On the iPhone, publishers established a beachhead with free news apps. The iPad, however, has them drooling over a steady stream of revenue. But for customers to cough up the money, publishers will have to create compelling content with great design. The down select by customers will sour the wannabes.
When one upgrades to the iPad version of the USA Today app, there’s a note that says content will be free until July, 2010. At that point you’ll need to pay for access USA Today on your iPad. Previously, we learned the Wall Street Journal will charge US$17.99 per month, Time Magazine will charge $5 per issue each week and Popular Science+ will cost $5 per monthly issue.
The Value Proposition
All these prices seem high compared to what we’ve been paying for some pretty good apps, but the thinking by publishers is that now is the time to place a value proposition on what they consider to be their valuable content. The iPad is their beachhead, and they’ll take their stand there.
The problem with that approach is that it’s all too easy for a senior executive to set a price for content. He/she need only consult with a few people and then follow her/his gut. What’s much more difficult is to wrap that supposedly valuable content in an app package that’s truly compelling — so compelling that the customer is willing to cough up those big bucks.
This is no time for news publishers think about saving money.
Over the next few months, many publishers will roll out apps for the iPad whose price will give customers pause. Only the best designed content will attract customers because they have plenty of other sources for news on the Internet.
Not only must the app be exciting, superbly designed, stable, well executed, utilize all the best Apple technologies available in the iPad, but it must also convey the idea that the publisher’s content is authoritative. For example, anyone can cruise around the Internet for news, but is it trustworthy? Have the facts been checked by professionals with well-established sources? Many publishers assume the reader knows that they are authoritative and can be trusted by virtue of their brand. But not every young person knows how to judge the validity and credence of what they read. Beware: the reader community is ripe for demagoguery.
Publishers must not only bring the great design principles to the iPad that they use in print, but they must go beyond that to create a package that exudes so much class, taste, professionalism and beauty, that the customer is willing to pay the asking price without a second thought. That requires a considerable investment in the developers who design the content.
It’s going to be a cruel year. Publishers who have the wherewithal to create a truly great iPad app will flourish. The wannabes who thought they could skate with a few tweaks to the iPhone app (and then charge a hefty fee) will find that iPad customers will be very fickle. Only a few publishers will succeed at this art and science, and the rest will fail, muttering sour grapes. Worse, they’ll give up and rationalize that their print edition remains the way to go. Then, all of a sudden, when the population of iPad (and its PC counterparts) reaches a critical mass, their paper subscriptions will dry up at an alarming pace. It’ll be too late to catch up.
Most customers of the iPad generally have a dollar amount in mind when it comes to discretionary expenditures for news sources. Reviews and word of mouth will help them decide how to allocate those funds. If a publisher wants a piece of that fund, it will need to create an enormous value proposition in its app. Otherwise, the customer will just ignore a possibly valuable resource and find other news sources. That could be as good as sticking with the corresponding print edition or, worse, they could fall into the dangerous habit of other Internet sites that perniciously feed their preconceptions and biases. That would be bad for American journalism.
There might be room at the top for, say, four to six of these news apps by the average user. Everyone else, all the losers of this war, will need to come up with some other way to finance their product.
So far, it seems, publishers are playing a high stakes game of charging as much or more than they charge for print edition. However, if their execution on the iPad doesn’t measure up, they risk losing a chance to be in that select group of a half dozen. Then, it’ll cost a whole lot more to break through the customer’s cost allocation barrier in the future — if they’re even granted a second chance.
This winnowing process won’t be a pretty sight, and many publishers who put up a half-hearted iPad effort will fall by the wayside — even in their print editions — as their reputation for technical excellence and customer commitment wanes.