Apple's High Fees Delaying Print Rebirth On Ipad

[Lite Beer]

Apple's high fees delaying print rebirth on iPad

EDITORIAL By The Nation.

Wrangling over costs and revenue sharing holding back Tablet PC sales

Amazon did it first when Kindle was virtually the only elegant and effective way to read newspapers on a compact, convenient hand-held device. Now it's Apple's turn. The wrangling over prices and revenue sharing between news media publishers and "outlet" owners has shifted its venue, but what's happening is the same old story. Apple, proud of its iPad almost to the point of arrogance, is demanding a lot from print companies wanting to commercialise their contents on the tablet. Too much, according to their complaints.

Recent developments are not encouraging to those who have hoped the invention of tablet computers would serve as a quick-fix for the troubled print media industry. Optimism was recently boosted by the introduction of sexy-looking iPad magazine The Daily, launched with a $50 million endowment by Rupert Murdoch a few months ago, but there has not been much good news from that front ever since. Going by tweets emanating from the iPad magazine, the Nieman Journalism Lab deduced that tweets from the app had fallen off significantly since the first week and that the most tweeted-about story from the iPad app remained the editor's introduction to the first issue.

It may be a little unscientific to judge The Daily from how many tweets it has triggered. There is an argument that many readers of The Daily could be reading the iPad app and choosing not to tweet about it. iPad reading, some observers say, can be more of a "sit-back and consume" experience rather than a share-everything one. Yet there are analysts who believe that you ignore tweets at your own peril. The Daily is a big venture boasting a good collection of journalistic talents, and therefore the failure to be a bigger hit must be something worth scrutinising.

The Daily's failure to start with a bigger bang may have to do with another piece of not-so-good news for print media entrepreneurs. Despite all the hype and startling sale figures, iPad does not seem to be a mass product yet. That's an observation by Romanus Otte, general manager of Welt Online in Germany, which produces the country's leading news app. He also noted that there are fewer competing newspapers on the iPad than expected, though competition comes from new and free players.

We can trace everything back to the "pricing" issue. Tablets were hailed as a print media saviour because they gave "publishing" a new meaning. The industry has been about big investments in raw materials, printing machines and distribution, all requiring expensive labour forces. How great would it be to zero down those spendings and invest fully in contents?

One thing that many people forgot to ask was, what if Apple and other tablet makers decided to do an Amazon?

Which Apple has apparently done. Newspapers and magazines are reportedly complaining bitterly about the conditions imposed by Apple to market their titles and subscriptions to the iPad. In France, for example, editors are unanimously against what they claim are unfair revenue sharing and other iron-fisted conditions set up by Apple. The showdown has been deemed complicated, but no matter which side one takes - the publishers' or Apple's - it will not help the fact that the light at the end of the tunnel for the print media still looks quite remote.

Amazon used to capitalise on Kindle's status as a new platform for print media content, demanding a high percentage of revenue sharing. When tablets came along, the game changed and charges imposed on publishers dropped significantly. Today, Apple has found itself in Amazon's shoes a few years ago. The iPad is where print publishers want to put their content, and business logic requires Apple to take advantage of that. And many people will argue that Apple deserves the big profits it is demanding.

Publishers, however, are hoping Apple's leverage will also be short-lived. In the past it took time. When aeroplanes were invented, steamers lost their advantages, but not after years and years of enjoying a strong status quo. It was the same with TV and radio, or telephones and cellphones. The iPad's omnipresence depends on how fast the tablet market is growing, and with a new brand hitting the stores every other week, the print industry can remain very hopeful.

-- The Nation 2011-04-17

[aussiebebe]

Apple's fees are only part of the issue, even The Daily is moving to Google's Android-based tablets in the Spring despite it's early reliance on the ipad. The underlying problem is that no major news business currently makes more than around 15% of revenue from online, the rest of their profit and costs are tied up in print; machines, trucks, offices. The most profitable current approach is to charge consumers for news in all formats; print, tablets, online, smartphone - wherever, whenever. It's going to be a long, hard struggle to diesentangle print from online and cost structures will only become more manageable once they are segregated. New profitability and sustainability will be found in future digital-mainly news models which we are only just seeing taking shape.

[lomatopo]

This New Yorker article, although now nearly one year old, might be of interest...

PUBLISH OR PERISH Can the iPad topple the Kindle, and save the book business? by Ken Auletta

[Crushdepth]

Apple's greed and control freakism may have some benefits on the app side, but it makes no sense at all on the publishing side. They have the opportunity to carve out a large chunk of the market if they are smart, but publishers will go elsewhere if they don't get a better deal and that's what I think will happen.

Kindle and Audible are both great. Wouldn't take much for a company to stick their own content app in the Android store either.