Apps, Apple and the fight to monetise digital content…

Monetising digital content seems to be on top of the agenda at the moment, particularly for newspapers and magazines.

This week, both News Corp and Condé Nast announced plans to launch new apps – Wired and Vogue will follow in GQ‘s rather successful footsteps and Rupert Murdoch is apparently planning two standalone app-based newspaper products.  If the rumours are to be believed, the “special project” will be closely aligned with the Wall Street Journal, the New York Post and Dow Jones.

Speaking more openly about Condé Nast’s plans, the publisher’s general manager Albert Read confirmed the new apps and said he believes the iPad marks a “significant shift” for digital.  Read went on to explain why the arrival of the iPad will change the digital industry, particularly for magazines.

The iPad allows a “lean back” mentality, which hasn’t been associated with digital ‘reading’ in the past, Read said.  It also, of course, offers the desirable element of being mobile.  Read claims that 71% of iPad owners read newspaper or magazine content on their devices once a week, with users increasingly seeking online content through mobile devices, according to the article in MediaWeek.

Condé Nast certainly seems to be making the ‘jump’ to digital – MediaWeek quote Read describing the publisher as the “vanguard of publishing online”, predicting that in 15 years’ time, 30% to 40% of titles will be read on the iPad or an alternative next-generation device.

It all sounds positive, especially for the consumer but can publishers really make money through apps?  Apple certainly can.

Apple is reportedly working on a new subscription plan for newspapers on the iPad. Roger Fidler, head of digital publishing at a Missouri journalism institute, predicts that Apple will take a 30% cut of all subscriptions sold through the app store and as much as 40% of the advertising revenue from publications’ apps.

Publishers, unsurprisingly, aren’t too pleased about this.  Fidler said publishers would much rather be able to pay Apple a fee, rather than a cut.  As a result, Apple’s agenda will no doubt limit publishers’ planned subscription bundling packages.

For Apple, it’s an obvious way to secure a revenue stream from newspaper and magazines.  However, for publishers, Apple will be the middle-man, which could well dampen any hopes that digital is the answer to falling print circulation and revenue.

The key could lie in future developments and the popularity of other devices that could rival the iPad and therefore limit Apple’s hold over the app market.  Roy Greenslade’s article in the Guardian suggests that Google hopes to challenge Apple with a new high-quality tablet device based on the Android operating system.

If that materialises, advertisers will be pleased.  A new report from the Nielsen Company claims Android users are more likely to click on ads within apps than people using alternative mobile operating systems.  Apparently, Nielsen’s research found that the higher click-through rates for Android-based ads stem from the Google platform attracting a younger and perhaps more receptive audience.

Whether it is Google or Apple, or even Kindle, the tablet/e-reader market is certainly showing no signs of slowing.  A new report from In-Stat even suggests that the popularity of iPads are helping to boost the e-reader market, which had once seen the tablet device as a threat.  “Last year, standalone e-readers were one of the most popular devices in the consumer electronics world,” the report says.  E-reader shipments are expected to grow from 12 million units by the end of this year to 35 million in 2014, according to In-Stat.

This goes back to the recent Enders Analysis research, which shows the increasing competition in the digital tablet market (especially with the launch of the £109 Kindle device).

There is clearly much more room for development in this market – with apps, devices and of course, ways to monetise content.  Only time will tell how well publishers and platforms work together to make this happen!

Newspaper business models, paywalls and profitability will be discussed at MediaTel Group’s ‘Future of National Newspapers’ seminar on October 1st.