Stephen Glover: Can newspaper 'apps' ever make a profit?
Media studies: Newspaper publishers who are banking on the iPad producing a torrent of new revenue are being over-optimistic
Monday 09 May 2011
Last week, The Daily Telegraph launched a new application ("app") for the Apple iPad costing £1.19 for a single edition or £9.99 for a monthly subscription. This week, the Daily Mail is launching its app at 59 pence a day or £6.99 a month. Are such prices realistic, and will these apps find a market?
These questions are not easy to answer. On price, it is certainly the case that iPad newspaper apps are more expensive than they might otherwise be because of Apple's policy of keeping 30 per cent of publishers' subscription fees. This has outraged many newspaper managements but as Apple has about 70 per cent of this "tablet" market they have had to knuckle under.
Is there a large market for newspaper apps? In one sense, their presumed success is a mystery. If I have an iPad or similar machine, I can go online and read Telegraph.co.uk or Mail Online free of charge, as I can on my desk-top computer. Why would I be prepared to pay a significant amount of money to read substantially the same newspaper in a different form on the same iPad? I probably wouldn't be.
But there are some readers who are. They want to read a newspaper on their iPad which in lay-out and design closely resembles the newsprint version they can buy in a shop. It takes all sorts. Where I can see myself paying to read an app is when I am abroad. If a British newspaper costs two or three pounds in a foreign country, and is sometimes out of date, paying around £1 for a tablet version of the real thing does not sound exorbitant.
Still, newspaper publishers who are banking on the iPad producing a torrent of new revenue that may transform their balance sheets are being over-optimistic. (Rupert Murdoch has even launched a newspaper, The Daily, especially for the iPad, which last week announced losses of $10m for its first quarter.) In this country there are not enough iPads around, which is hardly surprising given that an "entry level" machine costs several hundred pounds. Maybe, as rival manufacturers produce machines, the price will come down, though Apple has never been famous for giving away its products.
The Google Android tablet is significantly cheaper, though I am not qualified to rate it versus the iPad. Interestingly, Google allows newspapers to keep 90 per cent of subscription fees. Publishers such as the Daily Mail will offer an app on the Android tablet appreciably cheaper than on the iPad.
If Apple's near-monopoly loosens, and the price of tablets and newspaper apps comes down, the number of people reading papers in this way will increase. Meanwhile every publisher will have to have an iPad app. The Guardian will soon launch its own which is likely to be cheaper than the Telegraph's. One way or another, apps offer some unhoped-for extra revenue in the digital age, though I would be astonished if they transformed the economics of newspaper publishing.
BBC pay is a matter of principle
After much pressure, the BBC eventually published details of its best-rewarded senior executives. It turned out that in November 2009, 46 earned more than the £192,250 then paid to the Prime Minister. As a result of the general hullabaloo, the Corporation agreed to cut the pay bill of some 640 senior managers by 25 per cent by 2013.
This is all well and good. The BBC has woken up to the fact that a public-service broadcaster funded by the licence payer has the same sort of obligation as government departments to disclose the salaries it pays. Yet it has not applied this principle to so-called "stars", some of whom are paid much more than the best-remunerated executives. It has offered only to reveal "bands" of salaries, leaving the public to guess who falls into which band.
If executive salaries are to be published on the basis that these people are public servants, surely the same should apply to the "stars", who are no less public servants. One explanation, put forward last week by Lord Patten, the new chairman of the BBC Trust, is that publication might have an inflationary effect. In other words, if newsreader A discovered that newsreader B was being paid more, he or she might demand parity.
One can see the force of this argument. But it surely applies equally to BBC executives, some of whom might have felt underpaid in relation to their colleagues when their salaries were made public. No doubt there would be grumbling among some "stars", but that is a matter for the Corporation's management to address. Lord Patten is, in effect, saying that the potential difficulties which disclosure would cause management should override the principle of openness, which has already been established so far as executive pay is concerned. This is not logical. A principle is a principle.
50 million vs 200,000
When people ask me how well a newspaper is faring, I invariably supply its circulation figure. But is this correct? If I am asked about The Guardian, should I say that on one recent Monday it is alleged to have sold just above 200,000 copies, or should I mention that it has the fifth most visited newspaper website in the world, with nearly 50 million monthly visitors in March?
The problem is that we can visualise the physical sales of a newspaper but it is very difficult to make sense of 50 million monthly visitors, or to know what they mean for The Guardian.
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