Keep taking the tablets!

A series of blogs about the broadcast industry, narrated by David Brennan…

I attended the always lively and entertaining ‘The Year Ahead’ event hosted by MediaTel Group last week, where we were once again entertained, informed, inspired and challenged by the predictive powers of Ray Snoddy and Torin Douglas – the Mitchell and Webb of media punditry.

It felt a little strange this year; there was less focus on new technology than usual and rather more retrospection, especially given the momentous events from the last 12 months, from Murdoch to Leveson. As such, the newspaper industry was in the spotlight rather more than is customary but, despite the obvious concerns for its future, I felt there was more confidence and less defensiveness than we’ve come to expect.

Part of that confidence came from the early signs that, for once, digital technology might be more of a saviour that a slayer through the emergence and rapid uptake of tablet computers.

A great deal has been written about how tablets are affecting media behaviour, but now we are seeing significant penetration levels (including the emergence of around a million multi-tablet households in the UK) we are moving from speculation to observation. One of the points made at ‘The Year Ahead’ event was that consumers appear to be prepared to pay for content on their tablets that they would always access for free via their PC.

It is a truism (that happens to be untrue) that once people are used to getting something for free, they can never be persuaded to pay for it. The same used to be said about pay-TV; why would people pay significant sums of money for TV that had never cost them a penny previously, apart from what they had been forced to pay via the BBC licence fee?

In fact, even before BSkyB transformed the pay-TV market through the Premier League deal in 1993, it had successfully persuaded almost three million households to pay for a very limited, nine channel pay-television package dominated by archive and imported programme content. And that was despite the inconvenience of having to get a satellite dish installed and a price point that invited unfavourable comparison with the value of the BBC licence fee cost!

Newspapers, though, seem like a less promising prospect. News has become commoditised by the internet and it is much harder to monetise digital content in this environment. Although it is accepted that digital revenues will always struggle to counter declines in newspaper circulation, mobile devices – especially tablets – do offer a ray of hope.

The always reliable Pew Centre in the USA calculates around a third of the 25 million tablet owners in the States have paid-for access to newspaper content on their device, either directly or via a bundled service. The research (published last month) also shows that tablet owners are much more voracious consumers of news content and news access is a bigger part of their tablet consumption than social media, books or video consumption. The money appears to be on bundled subscription offerings for the best way out for the struggling industry… but at least there appears to be a way out compared to the pre-iPad predictions.

This led me to wonder – what is it about tablets that means they can change the potential business model for a whole industry? After all, they are just a better way of accessing stuff we’ve always been able to access (and generally for free).

First of all, like many (or most?) technological innovations, especially the expensive ones, tablets are quite a middle-aged phenomenon. I believe the average age of a tablet owner is around 42. They are not typical early adopters of other digital technologies and, for this middle-aged, upmarket user base, cost is far less of an issue than for other demographics. (It is also the core audience for news media; later adopters might be less willing or prepared to pay for news content).

But it’s not just the profile of tablet users that is influencing the value they place on the content; there is something much more emotional going on. In many ways, tablets are the computing equivalent of the Nintendo Wii, but more personal. Their ease of use and instant gratification, as with the Wii, increases usage and engagement with the content. (It is interesting that game apps are one of the most popular categories). For less experienced or enthusiastic online users, it can be empowering. As an entertainment device, it is associated with fun, not work.

I also think there is something emotional going on with the apps themselves. There is a sense of ownership, even with the ones that are free, whereas access to a URL feels more like renting the content. I saw exactly the same phenomenon in a research study I recently completed; people with comprehensive access to on-demand TV content still preferred to have the best stuff on their DTR because they felt that was ‘theirs’.

Tablet ownership is going to grow exponentially over the next few years and it is already changing the nature of the online experience for many people. If newspapers (and other content providers) can provide content which is customised around that experience, and adds value to other media touchpoints (such as the print edition), then the tablets might be good for their health.

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