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Media Apps and the iPad: Surprise! Free Is Better

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Media companies looking for signs that the Apple (s aapl) iPad will be their iSavior aren’t likely to get much comfort from the early numbers on media app downloads. Early indications are that users want to read newspapers and magazines on their shiny new devices, but they seem to prefer free apps to paid ones. There is one notable exception, however — namely, the Time magazine issue that features a story on Steve Jobs and the iPad. That issue, which sells for $4.99, is currently the No. 1 top-selling app in the news category (the Wall Street Journal app is also difficult to categorize, since it’s a free download but users still pay to read articles).

That said, it seems likely that these results are just the tip of the iceberg as far as media apps on the iPad are concerned, and that a growing numbers of users will likely discover that they can get what they want either through free apps or via the iPad’s web browser.

The biggest issue confronting media companies is that their iPad apps in many cases simply replicate the design and features available on their free web sites, but they’re expecting users to pay as much as $17.99 a month for the privilege of reading that content on an iPad (in the case of the Wall Street Journal). This disconnect has drawn criticism from many observers, including venture investor Paul Kedrosky, who said that:

Paying $17.29/mo for WSJ iPad app should disqualify you for something important, like being allowed to use money.

Kevin Anderson, former blog editor at The Guardian, said that iPad app pricing is “a last act of insanity by delusional content companies.” And the sense that media apps are trying to wall off their content from the broader Internet is also likely to be disconcerting to some, says Josh Benton of Harvard’s Nieman Journalism Lab. Meanwhile, some newspaper and magazine companies are still reluctant to embrace the iPad because they are afraid of ceding too much control — and giving up too much revenue — to Apple, according to a report in the Wall Street Journal.

Publishers are worried that paying Apple 30 percent of their sales from the device will eat into their revenues too much, and are also concerned that the computer company will wind up controlling access to the subscriber data that comes from the iPad. Several major media companies — including News Corp. (s nws) and the four largest magazine publishers — are apparently trying to create their own digital storefront for content because they don’t want Apple to control access to their publications through its own iTunes media store.

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15 Responses to “Media Apps and the iPad: Surprise! Free Is Better”

  1. Guys come on… if you’re complaining about iPad app pricing, how are you supposed to get the iTable (or the iPad keyboard dock) to be able to type on it? Do you have an iPad hammock at least, or you just bought the iPad to tell your friends you are an early adopter?

  2. Although I’m waiting for my 3G iPad to be shipped, I can’t wait to rid myself of all paper based media. Not only will I help save a lot of trees, the rich multi-media experience the iPad makes possible is the true selling point for me.

  3. George C.

    I see my monthly budget on content for the iPad to be around $50, no different from the paper print / DVD days. Sounds like a lot but isn’t. I want to spread that around NYT, WSJ, FT, Economist, Newsweek, Wired, Barrons, Time, Sports Illustrated, Hulu, Netflix, and that impulse movie purchase on iTunes. OK, so content providers should do the math and realize that the idea price point is NOT $18 per app, but somewhere around $3-$5 per month. After owning the Pad now for 48 hours, I believe that Apple has delivered the hardware which allows me to transform completely into digital format. Now the content providers just need to join in.

    • I agree, George — everyone wants to think that users will pay $18 a month or whatever for their app, as though they are the only option, but the reality is that consumers will have multiple apps (and the entire web) and a limited budget they wish to spend.

  4. The Ipad will save Apple Corporation but not journalism
    Journalism was already in decline before the Ipad was launched. What will you be writing about using you Ipad that will make you a better or worse journalist? Journalism is not dying, it’s just not the same. Will the popularity of the Ipad translate to better journalism? BIG NO! The demise of journalism started years ago when journalists started to write desperate articles just to get the information published. Now, it is mass media journalism. It’s got nothing to do with ethics or factual writing. Get the information or misinformation out and that is what journalism boils down to. To make it worse, bloggers think they are journalists! lol
    Everybody loves free so why pay for something you can get for free? It doesn’t make business or journalistic sense. Free is good and I should know. lol

  5. Free is going to be the preferred mode, but productivity applications and such are going to be priced higher, but not to the level of boxed software. We are moving away from high software prices outside of the workstation market. I believe this actually has consequences for Microsoft office in the not too distant future.

    $17.99/month is ridiculous. $99/year maybe. Combined with the print version at current web rates OK. This is not going to change the fundamentals of the market! The mobile market simply values good information. That is distinctly different than the web, but that does not mean that mobile users are stupid.

    • I think you are right, Nicholas — what media is going through with new platforms like the iPad and pricing of apps is the same kind of transformation that other kinds of content are going through as well. Thanks for the comment.

  6. sfmitch

    As an iPad owner and a lover of magazines, I would love to kick the paper part of the magazine habit and read them on the iPad, BUT there is no way that I am paying $5/issue. The market has set a price – the iPad version shouldn’t come in above it.

    I get subscription offers for most magazines for around $1/issue. I would pay that price. Publishers save money on printing equipment & supplies as well as postage and I read their content and look at their ads.

    I don’t even think Publishers need to try and get all crazy coming up with an interactive magazine – if they can get more money from advertisers, then great – just take the paper out of the current equation and you’ll have my $1/issue (give or take).

    I think most Publishers are just plum crazy and they are in for a rude awakening.

  7. This is a no brainer:
    1. “Free” is always the best price. That’s why “FREE” always pulls high in direct marketing.
    2. Print media’s value, to advertisers, has always been in their readers, not in their content. Content has value, but only when it brings in readers (one could argue that content has intrinsic value, but there’s no pay model without a reader).
    3. The business model is not broken, just changed. Media: stop whining and get with the changed model.
    4. The media is smart to be wary of letting Apple siphon off their profits and control their distribution to readers.

  8. Dude, you live in Canada. Have you even tried an iPad yet? How about you wait to write about the iPad and iPad apps until you’ve actually tried it for yourself.