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Rupert Murdoch thinks tablet devices will save newspapers – what if he’s right?

by on October 18, 2011

[author:Patrick Smith]
When Rupert Murdoch declared in April 2010 that Apple’s iPad “may well be the saving of the newspaper industry,” some commentators scoffed at him. How could one device reverse the freight train of web publishing and the irreversible structural shift of advertisers and readers away from dead trees?

Indeed, Murdoch’s declaration may well be over-cooked: there may well be bits of the industrial era newspaper world that cannot be salvaged, particularly in the local arena – Claire Enders’ latest thoughts on that are as always worth paying close attention to. But here’s where Rupe may be right: tablets are preserving the periodical edition format of printed media just when it looked like it was going out of fashion. No one could have predicted the genuine success and mainstream appeal of the iPad (15 million units sold in under a year) and with more affordable tablets coming soon – most notably Amazon’s Kindle Fire – this is the key trend in monetisation of consumer news media right now.

Newspapers’ new lease of life

Many of the world’s leading newspapers are ploughing resources into their tablet editions. The iPad has, for many publishers, shifted the attention and product spending away from their main websites. The result is an increased importance for the daily edited, curated, time-sensitive and limited newspaper edition following a decade of prominence for sprawling, ever-expanding, limitless web editions.

— The Times has 110,000 digital subscribers, up three percent in the last three months, its sister tile The Sun also has an iPad edition.

— Also in the News Corp stable, the Wall Street Journal has more than 200,000 tablet and Kindle edition subscribers while iPad-only newspaper The Daily – a source of some mockery upon its launch – averages 120,000 readers a week according to a media buyer at Zenith Optimedia. By way of comparison, with those figures The Daily would probably be placed somewhere in the middle of the UK’s ever-competitive monthly circulation table, beating the likes of The Guardian and The Independent.

— The New York Times has a $20 a month iPad and web access offering

— Telegraph Media Group has quietly been extending iPad app access to its sizeable print subscription base of 330,000, using the app as an added bonus for print subs.

— That’s also the plan from the Guardian, which launched its iOS5-enabled Newsstand iPad app last week amid much fanfare – print subscribers get it at no extra cost. Former Guardian mobile product manager Jonathon Moore has written about the challenges of building the app here.

— The emergent dominant price for daily newspaper editions seems to be somewhere between £9.99, the price Guardian, Times and Telegraph charge for monthly access, and £15.

Tablets are different

Those are just a few – there are many others – putting the iPad at the centre of not just their digital strategy but of their entire content distribution and monetisation strategy. It is certainly true that publishers are storing more faith in the tablet format than they did with smartphone apps. That’s because the tablet/iPad growth is not hype – it really is different to anything we’ve seen before from a consumer computing device.

As Yankee Group analyst Dmitriy Molchanov expected 192 million tablet computer sales globally by 2014. “The growth in this market is unprecedented. The tablet sales curve is rising faster than that of HDTVs, handheld gaming consoles or even MP3 players,” he says.

Web edition traffic reaching its plateau?

The explosion of traffic to leading news sites in the UK and US and the days of 50 and 60 percent annual increases are going to come to an end; an era of traffic slumps and stagnation may be the replacement. Mail Online’s 75 million monthly unique browsers in August was up just 2.6 percent on July but 64.5 percent year on year. What will the increase be in 2012? (Note: the metric should really be called browsing sessions as it doesn’t refer to individual readers, but that’s another story).

The capsule edition still works

Some have criticised iPad apps for cutting off the wider web, for missing the live aspect of digital news. But far from being a minus point, apps’ closed nature is in fact their strength. The Guardian’s information architect Martin Belam argues: “Just because you can have an always on app that crams in updates and breathlessly fast breaking news from live blogs, doesn’t necessarily mean that you have to.”

I stand by my earlier argument that the iPad won’t save the age-old idea of “journalism” and the news industry as we know it – perhaps nothing will, the game is changing. The revenue from digital subscriptions is any form will not replace the huge amounts lost to the migration of classified ads online and the lower volumes of print circulation. PwC estimates that newspapers (in North America) will made $150 million in 2010 from digital subs, rising to $331 million in 2015. But at the same time revenue just from circulation will fall from $10.2 billion in 2010 to $9.5 in 2015.

But with so much choice and so many events in the world, a daily selection chosen by editors is a valuable thing indeed and tablets are keeping it alive. Convincing more people to pay and creating usable, affordable products is the real challenge ahead.

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