iPad App Not for Publishers

Apple’s iPad app came with a flurry last year, causing publishers to cede to its every policy in the belief this new digital star ship would somehow increase their magazines relevance and audience. See Apple’s Unfriendly Magazine App from CPI Feburary 2011.

That was then, this is now, and it’s only gotten worse. With a bit of historical perspective, the following also describes an app meltdown that took place at Technology Review presented by its editor-in-chief and publisher Jason Pontin.

By the time Apple released the iPad in April of 2010, just four months after Steve Jobs first announced his “magical and revolutionary” new machines in San Francisco, traditional publishers had been overtaken by a collective delusion. They believed that mobile computers with large, colorful screens, such as the iPad, iPhone, and similar devices using Google’s Android software, would allow them to unwind their unhappy histories with the Internet.

For publishers whose businesses evolved during the long day of print newspapers and magazines, the expansion of the Internet was tremendously disorienting. The Internet taught readers they might read stories whenever they liked without charge, and it offered companies more efficient ways to advertise. Both parties spent less.Tablets and smart phones seemed to promise a return to simpler days. Digital replicas of print newspapers and magazines (which could be read inside Web browsers or proprietary software like Adobe PDF readers) had never been popular with readers; but publishers reasoned that replicas were unpleasant to read on desktop computers and laptops.

The forms of tablets and smart phones were a little like a magazine or newspaper. Couldn’t publishers delight readers by delivering something similar to existing digital replicas, suitably enhanced with interactive features, which would run in applications on tablets and smart phones? They argued that the new digital replicas would be better because applications run “natively” on the operating system of mobile devices, such as Apple’s iOS, and can therefore have the functions of true software. (By contrast, a website is merely a series of HTML pages and scripts of computer code that run inside a browser, itself the real application. The Web’s architects had meant sites to be more limited than apps.)

For traditional publishers, the scheme was alluring. They lost their heads. One symptom of the industry’s euphoria was a brief-lived literary genre, the announcement of the iPad edition. A touching example of the form is this 2010 letter by the editors of the New Yorker, published by Condé Nast, dashed off in a style that was uncharacteristically breathless: “This latest technology … provides the most material at the most advanced stage of digital speed and capacity. It has everything that is in the print edition and more: extra cartoons, extra photographs, videos, audio of writers and poets reading their work. This week’s inaugural tablet issue features an animated version of David Hockney’s cover, which he drew on an iPad.”

Publishers believed that because they were once again delivering a unique, discrete product, analogous to a newspaper or magazine, they could charge readers for single-copy sales and even subscriptions, reëducating audiences that publications were goods for which they must pay. They allowed themselves to be convinced that producing editorial content for the apps and developing the apps themselves would be simple. Software vendors like Adobe promised that publishers could easily transfer editorial created on print copy management systems like Adobe InDesign and InCopy directly to the apps. As for software development … well, how hard was that? Most publishers had Web development departments: let the nerds build the apps.

Publishers hoped that the old print advertising economy could be revived. The Audit Bureau of Circulations (ABC), the industry organization that audits circulation and audience information for magazines and newspapers around the world, promised it would consider the replicas inside apps in calculating “rate base,” the measure of publications’ total circulation, including subscription and newsstand sales. Rate base had been the metric for setting advertising rates in publishing before the emergence of keyword and banner advertising, which measures click-throughs and ad impressions. Advertising is the real business of media, but traditional publishers couldn’t compete with Google and new-media companies for selling digital ads. Apps would interrupt that decline, returning media to its proper, historical structure: publishers could sell digital versions of the same ads that appeared in their print publications (perhaps with a markup if they had interactive elements), valued with the old measurement of rate base.

Expressed like this, the delusion is clear enough, but I succumbed myself—at least a little. I never believed that apps would unwind my industry’s disruption; but I felt some readers would want a beautifully designed digital replica of Technology Review on their mobile devices, and I bet that our developers could create a better mobile experience within applications. So we created iOS and Android apps that were free for use; anyone could read our daily news and watch our videos, and people could pay to see digital replicas of the magazine. We launched the platforms in January of 2011. Complimenting myself on my conservative accounting, I budgeted less than $125,000 in revenue in the first year. That meant fewer than 5,000 subscriptions and a handful of single-issue sales. Easy, I thought.

Like almost all publishers, I was badly disappointed. What went wrong? Everything.

Apple demanded a 30 percent vigorish on all single-copy sales through its iTunes store. Profit margins in single-copy sales are thinner than 30 percent; publishers were thus paying Apple to move issues. Many responded by not selling single copies of their magazines. Then, for a year after the launch of the iPad, Apple could not figure out how to sell subscriptions through iTunes in a way that satisfied ABC, which requires publishers to record “fulfillment” information about subscribers. When Apple finally solved the problem of iPad subscriptions in iTunes, it again claimed its 30 percent share. From June of last year, Apple did permit publishers to fulfill subscriptions through their own Web pages (a handful of publishers, including Technology Review, enjoyed the privilege earlier); but the mechanism couldn’t match iTunes for ease of use, and most readers couldn’t be bothered to understand it. And while Google was more reasonable in its terms, Android never emerged as an alternative to the iPad: today, most tablet computers are Apple machines.

There were other difficulties. It wasn’t simple, it turned out, to adapt print publications to apps. A large part of the problem was the ratio of the tablets: they possessed both a “portrait” (vertical) and “landscape” (horizontal) view, depending on how the user held the device. Then, too, the screens of smart phones were much smaller than those of tablets. Absurdly, many publishers ended up producing six different versions of their editorial product: a print publication, a conventional digital replica for Web browsers and proprietary software, a digital replica for landscape viewing on tablets, something that was not quite a digital replica for portrait viewing on tablets, a kind of hack for smart phones, and ordinary HTML pages for their websites. Software development of apps was much harder than publishers had anticipated, because they had hired Web developers who knew technologies like HTML, CSS, and JavaScript. Publishers were astonished to learn that iPad apps were real, if small, applications, mostly written in a language called Objective C, which no one in their WebDev departments knew. Publishers reacted by outsourcing app development, which was expensive, time-consuming, and unbudgeted.

But the real problem with apps was more profound. When people read news and features on electronic media, they expect stories to possess the linky-ness of the Web, but stories in apps didn’t really link. The apps were, in the jargon of information technology, “walled gardens,” and although sometimes beautiful, they were small, stifling gardens. For readers, none of that beauty overcame the weirdness and frustration of reading digital media closed off from other digital media.

Without subscribers or many single-copy buyers, and with no audiences to sell to advertisers, there were no revenues to offset the incremental costs of app development. With a couple of exceptions, publishers therefore soured on apps. The most commonly cited exception is Condé Nast, which saw its digital sales increase by 268 percent last year after Apple introduced an iPad app called Newsstand that promoted the New York publisher’s iPad editions. Still, even 268 percent growth may not be saying much in total numbers. Digital is a small business for Condé Nast. For instance, Wiredthe most digital of Condé Nast’s titles, has 33,237 digital replica subscriptions, representing just 4.1 percent of total circulation, and 7,004 digital single-copy sales, which is 0.8 percent of paid circulation, according to ABC.

Today, most owners of mobile devices read news and features on publishers’ websites, which have often been coded to detect and adapt themselves to smaller screens; or, if they do use apps, the apps are glorified RSS readers such as Amazon Kindle, Google Reader, Flipboard, and the apps of newspapers like the Guardianwhich grab editorial from the publishers’ sites. A recent Nielsen study reported that while 33 percent of tablet and smart-phone users had downloaded news apps in the previous 30 days, just 19 percent of users had paid for any of them. The paid, expensively developed publishers’ app, with its extravagantly produced digital replica, is dead.

Here, the recent history of the Financial Times is instructive. Last June, the company pulled its iPad and iPhone app from iTunes and launched a new version of its website written in HTML5, which can optimize the site for the device a reader is using and provide many features and functions that are app like. For a few months, the FT continued to support the app, but on May 1 the paper chose to kill it altogether.

And Technology Review? We sold 353 subscriptions through the iPad. We never discovered how to avoid the necessity of designing both landscape and portrait versions of the magazine for the app. We wasted $124,000 on outsourced software development. We fought amongst ourselves, and people left the company. There was untold expense of spirit. I hated every moment of our experiment with apps, because it tried to impose something closed, old, and print like on something open, new, and digital.

Last fall, we moved all the editorial in our apps, including the magazine, into a simple RSS feed in a river of news. We dumped the digital replica. Now we’re redesigning Technologyreview.com, which we made entirely free for use, and we’ll follow the Financial Times in using HTML5, so that a reader will see Web pages optimized for any device, whether a desktop or laptop computer, a tablet, or a smart phone. Then we’ll kill our apps, too.

 

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  1. UTalkMarketgin has a good point about being only 2 years down that road: http://blog.utalkmarketing.com/uncategorized/are-publishers-waking-up-from-their-dream-about-apps-—-tech-news-and-analysis/

    What I’d add to Gigaom story on Jason Pontin post is an entry barier today vs 2 years ago.
    It was huge investment for publishers to build their own apps two years ago, but today landscape filled with software as a service publishing sollutions that literally take and hour and a few hundred bucks to start your own app. Test your idea small scale, before going full power, right?

    Disclamer, I work with PressPad, one of those companies. That said, I’d still stand by above if I wasn’t.

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