James Murdoch, son of media mogul Rupert and head of his father's News Corp operations in Europe and Asia, said that newspaper apps are cannibalizing the print product, and reaffirmed his company's belief that content should not be given away for free, if it is to be effectively monetised.
"The problem with the apps is they're much more directly cannibalistic of the core print product than the web site," Murdoch said at the Monaco Media Forum, quoted by paidContent. "People interact with it much more like they do with the traditional product."
This latter statement reflects a belief that has usually been seen as a positive aspect of applications on the iPad and other tablets, or even on smartphones: that they offer the possibility to create a more coherent reading experience and a package that is more similar to a print paper with a more controlled narrative than online.
But is it really a 'problem' that apps are cannibalizing print sales? Surely it is only while print sales bring in more of a profit. App subscriptions have to be cheaper for the consumer than print subscriptions and therefore can't bring in so much revenue directly from the consumer, but clear savings are made on distribution and if consumers are engaging with the app and advertising revenue can reach a sufficient level, the app model could prove beneficial. Rupert Murdoch, amongst others, has welcomed the iPad as a game-changer and a potential saviour for newspapers.
Three of News International's (News Corp's UK subsidiary) properties have recently gone behind online paywalls: the Times, the Sunday Times and News of the World. The first official subscription figures for the paywall around the Times and Sunday Times websites were announced earlier this month: 105,000 people have purchased some kind of digital product, about half of whom have actually subscribed, and about 100,000 print subscribers have registered online and activated their digital accounts. Unofficial figures, which revealed that the subscriber base is more UK-skewed and more engaged, emerged this week.
"We are transforming the business of digital journalism at News International," the Telegraph quoted Murdoch as saying at the event.