Media Apps and the iPad: Surprise! Free Is Better

Media companies looking for signs that the Apple 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. 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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