A big slice of the Jesus Tablet presentation yesterday was taken up with the New York Times’ SVP for Digital, Martin Nisenholtz, demo-ing the NYT’s iPad optimised app. Apparently the app was thrown together in 3 weeks (!), but already looks like a fantastic interface for looking at content, and one I personally will certainly purchase for myself. Nisenholtz said “We’re incredibly psyched to pioneer the next generation of digital journalism. We want to create the best of print and best of digital, all rolled up into one”.
But will the iPad save newspapers? Will it help publishers crack the paid content puzzle, and get people buying news content again, like the good old days? I really, really don’t think so, much as I’d like to believe it. Here’s why:
1. Readership. Newspapers are/were a genuine mass market medium. I mean really, really mass: the majority of the country used to purchase one every day. Even 10 years ago national daily papers in the UK sold almost 13m copies a day, which at current prices translates to ~£6m in revenue every day. In the year 2000 daily newspapers made £1.8bn in cover sales. To put it in context, the Daily Mail sold about £400m, while Coca Cola sells about £500m. Serious business, and that doesn’t even include advertising revenues.
In total, over the last 10 years the daily newspaper market has lost about £465m a year in cover sales. Now … let’s suppose, generously, that a newspaper might make £10 from the sale of one iPad app. In order to cover that shortfall App store would need to sell 46,000,000 newspaper apps to cover that shortfall.
The reality is, however great it looks, the iPad will probably still be a niche item. If they do really well, Apple might sell 2m in the UK. Of those, let’s say 1.5m buy a paid-for newspaper app (this is unlikely but still possible, considering the Guardian has sold 70,000 iPhone apps in the first month). That’s still only £10m to share between 10 daily papers. Handy new revenue line, but a long long way from revolutionising your business.
2. Competition from the internet. The iPad is, according to Jobs, the “best web experience you can get”. From what I’ve seen, it looks it, and that’s enough for me.
This is the difference with the iPhone, and its stunning success as an app platform. The iPhone apps are vast improvements over what you could expect using the iPhone’s net browser – intuitive, quick, nice to use. But if the iPad is built with the internet in mind, will people convert to a paid-for newspaper app when they can look at the same newspaper’s website for nothing? Some people will, including myself, for the small incremental benefits you will no doubt get from an optimised native app. But I bet a whole lot of people will be satisfied with the “best web experience you can get”.
3. Fundamental structural industry problems that remain un-addressed. The newspaper industry is in trouble because its structures and costs are way out of proportion with a digital age. It’s not in trouble because consumers were waiting for a nice piece of kit to read newspapers on.
When digital distribution means a one-man operation can start a site that competes on the same stage as national newspaper sites with hundreds of employees, there’s a big problem.
And unfortunately, the economics of iPhone/iPad content app distribution will be exactly the same. While big publishers will get in first with apps, pretty soon the smaller guys, the startups, will start to compete in the same space. And their apps will probably be free as well, and then you’ll be back where you started, except you spent £100,000 on an above the line marketing campaign for your app and they didn’t. And there you go