WAN-IFRA

A publication of the World Editors Forum

Date

Wed - 31.08.2016


Before: Will newspapers cash in on Apple's tablet?

Before: Will newspapers cash in on Apple's tablet?

From dock connectors to web analytics to guessing the name of this elusive gadget, all speculation will reach its pinnacle when Apple's widely anticipated tablet is finally unveiled at an event in San Francisco Wednesday.

The much-hyped iSlate (the name of the actual device has not been confirmed) is rumored to have a sleek 10-inch color display and Wi-Fi capabilities allowing newspapers, magazines, and book publishers to deliver their products with an eye-catching design.

With this announcement comes a glittering ray of hope for newspapers that are expecting the tablet to provide a new source of revenue through a new model that allows media companies to charge for content.

Content creators are hoping that Apple's new tablet will revitalize the newspaper industry in the same way it revamped the music industry. The advent of Apple's iPod and the subsequent creation of the iTunes store in 2003 transformed the terms of trade for a battered content industry. The iTunes store has sold over 8.5 billion songs to date and it is the number one music retailer in the world, according to the Guardian. The idea is that Apple's tablet will give newspaper publishers not only a new platform to showcase their product, but also a new way to charge for it. Marrying its slick and slender designs with the iTunes payment system, Apple could help create a way for media companies to alter the economics and consumer attitudes of the digital era, according to the New York Times.

Battle of the tech titans: tablets vs. e-readers

The launch of Apple's tablet also holds the promise of a formidable "high-tech" face-off, as The New York Times called it, between Amazon.com's e-reader, the Kindle, and Apple's rumored iSlate, as both e-readers battle it out for the hearts and minds of content publishers and consumers. On one side is Amazon's Kindle, a device that now dominates a nascent but booming market, accounting for more than 70 percent of electronic reader sales and 80 percent of e-book purchases. Although the Kindle is expected to increase its sales this year, this e-reader seems to still be far from a must-have item and far more popular among older users. Additionally, its hefty price tag still keeps consumers away; the Kindle DX sells for $489.

However, the Kindle's revenue-sharing arrangement with news publishers has not delivered promises of increased profits for newspapers, as a small percentage of a Kindle newspaper subscription actually goes to cover newsroom costs. In fact, despite an expected increase in e-reader sales across the United States this year, it is unlikely that newspapers will benefit for they only receive 30% of the revenue from Kindle subscriptions, according to the Columbia Journalism Review. Book publishers also complain of Amazon's dominance in the realm of e-readers, adding that the Kindle's strict new release price of $9.99 per book forces publishers to start selling at a loss.

On the other side is Apple's much-anticipated, much-blogged about, and almost mythical electronic device - a tablet which is expected to go on sale this spring will offer a far more versatile and expensive (speculation places its price tag at $1,000) devise to offer access to books, newspapers, and other reading material through Apple's iTunes store.

Cashing in on competition

And it seems the advent of Apple's slate is already challenging Amazon's control over the e-reader market, as well as the e-book market. The "iSlate's" arrival could mean content publishers could regain some leverage over sensitive matters like pricing.

This last week, Amazon announced that it is letting programmers create what it calls active content - similar to applications - for the Kindle and keep 70 percent of the revenue from each sale after paying for wireless delivery costs. Although developers will be limited by the Kindle's slow black and white display screen, this new move would represent a shift in Amazon's relationship with newspapers and magazines that make digital editions for the Kindle. News executives' dissatisfaction with their 30 percent cut of subscriptions fees and lack of a direct relationship with those subscribers might all come to an end with a Kindle app store. Media companies could begin to sell more profitable Kindle applications and present news that is updated all day.

It is quite possible that Amazon may be rushing to change the rules of its Kindle platform with an eye toward the fanfare of Apple's tablet. Although the devices have some similar capabilities, the Kindle is marketed as the ultimate reading device and the Apple tablet, some believe, might become more of a platform for videogames or video than for reading.

Apple and the publishers

For book publishers; however, the advent of the tablet provides a golden opportunity. Apple has recently been in discussions with book, magazine, and newspapers publishers about how they can work together.

For one, rumors have been circulating about Apple representatives meeting with the largest trade publishers to propose an arrangement under which publishers would get to set the price of their books, with Apple taking a 30 percent commission and the publishers keeping the rest, according to the New York Times. Apple executives have refused to comment on the speculation and no further details about the revenue-sharing arrangement with other content creators, such as newspapers, have emerged.

However, if this rumor proves to be true, a more profitable revenue-sharing arrangement between newspapers and Apple might be in the works as well.

Apple has also talked with New York Times Co., Condé Nast Publications Inc. and HarperCollins Publishers and its owner, News Corp., about content for the tablet, the WSJ reports. It has been reported that HarperCollins deal with Apple would allow more expensive and even 'deluxe' versions of books to be sold through the tablet at prices ranging from $14.99 to $19.99 compared to the usual $9.99 on the Kindle, as paidContent reports.

New York Times chairman Arthur Sulzberger declined to comment in an interview on the NYT's involvement in the new device except to say, "stay tuned", according to The Wall Street Journal.

In Apple we trust

Optimism around the device seems to stem mostly from the tablet's ability to deliver eye-catching visuals and from consumers' willingness to spend money using mobile devices. In the last decade, while people downloaded music illegally to their desktop computers, they happily paid small amounts of money on their mobile phones to download ring tones and send text messages. In that same vein, other e-readers like Plastic Logic Ltd. and Skiff LLC, backed up by Hearst, plan to sell e-readers designed for newspapers, magazines, and professional documents, adding more digital platforms for publishers to distribute their content on.

But for newspapers, cashing in on Apple's tablet and other e-readers is not only about embracing a new platform. In an interview with Bloomberg, Rich Maggiotto, CEO of a San Francisco-based digital book distributor, said that it is unrealistic to think that the new devices alone will transform the industry. Publishers have to invest in creating content that is unique to the devices. It is not only about transferring print content to a tablet but reinventing the content for that specific medium. Investments in multimedia design might also be a step in the right direction.

While mobile devices may be for snacking and print for dining, as the VP of circulation at the NYT put it, tablets rank comfortably in the middle. The tablet may appeal to those who want a whole experience - a single-purpose device that caters to people for whom reading takes center stage, according to SND. While e-readers are so far are visually uninteresting, tablets might take the experience of reading a magazine or a newspaper to the next level, with colorful and interactive graphics and eye-catching images.

Why newspapers might not cash in on the tablet

However, some are not as enthusiastic as to what the advent of the tablet might mean for the newspaper industry. For a start, it is necessary to remember that it is an expensive, niche product. Some observers believe that the same consumers who were not prepared to pay for content on one medium, will not magically want to pay for content because of a new gadget. Others add that the tablet is not the 'magic pill' for the newspaper industry's woes, as iTunes seemed to be for the music industry because they are inherently different. In music, the artist was always much more important than the brand and in journalism, the brand is more important than the individual author. Repackaging content to give it the stamp of the publishing brand seems to be a good idea.

All in all, iTunes sales have not been enough to offset declining CD sales for music companies, which seems to suggest that even if the revenue-sharing agreement between newspapers and Apple's tablet were to be more profitable, it still would not be enough to 'save' the newspaper industry.

Others have also remained cautious, warning that Apple's tablet might destroy the business model for newspaper publishers, perhaps allowing users to buy isolated bits of content, while diminishing the importance of the integral finished product. With the new tablet, media companies might also be forced to submit themselves to pricing restrictions and sacrificing their direct relationship with customers to Apple, according to the New York Times.

Apple and the newspaper

For now, Apple believes that it is supporting 'old media' by offering them new platforms on where they can distribute their content to more people, solidifying Apple's role as a middleman. The New York Times reports that a source familiar with the product has said that Apple's CEO, Steve Jobs, believes "democracy is hinged on a free press and that depends on there being a professional press." Indeed, a professional press that needs an adequate amount of revenue and resources to fulfil its tasks.

Much speculation about Apple's new electronic device will be finally put to rest tomorrow as Steve Jobs takes center stage to reveal the tablet. A media partner will accompany Jobs in introducing this gadget and according to the Guardian, the New York Times seems like a good bet.


Links

Author

Maria Conde

Date

2010-01-26 17:31

The World Editors Forum is the organization within the World Association of Newspapers devoted to newspaper editors worldwide. The Editors Weblog (www.editorsweblog.org), launched in January 2004, is a WEF initiative designed to facilitate the diffusion of information relevant to newspapers and their editors.


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