Taking a bite of the Apple... Are there more rewards or dangers?
The article by Tim Sohn reports that newspaper publishers are "raving" about the new portal, launched in October this year, which has given app download numbers a huge boost. According to Sohn, The New York Times has experienced a 429% increase in iPad app downloads and a 5,596% increase in iPhone app downloads since becoming part of Newsstand. The Metro UK app, available on Newsstand, has been downloaded 180,000 times since October 31, compared to an earlier app that was not part of Newsstand, which has been downloaded just 240,000 times since its launch in April 2010. The new app has also generated over 65,000 unique daily visitors and between 800,000 and 1 million page views for Metro UK's website.
Newsstand offers two major advantages. Firstly, like a traditional newspaper stand, it keeps users' preferred publications in the same place. As Steve Wing, head of mobile and digital marketing at The Guardian puts it, "it gives you a kind of shelf to be found [on]." Secondly, apps are downloaded in the background, so they are ready for users when they switch on their devices in the morning. David Brinker, senior vice president of operations and business development at The Daily notes that this removes "a challenge for users".
These factors both make accessing apps through the Newsstand similar to a traditional news-reading experience; your papers are delivered to you in the morning, all in the same place. All this, plus the full benefits of new digital features. No wonder apps bought via Newsstand are doing well.
Yet these benefits come at a price - 30%. Almost a third of the profits from all subscriptions purchased via Newsstand go straight to Apple. What's more, although apps can read approved content purchased from outside, they are not allowed to include external links or "buy" buttons for products to be used within the app.
Sohn suggests that publishers are largely unphased by the 30% fee; he paraphrases Steve Wing of The Guardian, saying "a company should expect to pay for a service that provides such value."
Yet even if this is the case, an article published by Paid Content last Friday points out a further cost that Apple levies on news publishers. The author David Kaplan considers the challenges facing Time Inc. as new CEO Laura Lang will have to make decisions about the company's relationship with Apple when she begins her job in January. Kaplan writes that Time has been "wary" of accepting Apple's terms for selling subscriptions for its magazine apps through the iTunes store. The stumbling block is not Apple taking a cut of subscription fees, but "Apple's policy of not actively sharing user data." Despite the fact that Apple allows users to voluntarily share their details with the news organisation, there are worries about how many will actually do so.
"Time Inc. has 31 million print subscribers across 21 magazines," writes Kaplan, "Let's say within five years, half of those readers migrate to digital and away from print. How many digital subscribers volunteer their info? How much marketing and advertising data would Time Inc. lose?"
But is there an alternative? When it comes to tablet apps, another article published by Paid Content on Friday points out that although Amazon's Kindle Fire estimates that it will ship 3.9 million tablets in the fourth quarter of this year, it still only holds 13.8% of the market. Apple, on the other hand, has an estimated 65.6%. The author of the article, Laura Hazard Owen, goes on to suggest that, although the Kindle Fire may shake up and broaden the tablet market, this might work to Apple's advantage. "A new set of media tablet buyers also means a new possible audience for Apple," she writes.
These figures at least suggest that Apple sales are still where most of the customers are. Despite the difficulties, for news publishers Apple is perhaps set to remain the most tempting option.