Apps as Money Pit
Magazine publishers are pouring money into apps, seduced by the notion that tablet computers can open a new avenue to make money from their content. But will they ever make it back? Certainly not in the near term and, perhaps, never.
There are only 8 million iPads in circulation (so far the only interactive tablet on the market) and the audience is currently too small to attract serious ad dollars.
David Link, a founder and creative director at apps developer The Wonderfactory, said magazines are spending as much as $500,000 in upfront costs and hiring three to five staffers—and in some cases up to 10 people—to provide ongoing design, ad sales and tech support.
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