Are publishers waking up from their dream about apps?

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When Apple’s iPad arrived on the scene in 2010, many magazine and newspaper publishers saw it as a gift from the gods: a chance to turn back the clock and convince consumers to pay for their content in a new form. But for many, that dream has given way to the cruel reality that apps are at best a stop-gap measure, not a dramatic new business model. As MIT Technology Review editor and publisher Jason Pontin points out — in a post about why his magazine has decided to kill its app — the benefits don’t outweigh the negatives for both readers and publishers. It’s a lesson that some other content producers might want to consider.

The iPad — and the content economy that Apple created along with it, thanks to iTunes and more recent additions like the Newsstand — was alluring for many publishers because they believed it could overcome what they saw as the “original sin” of not charging for their digital content in the first place. It seemed like the perfect solution: a device that would replicate the magazine or newspaper experience in digital form, with Apple handling all of the annoying back-end details around payment. As Pontin describes it:

Publishers believed that because they were once again delivering a unique, discrete product, analogous to a newspaper or magazine, they could charge readers for single-copy sales and even subscriptions, reëducating audiences that publications were goods for which they must pay.

This idea soon collided with reality in a number of ways. For one thing, Apple enforced its usual 30-percent commission on any subscription sales, and changed the rules to make it more difficult for publishers to get around that barrier. For a lot of content companies this was a significant disincentive, since Apple’s cut in some cases removed any upside to selling content through the device at all. And then there were the technological limitations involved in reproducing content on the iPad — particularly image-heavy magazine issues — which added to the costs, and made apps less appealing for some users.

Apps don’t fit with the way content works online

But I think Pontin is right when he says that many of these technical or structural issues weren’t even the biggest problem for content apps. The biggest problem is that apps are walled gardens by design — most allow you to share articles through social media, but they don’t contain links and in most cases they don’t have comments either. And that just doesn’t fit with the way many people consumer content now, especially the assumption that users will download a single app or subscribe to a single provider instead of using aggregators or apps like Flipboard and Zite. Says Pontin:

When people read news and features on electronic media, they expect stories to possess the linky-ness of the Web, but stories in apps didn’t really link. The apps were, in the jargon of information technology, “walled gardens,” and although sometimes beautiful, they were small, stifling gardens… I hated every moment of our experiment with apps, because it tried to impose something closed, old, and printlike on something open, new, and digital.

That’s not to say some publishers haven’t produced excellent-looking apps, and there have been some interesting experiments with the app form — including Richard Branson’s magazine Project or the gamified magazine that Gourmet came out with, which “unlocked” new content after users had consumed a certain number of articles. But Pontin notes that even successes like Condé Nast, which saw its digital sales increase by 268 percent last year, are still relatively small potatoes in the overall scheme of things: Wired magazine has just over 7,00 digital single-copy sales, according to figures from the Audit Bureau of Circulations, which is less than one percent of paid circulation.

The Economist is doing better than many others with its digital edition: according to a recent report from the company, the magazine had about 50,000 subscribers to the iPad version in March. But AdWeek notes that this still only amounts to about 6 percent of total circulation — and that is among the highest levels in the industry. As Pontin points out, a recent Nielsen study found that although 33 percent of tablet and smartphone users had downloaded news-reading apps, only 19 percent of the users surveyed had actually paid for them. Says the MIT Tech Review editor:

The paid, expensively developed publishers’ app, with its extravagantly produced digital replica, is dead.

Is Pontin right? Is the dedicated magazine or newspaper app dead? Some publishers disagree, and others are increasing their bets on the iPad ecosystem — such as Next Issue Media, a kind of one-stop newsstand approach. But at the same time, there seems to be increasing interest in the model adopted by the Financial Times, which uses HTML5 to duplicate the look and feel of an app. It’s an approach that is not only cheaper in many cases, but also allows the publisher to do an end-run around Apple’s 30-percent commission — and in the long run, that could make it a much more realistic dream for content producers than the one that Apple has been selling.

Post and thumbnail images courtesy of Flickr users Jennifer Moo and Rego Korosi

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