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These days, it seems like exciting new iPad apps are spilling out from everywhere. But one thing still hasn't been resolved in the race to get new features into the App Store, and that's how much people are willing to pay for all this stuff. At Tabula Rasa NYC, WeMedia's iPad conference this week, there were plenty of new apps and interesting specs on display. But pricing is still a thorn in the side of many developers — especially publishers.
And that's because these shiny new apps are expensive — often more than the price of the same publication on the newsstand. And when Apple finally debuts a feature that will allow subscription content on the iPad, it looks like many publishers are going to make serious efforts to maintain high price points.
Popular Science magazine for instance, is charging $5 an issue for its iPad app. Subscribers currently pay $12, or $1 an issue, for the print version. Popular Science editor-in-chief Mark Jannot calls the iPad:
"The Holy Grail device we'd been looking for. It has allowed for the magazine medium to be reproduced in a digital environment."
It's true that the touch interface allows for a level of interaction that hasn't been seen with computers. Jannot says that the iPad has fewer distractions than the regular web:
"It allows readers to lean back, away from the browser, and just focus on the bold images and rich storytelling. The reduced complexity increases a reader's immersion."
The combination of video and interactivity on the iPad produces an entirely new viewing experience. And magazine publishers are hoping that it's one consumers are willing to pay for. From their perspective, the iPad fixes a distribution issue that has long hampered the media industry: consumers are not willing to pay a high cost for content. Jannot puts it like this:
"As a magazine industry we've created this monster that [people] shouldn't have to pay more than $1 an issue if they're subscribers, but we're hoping to reset the bar."
New iPad owners have been happily paying $5 an issue for the Popular Science app, which is currently Apple's 39th most popular paid app on the device and 41 on Apple's list of top grossing apps. But the iPad is still a luxury item with a small relatively small user base (and a small offering of products in the App Store. When Apple debuts subscription technology, Popular Science won't be on offer for $12 a year. Says Jannot:
"We will be offering subscriptions, but we're going to be relatively aggressive on pricing."
Other publications are waiting until Apple's subscription feature is set up to debut their iPad specific products for exactly this reason: they don't know what price point consumers will accept.
Like Popular Science, Time magazine has created an iPad app that costs $5 an issue. And people were not shy with their opinions on that app at Tubula Rasa NY. Jeff Jarvis led the charge. He called Time's app "the most sinful piece of shit I've ever seen. It's a DVD and PDF mixed together at a high price."
Jarvis thinks publishers are not on the right path with the iPad. An early adopter of Apple's device, he has since returned (and created a reboxing video to celebrate) his iPad. As he puts it: "Content alone is not an application. Putting it behind a paywall worries me."
But publishers are not deterred. Josh Quittner, Time's editor at large for digital development, responded to Jarvis today, taking issue with his "disgruntled, I-hate-my-ex-wife tone" and his assessment of Time's iPad effort:
"Yes, the Time Magazine app costs $4.99. The rationale: The app offers 100% of the print magazine, plus photo galleries, video and other iPad-only goodies. While the pricing was not my decision, and I opposed it, I was wrong: It turns out to have been a smart move. While I’m not allowed to say how many copies we’ve sold to date, I can tell you it’s sold about 10X what I had predicted to my peers. (Admittedly, I had predicted a small number. Still, I was shocked by how wrong I was.)"
Quittner notes that advertisers are especially enthusiastic about the iPad app and attributes Time's low rank in the App Store (it currently sits at number 73) to the fact that each issue is sold and classified as a separate app by Apple.
Furthermore, he reiterates the traditional publisher's hope that the iPad will be the long awaited solution to his industry's broken business model:
"Tablets will indeed save the day for many publishers as they complete the transition to extremely profitable digital media."
But at Tubula Rasa, many were unconvinced. Said Merrill Brown, a consultant for Journalism Online:
"We now have more and more data showing that people will pay for content in some forms, and on some platforms. But flipping the switch and putting up a wall does not solve your fundamental business problems."