seems that publishing companies are going to be jumping on the app wagon, but how many of them will go the distance is questionable. You’ve got to think that targeted papers such as the WSJ, or the FT for business types, or geographically relevant titles have got the brightest future in the app market because they offer something that can’t be found via generic news feeds or readers.
“I would expect to see the iPad and the dozens of competing products planned for this year providing revenue for newspapers either through subscriptions or advertising sponsorships,” says Levitz. “Still, we expect tablet apps will be one part of a broad portfolio of products which will continue to include print products in some form, web-based products and other emerging products. Newspapers will continue to be the dominant local sales and content franchises reaching a range of audience segments through multiple media channels.”
The new sparkle of the iPad will keep the newspaper app market buoyant only for so long, and unless Fidler’s “hybrid newspaper app” advice is heeded, consumers will grow tired of the app-ified newspaper just as they have grown tired of previous formats before that. Newspaper Death Watch’s Paul Gillin has a grim take on the future.
“Will tablets save the mainstream publishing industries as we know them?” he asks. “No. There is still a lot of pain to come as publishers wind down their print operations over the next 10 to 15 years. However, tablets could present a source of some circulation revenue growth that helps ease the pain somewhat while that transition occurs.”
So, with more and more ways to consume free news content, is the traditional newspaper’s time up, regardless of platform? Or is the tablet the shot in the arm that the industry needs to really innovate and grab consumer’s interest once again? Have your say in the comments below.

Source: Mashable