The App Store is certainly not going to be a panacea for print publishers looking to reverse their fortunes, but The Guardian is proving that getting into the App Store is a worthwhile exercise as the new Guardian iPhone app has been purchased 9,000 times since launch.
At a price point of £2.39, that amounts to over £21,000 in the first 48 hours (before Apple takes its 30% cut). Good enough to give the app the top spot on the list of top UK paid apps, and the second spot on the list of top US paid news apps.
As paidContent:UK, which is owned by Guardian News & Media, points out, "For a company whose annual losses grew 40 percent to £36.8 million in 2008/09, this is going to be incremental revenue, rather than a magic bullet". Even so, you have to start somewhere and The Guardian's early success in selling an iPhone app should serve as a reminder that consumers are willing to spend money on something that provides value.
Of course, The Guardian is only charging for the app; it isn't charging for access to content and has no plans to do so, calling pay walls in general a "stupid idea". But there is plenty of room for a variety of business models.
In my opinion, there may be clever ways for news apps to take advantage of in-app purchases and subscriptions. And news organizations should make sure they're multichannel by integrating their paid offerings with all points of access, including iPhone apps. For instance, if The Guardian moves ahead with its members’ club, it should look to find a place for it its iPhone app. That would not only create more value for members (and encourage members to purchase the app) but would also give The Guardian a new platform on which to upsell memberships to non-members.
The important point here is that while none of this will swing companies that are losing tens of millions of pounds a year to profitability, it will help them focus more on the product and value proposition. That in turn could lead to much larger benefits down the road.