Pop Goes the iPad Bubble?

The iPad dreams of magazine publishers could be the latest death by irrational exuberance.Despite the optimism that greeted the new device, there is a danger that publishers are squandering an opportunity with clunky apps, bad pricing strategies and unsustainable ad tactics.The iPad itself is on its way to being a hit, although not as quickly as many predicted. Apple disappointed analysts who anticipated it would sell 4.7 million in the fourth quarter by offloading only 4.2 million. All told, 7.5 million units have been sold since April. Clearly, tablets are set to take a chunk of the netbook and desktop computer market. But for now, the market is tiny: about 4 percent of households own a tablet, according to Nielsen—hardly a mass market.According to a survey of 5,000 tablet users released last week by Nielsen, 91 percent of iPad owners have downloaded an app—and over half have paid for content. Among the top paid apps, however, magazines fall in eighth place. Their individual download title numbers are puny. (Download a PDF of the numbers here.) Wired crowed about its 100,000 downloads for its first app issue in June; that number has dwindled subsequently to 32,000 in September. Part of the problem stems from the hefty prices charged for publisher iPad apps. An issue of The New Yorker, for instance, runs $4.99. What’s more, there’s no way yet to get annual subscriptions. “In the grand scheme of things, there’s a chunk of eyeballs, but if you’re looking for mass awareness, the iPad isn’t the vehicle yet,” said Rich Ting, ecd of the mobile and emerging platforms group at R/GA.The apps themselves are also missing the mark. “These apps suffer from a product design problem,” said Khoi Vinh, a former lead designer at NYTimes.com. “They are designed around the wrong product vision, one that doesn’t realize people won’t read content in this way over the long haul.”For one, publishers tried to cram every tech gizmo possible into their apps. Everyone oohed and ahhed at the demo video of the Wired app. Then it arrived in the App Store weighing in at a monstrous 527 megabytes. Want the latest issue? It’s hardly an impulse buy when the file is close to the size of full movie download. “There doesn’t always seem to have been enough quality control done prior to the release of the apps,” said Rebecca McPheters, president, McPheters & Co.Another potentially important failing is the lack of sociability of most magazine apps. The magazine app experience, according to Vinh, is akin to a “remote, suburban cul-de-sac” while the digital world is moving to a real-time chaotic city. While the custom software of Wired and Popular Science have won attention, most publishers are using off-the-shelf software to create glorified PDFs of their magazines. Publishers would be wise to take their cues from Flipboard, a publication built specifically for the iPad. Read an article on Flipboard and you’ll see the social commentary around it, a far cry from the solitary interface of most publisher apps. The empty experience of publisher apps shows up in the stats. According to app analytics company Flurry, media iPad apps average less than two minutes per session.That hasn’t stopped publishers from shooting for the moon when it comes to iPad ad pricing. Cosmopolitan, for example, is selling a new ad format meant to mimic a window-shopping experience for $50,000 when its iPad app launches next March. The Hearst publication won’t guarantee download numbers, either. Many top publishers have minimum requirements of multiple weeks and charges $200,000 and up. That’s unrealistic for many clients, such as those in the retail industry and those still wanting to experiment, said Tina Unterlaender, mobile account director at AKQA.“The challenge for publishers is to unlearn what they knew about their business,” she said.—additional reporting by Mediaweek's Lucia Moses

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Pop Goes the iPad Bubble?

Brian Morrissey

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