December 19, 2012
Magazine and newspaper apps proliferate, but risks still loom
by Kevin Murphy
It’s not shocking news, but more and more magazines and newspapers are using apps — be they native apps that work directly on iPads and iPhones or HTML5 apps which function on multiple devices — to deliver content. And though the margins are still rather horrendous, many media publishers feel optimistic about the future, citing paywalls, advertising, and direct sales as fruitful ways of generating new and vitally important revenue.
The Alliance for Audited Media surveyed 210 North American magazine, newspaper and business publications, seeking insight into “How Media Companies are Innovating and Investing in Cross-Platform Opportunities.”
The most popular distribution platform is the iPad, which overtook the iPhone this year as the platform for which publishers are developing the most content. 87 percent of publishers surveyed have iPad apps, 85 percent have iPhone apps and 75 percent have Android apps. But apps for Kindle and Nook are catching up: 67 percent of publishers have a Kindle app (up from 24 percent in 2011), and 57 percent have a Nook app (up from 14 percent in 2011). (It’s unclear whether this refers to Kindle and Nook tablets or to e-readers; the AAM asked about Nook and Kindle in general and didn’t specify device.)
It makes sense Apple is the most popular platform — it has the best devices. But using Apple to distribute content has drawbacks, including costly subscription fees and sharing limitations. What’s more, at least according to this report, Apple apps are surprisingly easy to hack.
But hackers be damned. Media is eager to make content available to as many readers through as many distribution platforms as possible.
Publishers are by no means abandoning native apps (developed for specific devices, like the iPhone) for web apps (which use HTML5 to deliver content through web browsers and can be read on any screen size). “We must do both now, although we still deliver a better experience with native,” one newspaper publisher said. “Apple’s charging for subscriptions are a drawback and Amazon does not have acceptable economics for publishers.”
If your business is developing native or HTML5 apps, all of this is wonderful news — apps cost a lot of money to build and, if done well, go a long way in displaying talent and drumming up new business. This is also good news for consumers, whose reading habits and expectations are becoming much more sophisticated. But is it truly good news for media publishers, who have yet to see profits from their efforts and essentially are keeping their fingers crossed that all of these distribution platforms do not quickly become obsolete when the next technological miracle comes to market?
According the Wall Street Journal, not so much:
In today’s market, it turns out that coding is the relatively easy part for apps makers. Marketing and selling the app remains a crude undertaking. It’s still difficult for users to discover new apps much beyond Apple’s “Top 10” lists. As in Tin Pan Alley, a mercenary world of gimmickry and “hit-making” middlemen promise to push an app onto these charts. Song-plugging has even returned. Today it’s called “pay per install”—in which app developers pay anywhere from a quarter to a few dollars for each app download.
The Guardian sings a similar tune:
Industry analyst Canalys has been conducting its own research, with senior analyst Tim Shepherd making a sobering claim:
“We estimate that up to two-thirds of the apps in leading consumer app store catalogues receive fewer than 1,000 downloads in their first year, and a significant proportion of those get none at all.”
Apps come in all shapes and sizes, of course, and some of the fallout described above does not directly apply to the media marketplace. However, it does illustrate that apps are ubiquitous, and that it does not much matter the industry — be it gaming, dining, or publishing — hundreds of apps are vying for attention, and sales.
But for media with dedicated readerships, a workable alternative has emerged — PAY WALLS:
Metered paywalls (the New York Times model, where a visitor can read a certain number of articles before the paywall kicks in) are the most popular, used by 39 percent of respondents. Combination paywalls, which charge for premium content (the WSJ model) came in second, with 33 percent of respondents using them.
“The growth for digital editions is from our web users, not from converting print readers to digital users,” one respondent said. That means not just paywalls but also advertising: 77 percent of publishers believe mobile revenues should consist of both subscriptions and advertising, up from 52 percent in 2009.
Twenty percent of publishers surveyed estimate that their digital products (websites, mobile and social media) will account for at least 25 percent of advertising revenue in 2014, up from 4 percent now.
It still remains to be seen whether readers will warm to the idea of paying for digital content on a large scale, although one suspects that if print is in fact dead, it will only be a matter of time before magazine and newspaper apps are in the black.