Publishers battle with double-edged sword of tablet subscriptions
By Christopher Hosford
The surge in tablet computers can be viewed by media companies either as a threat or an opportunity. With 300 million tablets estimated to be in use worldwide by 2015, according to research company Gartner Inc., however, it's a phenomenon that's impossible to ignore.
“Tablets present a massive opportunity, giving publishers the opportunity of how to redefine the way content is accessed,” said Alisa Bowen, general manager of the Wall Street Journal Digital Network, at last month's Software Information Industry Summit in New York.
Tablets also offer the “fantastic opportunity” of changing subscribers' expectations about paying for content, Bowen said.
But Bowen acknowledged a critical issue remains unresolved for many: Beyond the 30% cut Apple takes from each subscription, its data policies effectively cede control of reader information—perhaps publishers' most valuable possession in attracting advertising—to the Cupertino, Calif.-based technology giant.
“Regardless of the industry or organization, we're all now direct marketers, which is the reality of digital marketing,” she said. “Whether it's content, subscribers or advertising, digital marketing is all about having that one-to-one customer relationship. It's incredibly important that we as publishers think about what data we're surrendering when doing partnerships.”
Some just won't have it, including the Boston Globe. “Apple selling our subscriptions offers tremendous reach and visibility, but it's more difficult for us to get back to the customer, so we've stayed away from it,” Christopher Mayer, publisher of the Globe and its online version, Boston.com, said at the same Software & Information Industry Association event where Bowen spoke.
On the other hand, The Economist, after initially resisting selling subscriptions through Apple's iTunes Store—its iPad app shunted users directly to The Economist's website to subscribe—had a change of heart this fall, perhaps due in part to the popular Newsstand feature in iOS5, the newest version of Apple's mobile operating system.
Newsstand helps users manage their magazine subscriptions. It also offers automatic downloads, cover views and a magazine “shelf” of what's available to read. Preliminary reports are that the feature is boosting magazine subscriptions substantially.
“Our CEO now is talking about the potential for tablets to transform the publishing industry,” said Eric Baumes, CTO of the Economist Online. “We're seeing 10% to 20% of website traffic starting to come from mobile devices.”
Although there always will be outliers, Elissa Tomasetti, VP-marketing and global audience development at the Financial Times, said her company has “an amicable relationship” with Apple over control of subscriber data.
“We feel [the arrangement] is starting to benefit customers and the organization,” she said. “I'd encourage other publishers to create innovations along these lines.”