Writing for paidContent, Benedict Evans recently wrote an analysis of why he believes iPad won't replace printed newspapers.
In light of the media crisis, Steve Jobs and other media moguls have marketed the iPad as the news industries savoir. Despite better than expected sales of the iPad upon its release in the US, Evans notes that the product only really appeals to individuals at the top of the media food chain
The iPad, with its $500 price, renders the product unaffordable for the general public. Much like the iPhone, the iPad works around the app store and the device itself is marketed on the idea that news outlets will be able to charge consumers for applications. This, however, is not what has happened. Evan points out that the most widely downloaded news applications are those offered free of charge.
In fact, with 175,000 downloads USA Today's free iPad app is the most widely downloaded application. Since the applications pricing has not been decided yet, the free app is currently supported solely through advertisements. In early July, USA Today intends to implement a subscription-pricing scheme raising questions over the applications ability to parlay its free status into one that consumers are willing to pay for. The Financial Times is using a similar tactic for their new iPad application. The publication will offer their app free of charge for two months before a subscription is required.
Unlike USA Today, the Financial Times will most likely make a smooth transition requiring users to pay for their subscriptions. The financial news provided is incredibly more valuable than the general news offered by USA Today.
Evans also questions how the new iPad platform will affect the way users consume media, stating that users "may simply transfer their existing 'grazing' news consumption" from their computer to the iPad. Even though the app store exists, the ability to surf the web and the iPad's wide screen give users easy access to the same free news outlets available on their computers.
Ultimately the initial price of the iPad prevents it from overtaking the dominance of print media, believes Evans. As he says, "Some people will pay something for news on the iPad...But there will not be enough of them, and they will not be paying enough to cover the cost of a newspaper model" that still exists. Should the iPad lower it's cost, users might be more willing to pay for subscription fees, but the business model still suffers from the availability of free online content.