Publishers thought they had rediscovered the principle of getting readers to pay for content
I came across the following article about apps and the future of digital publishing. At a time when publishers are desperately trying to monetise their content provision it makes for an interesting read.
Apple’s iPad, the mobile device that has singularly added massively to the share price of the leading tech company, was attractive to many publishers because they believed it could deal with the problem of not charging for their digital content in the first place.
Companies with long standing broadsheets now wanted a return on their investment in journalism if the content appeared in electronic form. If they were to continue to invest in journalism and the talent to develop their brand, the question became where was the profit?
The iPad (and the content economy that Apple created along with it, thanks to iTunes and more recent additions like the newsstand) seemed to offer a solution. Here was a mobile device that would replicate the magazine or newspaper experience in digital form, with Apple handling all of the cumbersome back office payment issues.
Publishers thought they had rediscovered the principle of getting readers to pay for content. However what actually happened was that Apple enforced its usual 30% commission rate on any subscription sales. The tech giant also changed the rules to ensure that it was more difficult for publishers deal with that barrier.
Apple’s cut proved for many content publishing companies to be a significant disincentive as the tech giant’s percentage cut in some cases made it unprofitable to selling content through the device at all. Then there were the techie type issues of making good content transparant on the mobile device. For instance, the image heavy magazine issues, that added to the costs, made apps less attractive for some users.
It should be noted that linking to articles is merely a technical problem of the store operator as publishers can use deep links into apps. Indeed, the same links could be used for content on the web, behind a pay-wall but freely accessible to a search engine.
Many of the limitations we see in apps are not hard and fast, but the result of decisions made by publishers. Indeed when WH Snith sells a magazine on the high street it takes how much? Perhaps we need to see Apple as a delivery system and retailer and then 30% might not be seen as so severe.