Newspapers, magazines and book publishers worldwide have been actively addressing the shift in readership towards digital platforms, in particular mobile devices, but have been grappling with fundamental issues in creating sustainable revenue models and content delivery formats. What is the most efficient approach to reach maximum audiences over mobile devices? How can publishers best monetize content delivered over mobile devices?
Why should print publishers adopt mobile media
Print publishers today are losing audiences, particularly younger ones, to mobile devices by the day. Research across 15 European countries shows that 43% of 16 to 24 year olds and one quarter of 25 to 34 year olds are driving the increase in mobile internet consumption. These users are reportedly spending on average 6.3 hours a week using mobile internet on activities such as email, search, social networking, compared to only 4.6 hours spent reading newspapers and 3.9 hours on reading magazines. What’s particularly worrying for print publishers is that print usage will likely continue to decline.
We think a key appeal of mobile devices, apart from their portability, is the multi-functionality and widespread connectivity. For content consumers, this means you can read, view, and purchase all kinds of content in one place, anywhere, anytime. This is something that traditional paper editions have been unable to offer.
What are print publishers doing to adapt to mobile media
The most common response from print publishers to date is to offer a mobile application optimized for the most popular smartphone and tablet devices. The majority of this activity is taking place over the iPhone and iPad, thanks to Apple’s explosive market success.
At the forefront of this development is the New York Times, who have even created a “Reader Applications” business segment and launched a “mobile-friendly” content interface called Times Skimmer.
Meanwhile all major book and magazine publishers are fully embracing the rising e-reader platforms from Amazon’s Kindle to Apple’s iPad and iBooks store. A good example is Time Inc’s tablet concept edition for Sports Illustrated.
What do the findings of the Native vs. Web App study imply for print publishers
The findings have important implications because the most common approach currently used is to launch platform-specific native applications. However, this is only feasible for large print publishers and typically too costly for smaller companies who also wish to reach the maximum number of audiences on mobile devices.
While an iPhone or iPad application provides access to 86 million Apple users, you still need to consider the hundreds of millions of Android, Symbian or Windows phone users holding devices by companies such as Samsung, HTC, BlackBerry and Nokia. This issue becomes more relevant outside the US market, in places such as Europe and Asia.
Each new platform you adopt can increase your mobile development budget in the region of tens of thousands to hundreds of thousands of dollars, including the costs of coding, production, quality assurance, maintenance and joint marketing.
For smaller, independent newspaper and magazine publishers, this is simply out of the question given a lack of immediate financial gains. As a result, they would only be able to target one popular platform or device.
Are web applications therefore, the better solution
In many ways, yes.
Our study, based on a survey with 87 mobile application publishers in over 20 service sectors, has confirmed that a web application generally saves costs in development and maintenance; is normally weeks quicker to launch and allows you to serve audiences across multiple devices with relatively little customization.
In fact, a major news organization recently told us that they have had to update their iPhone application three times over the past year alone, while the web version is far more stable and easier to update regularly.
One traditional challenge for web apps was in user experience, particularly the lack of rich native phone features such as GPS, motion detection and camera functions.
However, ongoing development in HTML5, CSS3 style sheets and the release of new browser APIs with access to aforementioned device features will shortly bridge this gap for most categories of mobile applications.
In addition, our study shows that web apps already appear to generate greater user stickiness, where 33% of web app publishers see steady growth in usage after the first time as compared to only 23% of native app publishers. This is particularly important for subscription-based businesses, such as print publishers.
One counter-argument is that native app stores offer a better way to monetize mobile content. What is your opinion
Not necessarily. I would not say so.
The native app stores, from Apple and Nokia (Ovi) for example, have done a great job in marketing the value of mobile applications and in offering an integrated billing capability. So this creates a superior user experience where consumers can easily browse applications and content in one store-front and do not need to fork out credit card details for each individual purchase.
With that said, app stores typically operate in a controlled environment with strict quality assurance and revenue share regulations imposed on publishers. While a print publisher is able to set their own pricing and in some cases offer in-app subscriptions to readers, it will always be under the “scrutiny” of the store-owner to approve its content and application functionality. Not to mention the necessity to pay out 30% of revenues to the store-owner.
This is a fundamental issue to the business model of publishers, since they have always enjoyed the ability to know exactly who and where their consumers are and be able to cross-sell products to them. With the launch of iPad Apple is also looking to tightly control the adverts integrated in iPhone and iPad applications, which may be another growing concern for especially newspaper and magazine publishers given the importance of advertising revenues.
Will consumers be willing to pay for news and magazine content? So far the experiences from desktop publishing has been less than encouraging.
They already are paying for content, and the key lies in value and quality.
For example, GQ magazine charges users .99 per issue via its iPhone app, while Financial Times bills subscribers directly for content delivered over the freely downloaded iPhone application. Unlike the desktop versions, smartphones and tablet devices offer a very different and more “focused” reading experience – similar to reading a traditional paper or magazine. As such content “feels” like real value again.
We also believe publishers would be able to charge users directly independent of the app store, since newspaper and magazine publishers often already have a customer relationship in place through their print versions.
The subscription model they offer means that the consumer only needs to register payment details once, unlike pay-per-download apps such as games. For existing subscribers, mobile presents an additional selling point in customer retention.
What is the future business model of print media
Many companies are experimenting with different pricing and offerings models as we speak, so it remains to be seen how things will ultimately evolve. However one could take some tips from the music industry, which is also undergoing a paradigm shift in terms of sales and distribution.
One good example is Spotify, which offers free-to-listen songs online funded by advertising but charges users for a premium version that offers offline mobile usage and a variety of add-on features.
An exciting development is Next Issue Media, which is a consortium founded by four major magazine publishers Time, Condé Nast, Meredith, the News Corporation and Hearst. It is currently working to build a standardized web-based publishing platform for magazine publishers worldwide to reach their audiences over mobile devices. This could change the rules of the apps game for print media, so to speak.
Global Intelligence Alliance (GIA) is a strategic market intelligence and advisory group. GIA was formed in 1995 when a team of market intelligence specialists, management consultants, industry analysts and technology experts came together to build a powerful suite of customized solutions ranging from outsourced market monitoring services and software, to strategic analysis and advisory.
Today, we are the preferred partner for organizations seeking to understand, compete and grow in international markets. Our industry expertise and coverage of over 100 countries enables our customers to make better informed decisions worldwide.
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