Print on the iPad: A smashing success | The E...

The iPad is transforming media firms, and frustrating them

Sep 16th 2010

THE advertisement for Newsday’s iPad application starts blithely enough. A man in a shirt and tie sits in the kitchen, reading the New York newspaper on his tablet computer. He turns the device on its side and watches the live feed from a traffic camera. Then a fly lands on the table. The man quickly raises the iPad and smashes it down, shattering the glass. The ad implies that the iPad is superior to old-fashioned print in all sorts of ways, just not every way. It is a joke—but also a good summary of how newspaper and magazine outfits have come to feel about Apple’s product in the eight months since it was unveiled.

Even before the device had a name, media executives knew what they wanted from the iPad. Like the Kindle, Amazon’s e-reader, it could be used to sell digital issues of newspapers and magazines. Like the web, it could be used to deliver targeted advertising. It would look better than both. Newspaper and magazine firms were determined to steer its evolution. Terry McDonell, who oversees Sports Illustrated, helped create a futuristic-seeming video of a hypothetical issue filled with whizzy graphics and interactive ads.

It is a mark of the quality of Apple’s device as well as the efforts at Sports Illustrated that the magazine’s actual app does not differ much from the video. Others have created beautiful applications that are drawing consumers. Wired, a technology magazine owned by Condé Nast, claimed to sell 24,000 downloads within 24 hours, at $5 each. Newspaper and magazine apps are popular with advertisers, who pay up to 10 cents per reader—several times what newspapers tend to charge for web ads—for the privilege of appearing on a sexy new device.

The iPad’s effect on media firms extends well beyond its screen. The device contains a web browser as well as an app store, bringing together the world of paid content and the open web, where print content tends to be free. It is as though a news-stand carried two versions of every magazine—one costly, the other inferior but free. Media firms that were already coming to believe that the web is a mediocre advertising platform have drawn a stark conclusion: they should pull back from the free web.

Time magazine has begun to hold back some stories from its website, on the ground that it is now providing a decent digital alternative. Time Inc is moving towards all-access pricing, in which content is available on all platforms to people who pay for it. This is in line with the “TV Everywhere” plan developed by Jeff Bewkes, Time Warner’s chief executive. Others are likely to follow. James Moroney, publisher of the Dallas Morning News, says the release of a paid iPad application later this year is likely to coincide with the erection of a paywall on the Dallas.com website. It is illogical to charge for one but not the other, he says.

Yet obstacles lie in the path of media firms that want to move in this direction. The first is that many print publications do not have enough information about their customers to enable them to sell across platforms. Ken Doctor, a media analyst at Outsell, points out that American newspapers tend to sort their readers by address rather than by name. The second obstacle is Apple. The firm has made it difficult to sell subscriptions on the iPad, and is reluctant to disclose much data on buyers. This is a particular problem for magazine firms, which use customer data to push other products and to sell advertising.

Apple’s device is proving both transformative and deeply frustrating. Media firms are praying that another device, perhaps using Google’s Android operating system, becomes popular and gives them leverage over Apple. Much as they love the iPad, they would gladly smash a few if the thing could be replaced by another, equally compelling, tablet computer.