Wednesday, October 20, 2010

Thoughts on newspaper circulation: tablet subscriptions are more like music downloads than print subscriptions

Many years ago it was someone's crazy idea to make your humble servant a newspaper circulation manager for six month. It turned out to be one of the most fun jobs I've ever had, even if getting up extra early was a pain.

So thinking about tablet subscriptions from the perspective of a circulation director, I think I would be leery of those who think you can begin selling massive amounts of iPad subscriptions at rates near your home delivery rates. I just don't think that iPad owners look at those monthly or annual costs as some sort of incremental purchase -- like buying the latest Lady Gaga song from iTunes.
For some newspaper readers, buying a recurring subscription to their metro daily is an either/or choice. If I'm going to spend $100 a year or more on a newspaper do I want it in print or on my iPad? If the newspaper will combine the two then that is a retention strategy, right?

I've reached the conclusion -- at least for now -- that pricing strategy has to match circulation strategy. Is your tablet app designed to attract new digital readers, or to retain print readers that are moving to electronic devices? The New York Post recently released an app that gives readers access to the paper for a month for $1.99. But after that time the price goes dramatically up -- though still a discount over home delivery to reflect the lower production and distribution costs. The Post's move would at first appear to be a new reader acquisition strategy, but long term it is a subscriber migration strategy.

Of course, the Post is heavily into single copy sales compared to, say, the St. Louis Post-Dispatch. So newspapers with heavy home delivery levels have some serious financial calculations to do. Unfortunately, many of these mobile publishing decisions are being made by either a designated mobile manager or by executive officers. Bad idea. Newspaper publishing has always been a team activity, and now is not the time to change this.

For buyers of apps, the purchase of a periodical through the iTunes App Store is much like buying the latest Lady Gaga song: an impulse buy that they soon regret. At 99 cents or $1.99, these purchases are of little consequence. But don't expect the same sort of buying habits to be employed with an in-app subscription that will cost a more substantial amount.

If I were in charge of mobile strategy at a newspaper (and, yes, I am available!) I'd demand that the circulation manager and ad director were in the same room when discussing options (the editor can go outside for a while and get some coffee). Is a new iPad app an attempt to grow readership for advertising purposes? If so, then there are lots of questions that need to follow. But if the tablet edition is a retention strategy then a lot of numbers need to crunched to determine proper pricing.

But what about a third option: the tablet edition as a new product? I love this option, but most newspapers continue to see their iPad apps as brand extensions -- products that bring in the same content as the print or web product. Creating a new, unique tablet product solves many possible problems with circulation, but it, of course, creates new ones on the editorial side.

So far, at least, the major newspaper companies like the NY Times and Tribune Company who have been experimenting with new product creation are doing so for the iPhone. The Times, for instance, has recently updated their iPad app to make it more like their print and web products, not less. The Tribune Company has yet to release an iPad app, though one is expected soon. (Though, I might add, that hasn't stopped some developers from grabbing the RSS feeds of the Tribune to create their own paid iPad news apps.)

I might add, isn't it strange that no newspaper company has created a new tablet edition for an area outside their home delivery zones?