Interesting points relating to the IPad by Steve Smith of MIN Online in his column, Eye on Digital Media:

IPad Reality Check

Whether the tablet platform is in fact the game changer many publishers
want it to be, it is easy to let the glare of the iPad blind us
to some realities of the platform that are apparent to those of us who
have used the device extensively since day one.

1. The iPad will change your Web strategy. At a recent min Webinar
on magazines developing for e-books and tablets, I was surprised to see
that excitement for the iPad exposed the ongoing frustrations publishers
have with the Web. Low user engagement, brand dilution, poor monetization, and poor
design sense all seemed to characterize the experience of many magazines on the Web.
Condé Nast vp/editorial operations Rick Levine showed a chart comparing the monthly
time spent with Gentlemen's Quarterly in print, online, and in the iPhone app. For the
first three issues that GQ appeared on the iPhone, its users spent about 70 minutes per
issue, on par with the print GQ and about five times longer than time spent per unique
user at gq.com. If these new mobile screens take off, publishers will be rethinking and
perhaps scaling back the Web strategies they have been developing for years.

2. Not so fast. Apps now compete with the Web. One of the unanticipated consequences
of the tablet platform's larger screen is that full Web browsing is now much more viable
than it was on smart phones. The tablet format diminishes that rationale for an app and
so a publisher's branded magazine app will compete with its own Web site.
Entertainment Weekly has tried to recognize the divide by integrating a Web site
viewer with its good Must List app. USA Today engages the problem by re-engineering
its Web content so thoroughly into a better touch-driven experience in the app that
you don't bother hitting the brand on the Web.

3. The ads on the iPad suck. I am not sure why these haven't been raised yet. Most
of the early ad units in magazine apps rely almost entirely on the impact of the original
print ad or pull in a tv spot. There are very few consumer brand apps except for
a forgettable trifle from The Gap and a more ambitious athlete trainer from Nike. The
real opportunity for publishers with in-app advertising is to develop mini-apps for
clients that run within the media’s app and truly leverage the touch and multimedia
capabilities of the format.

4. Cost and standardization will be the choke points to adoption of tablet magazines.
Publishers appear to be digging in their heels over price and seem ready to
defy the loud consumer sentiment against high single-issue pricing. If "Tablet-ized"
magazines are going to keep "enhanced" pricing for "enhanced" iPad magazines, they
need to make a much better case for where they are adding the value.

Being on the iPad with some cool navigation and added videos or little spinning
twirly things does not earn a publisher multiples more than what a reader pays for a
subscription. Publishers need to start thinking about including tangible assets like
special subscriber-only utility apps or in-app games and puzzles. And speaking of
spinning twirly things...stop reinventing the wheel. It is irritating and ultimately
counterproductive to have readers learn a new interface for every digital magazine.
The bottom-line lesson that overarches all of the above is that publishers should not
mistake the Tablet app environment as a full break with the past. Users are bringing
certain expectations for pricing and usability that are informed by a decade of Web
experience. Magazine apps have to share a platform with the Web, and what your brand
does on the tablet platform will have to work in concert with print and Web strategies.
If you think that the iPad promises a simple "reset" of the digital relationship
between publishers and readers, then think harder.

Maybe it is just because of where I live (Connecticut) but this is a little bit hard for me to believe, primarily because so many local TV stations do such a poor job reporting the news, it is hard to imagine that consumers of news have an appetite for more. Full story here

Broadcast TV Stations Outpaced Newspapers in Interactive Sales in 2009

NEW YORK, April 20, 2010 -- Web sales growth at broadcast TV stations outpaced newspapers in 2009 as broadcasters gained ground against their principal in-market competitors and posted an 8.7 percent share of all local online advertising, according to a report released today by the Television Bureau of Advertising at a press breakfast at Gannett Broadcasting’s offices in New York. Total online ad revenue for stations hit $1.1 billion last year, a 10% increase over the previous year, and the report forecast that revenues would grow another 21 percent in 2010.

Jack Poor, VP – strategic planning at TVB, said, “In a year where the IAB reported flat internet revenues, the performance of local TV stations is quite stunning.”

“Benchmarking: TV Web Sites Defy Gravity” examines revenue sources, growth rates, site traffic and other interactive issues and offers benchmarking for stations in large, medium and small markets. The research was conducted by Borrell Associates, which tracks interactive advertising for more than 4,400 local websites in the U.S. and Canada through voluntary submission of data. This is the fifth year Borrell has conducted the benchmarking report for TVB. This year’s report focuses on data submitted by 573 TV stations.

Top 10 Current Events & News Online Destinations - March 2010

Top 10 Print Media Websites - April 2010

 If you are from a small paper, you will find special interest in the last paragraph where the CEO of the mighty New York Times complains about advertising discounts being offered by rival Wall Street Journal in it's new NY edition. Bigger papers - same problems.

From Paid Content.org: Full story here

Online ad revenue gains at the New York Times Co. (NYSE: NYT) are hovering around 18 percent, the same as in Q1, said CEO Janet Robinson, speaking earlier at the JP Morgan Global Technology, Media and Telecom Conference. National auto and banking were the main drivers for the NYTimes.com in Q1 and continue to be pumping revenue to the site. In particular, JP Morgan’s Chase Sapphire credit card has been the exclusive advertiser on the NYT’s iPad app. While Robinson and Martin Nisenholtz, the NYTCo’s SVP of digital operations, discussed the virtues of the iPad as an additional revenue stream during their presentation, they also gave a few small updates on next January’s introduction of the metered paywall on the site. For one thing, Nisenholtz said that news on the homepage would remain outside the paywall.

Asked about the pay model, Robinson said that the company recognizes the need for “multiple revenue sources.” She compared it to the print side of the NYT, which relies on both circulation and ad revenues. “It’s important to note that the New York Times has a large digital advertising base already and we have already been very successful with cost-per-click, particularly at the About Group, but we’ve also secured a great deal of display advertising.”

Perhaps with an eye toward the recent competition from the WSJ in New York and other local areas, Robinson spoke about the existing relationship with marketers that the paper had formed, which helped it transition to single print/digital ad sales team.

Following that lead-in, JP Morgan analyst Alexia Quadrani asked Robinson about past statements she had made about the WSJ’s deep ad discounts, which were meant to undermine the NYT’s relationships with major advertisers. Robinson had previously characterized the WSJ’s pricing as “irrational” and her view hasn’t changed. “They’re playing a volume game, we’re playing an engagement game,” Robinson said. “It has had no impact on us. We’re aggressive when it comes to selling custom packages, yes, absolutely. Are we making sure we have our marketing programs in place? Sure, but this is standard course of business.”

Responded to an ADOTAS blog post today on charging for online content, let us know what you think:

To Pay or Not To Pay

ADOTAS – Only one in five U.S. consumers is willing to pay for online news, according to a recent Pew research study. Pay-per-article or subscription fees simply drive readers elsewhere. These findings are bad news for newspaper and magazine publishers intent on charging readers for online content. But the creative juices are flowing at such cash strapped publishing houses.

For example, the New York Times recently announced a hybrid plan in which readers will be able to view a certain number of free articles each month, but they’ll have to pay a flat fee for full access to the site. By comparison, the Wall Street Journal Online has a flat $79 per year subscription fee, which they are able to charge because their content appeals to a specialized and motivated readership. And that quintessential capitalist, Rupert Murdoch, has indicated his intentions to build pay-walls around News Corps. many other information outlets.

For consumers to fork over the cash, news organizations will have to offer “content that is unique, and this may require specialization and investment by news organizations,” Pew reports. A creative approach is obviously needed. To date, the advertising of online print media has been more closely related to the traditional print forms. But the online versions of broadcast television networks reflects their traditional video commercial advertisements.

Print media online has ample opportunity to expand beyond traditional methods of generating revenue for the invaluable service they provide to our public discourse. Readers may have the patients to watch a video commercial prior to being able to read a news story. But anything beyond a few seconds of attention and savvy online readers simply go around the pay-wall.

 My response:

I think you miss the point. Publications have to charge because the content most are producing is unique and expensive to produce. No other medium produces as much original news content and the free model isn't working because it allows for the delivery of that content beyond the publication's website. It also forces print websites to adjust online pricing to compete with the enormous amount of online inventory available, reducing potential revenue to levels which do not support the gathering and creation of original content. It is unfortunate but there is no choice, publications have to start charging.