For some critics, the lack of participation from content companies at yesterday’s iPad launch threw some cold water on predictions for how the new device could help the media business regain revenues lost to the web.
But if you looked hard enough, publishers were there and, more importantly, some have plans to invest heavily in the platform. In an interview, President of Condé Nast Digital Sarah Chubb said they are moving fast to make sure they have three to four magazines ready for the iPad’s launch in 60 to 90 days. Chubb: “It’s the most important thing to happen to our business models in a year. It’s really exciting if you are sitting in our shoes.”
To be sure, Conde Nast is only one publisher, but Chubb’s excitement stems from their experience with the iPhone. In December, they launched GQ, their first magazine app that garnered 7,000 downloads. In Jan., those numbers doubled. At those levels, it starts to make a significant impact on GQ’s overall circulation of 850,000 to 900,000. “It’s bigger than any physical store outlet,” she added.
The revenues aren’t bad either. Users pay for each issue, and there’s advertising to consider. With the iPad, ads can be as large as they are in the magazine and can be interactive. Chubb said in a survey, iPhone users said they were just excited about what they could do with the ad as the advertiser. They can ask, “I like that jacket, can I buy it now?” Yes, they can. Chubb added while the value of the platform may be hard to see today, it may be indicative of where we will be in 10 years. The trend is moving away from print to digital. “Particularly among the younger demographic. Everything is digital and mobile.”
What does Apple (NSDQ: AAPL) believe? I asked Apple’s SVP of worldwide product marketing Phil Schiller if it’s possible that the iPad can help resurrect the media industry. Not surprisingly, he said, “Absolutely. Why not?” In general, however, Apple isn’t providing much innovation to the publishers—other than offering an internet device with a large display. For instance, people who buy the Amazon (NSDQ: AMZN) Kindle download books over a cellular network without even knowing it because the connectivity is included in the device’s price. The iPad won’t have that luxury, and if people are already paying for broadband in the home and broadband for their phone, $15 to $30 more a month for limited data on the iPad will be hard to swallow.
It’s not that Apple isn’t innovating at all. The five book publishers who have agreed to sell titles in the iPad’s iBookstore will receive 70 percent of the revenue, with Apple taking the remainder, reports the WSJ. That is a different business than the industry is used to and could result in individual books being priced at individual prices. But Apple isn’t offering that deal, or any other business model, like subscriptions, to other content companies. “There’s no iMagazines and there’s no iNews,” Sara Ohrvall of Swedish media company Bonnier told the WSJ. “Either we have to package our products much differently, or we just lost the paid content game.”
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