Are subscription-based apps the future of newspapers?

For about as long as newspapers have been profitable, the secret to success has been a combination of subscriptions and advertising. Find customers who value your content enough to pay for it and advertisers looking to reach those readers and you’re golden. And then along came the internet.

A growing number of readers are getting the news they need online, and with very few exceptions, companies that have tried charging for news content have faced an uphill battle: There’s just so much free stuff out there that it’s hard to get a large number of people to pay for premium content. And for some reason that I’ve never really figured out, advertisers aren’t willing to pas as much for online advertising (despite the fact that they can get far more information about visitors and target highly effective ads, which is much harder to do with newsprint).

Now publishers and tech companies are taking another approach: subscription-based apps.

Rupert Murdoch unveiled a new iPad-only newspaper/magazine today. It’s called The Daily, and it will run you 99 cents per week or $39.99 per year. Readers will get a new issue every day, and you can navigate through the content using a touch-friendly user interface that’s a bit like a magazine or web site — but clearly designed for touchscreen tablets like the iPad.

The Daily will also take advantage of the digital format to offer video content, social networking integration for sharing snippets on Twitter or Facebook, and an audio edition that you can listen to while you’re in the car. Coverage will include general news stories such as the conflict in Egypt, along with sports and other content.

Meanwhile the New York Times is developing a new iPad appNews.me, which is a personalized news app that brings you stories from your Twitter contacts and other sources. While The Daily is an original news source with 100 reporters writing fresh content, News.me is more of an aggressor, bringing you stories from around the world. Despite the lack of original reporting, News.me will likely be a subscription-based app, allowing the company to pay to license content from other news sources. called

Apple is making these subscription services possible with a new in-app subscription service which lets developers offer users the ability to pay for subscriptions using their iTunes accounts.

There’s still one thing we don’t really know though: Are consumers willing to pay for news on their iPads or other tablets or smartphones? Newspaper subscription numbers are falling. For the most part people aren’t paying for newspaper access. After the novelty of reading content that’s only available on the iPad wears off, will they subscribe to apps?

The other thing that bugs me about these walled gardens is that they sort of ignore the more exciting thing that’s happened in online news over the last few years. While declining revenues have made it tough for newspapers to keep operating as they have for the past few decades, access to information has blossomed. If a small town paper reports on a topic that’s of interest internationally, it typically doesn’t take very long for the information to spread from web site to web site — usually with links back to the original source, which should help drive up traffic.

The problem is that it generally doesn’t do much to drive up revenue, because as I’ve mentioned, online ad rates tend to be lower than print ad rates. So I’m not surprised that companies have decided to try increasing revenue by producing content that’s not as easily to spread (or if you do spread it, what you’re spreading is a link to content that other readers may have to pay to read). But I am a bit saddened by it. I’d much rather see journalism saved by an increase online ad rates, but I doubt that will happen anytime soon.

Recovering Journalist Mark Potts points out another problem with The Daily… it’s a daily. In other words, it’s published once a day, and by the time you read an article in the afternoon it might be woefully out of date. Broadcast and internet news has taught us to expect fresher news — especially from digital platforms. It’s a lot easier to provide updates throughout the day on the web (or an iPad) than on newsprint. But The Daily isn’t designed to do that… at least not yet.

But if you want to check out The Daily, it’s now available for download from the App Store. 

 

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