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Vanita Kohli-Khandekar: Can apps help print survive?

Analysts debate whether applications can rekindle market for online reading with more financial success

Vanita Kohli-Khandekar  |  New Delhi 

Will apps do for the print media what the internet hasn’t? The £347 million Economist Group had more than three million downloads of its app to smartphones and tablets last year. The Financial Times, a sibling of The Economist, had one million downloads of its app since launch in July last year. The New York Times, The Guardian and dozens of other large newspaper groups are reported to have good numbers on app downloads. In India, almost every major media brand has an app or is creating one, though the numbers on downloads remain small.

Are these then the first rays of light at the end of the tunnel? Are apps the answer to the conundrum print media brands face?

For those who came in late, a quick recap: all the big print brands get a lot of readers online — only most don’t want to pay. And, funnily enough, advertisers don’t want to pay much to reach online readers, whatever their numbers. Online ad rates for the same reader are a fraction of those offline. For more than a decade, the print media industry in mature markets – the US and Europe particularly – has been dealing with the migration of readers online, without a supporting migration of revenues. This has led to print readership, circulation and ad revenues going into a fall that looks likely to stop only when the last paper has been printed.

Into this gloom came the iPad in 2010. The tablet computer and its copies have sold over 30 million pieces so far (just over 150,000 in India). Tablets are easy to hold and have a larger screen than mobile phones. The bets are that soon they will be as ubiquitous as the mobile phone — with better penetration than the personal computer.

The tablet was followed by apps. Think of apps (application software) as files that can be downloaded from a variety of sites. There are apps for games, traffic, currency exchanges and thousands of other things. If you download an app for, say, The Economist, you get a mix of stories, blurbs and headlines from the magazine. Every time you want it refreshed, you need to go online. “An app is another way of accessing the internet,” says Neeraj Roy, CEO, Hungama Digital Media. Some apps are free, others are pay and some are a mix of both. They are not expensive to create (anywhere between Rs 2,50,000 and Rs 25,00,000). So the risk in an “app strategy” is reasonably low.

Both tablets and apps have come at a time when bandwidth is aplenty. Their popularity, therefore, begs the question: can they rekindle the market for online reading, with more financial success than on the PC?

The answer is not simple. While the FT’s app is paid-for, it is not clear how many of those three million people took an online subscription because The Economist app encouraged them to. So the actual potential of apps is unclear. According to the Pew Research Centre’s 2011 report on “The State of the News Media”, only 10 per cent of Americans who used apps to connect to local news and information pay for them.

There are some signs on the way the market is headed. Nobody will pay for “The prime minister went to the Philippines” kind of news. What they will pay for is differentiated, specialised, opinion-based, feature kind of content. So Salon, Slate, Atlantic Monthly or NYT features have always done well online. What tablets and apps offer is another way of monetising good, feature-oriented content. In fact they play on the strengths of brands such as The Economist, which are about “lean-back” reading.

And they emphasise what has been evident for some years: that professionally generated content – in news or entertainment – is what people are willing to pay for. YouTube gets the maximum traffic and revenues from professionally generated content. That is why the hurry to sign on TV channels and film companies as partners. Ditto for Zite or Flipboard, apps that aggregate from a variety of newspapers and magazines.

You can see that in the pattern of app sales. The top ten newsstand apps on iTunes in the US market include The New York Times, Cosmopolitan (UK), Health & Fitness magazine and PC Gamer. In India, a similar list includes Digital Photographer, PC Plus and India Today’s Tamil edition. All of these are specialised brands, created by professional media firms and catering to clearly defined audiences.

However, saying that “good content is the key” is not the complete answer. That will emerge only after tablets hit mobile-levels of penetration, and apps become as ubiquitous as music.  

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First Published: Tue, January 17 2012. 00:19 IST